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TMI Blog2022 (7) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... nd only thereafter the evidence is admissible. In absence of compliance with the provision of Section138B of the Act, the statements are not admissible as evidence. Rejection of cross-examination - violation of principles of natural justice - HELD THAT:- The rejection of cross-examination in the impugned matter tantamount to violation of principles of natural justice. Request for cross-examination has been denied and the witnesses have not been examined despite specific reliance by the appellant on Section138B - in the present matter all the documents in respect of disputed consignments were in the name of Iranian buyers. There is nothing on record to show that the said documents were amended at any stage so as to permit import of goods at UAE. Further Revenue nowhere produced any documentary evidence to show that the exports documents produced by the Appellant were false and fabricated. Once all the export documents were in the name of Iranian buyers there was no scope for clearance of the goods in UAE and its subsequent sale. In the present matter none of buyer at Iran have claimed that the goods have been short shipped /not received by them. None of the remittance recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for imposing penalty upon the appellants, therefore, the penalty imposed on all the co-appellantsis set aside. The order of the Commissioner (Appeals) is set aside and all the appeals filed by the Appellants are allowed. - Customs Appeal No. 10844 of 2021, 10836 of 2021, 11051 of 2021 - A/10785-10787/2022 - Dated:- 7-7-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Ajay Singh and Shri Paritosh Gupta, Advocates for the Appellant Shri Vinod Lukose Superintendent (Authorised Representative) for the Respondent ORDER The present appeals are directed against the impugned order-In-Appeal No. MUN-CUSTM-000-APP-136 to 138 -21-22 dated 25.08.201 passed by the Commissioner of Customs (Appeals), Ahmedabad. 2. Briefly, the facts of the present case are that the appellant M/s Janki Das Rice Mills had exported Rice under disputed consignments which were originally booked for Iran, but investigation alleged that the consignments were delivered to UAE and hence violated the provisions of para 2.40 and 2.53 of the Foreign Trade Policy. Accordingly, show cause notice dtd. 02.05.2019 was issued and after due process of law the adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the title in the goods becomes vested with such purchaser i.e the foreign buyer. The purchaser who held the title in the goods was then free to deal with the goods. Therefore, the change in port of discharge of the containers/goods after the goods were out of charge and handed over to shipping company and loaded on the vessel was prerogative of the consignee/ foreign buyer and thus the Indian Exporter cannot be held liable for any such act, at the behest of the foreign buyer. 3.2 He further submits that documentary evidences in the form of photographs of the rice bags along with supporting documents were submitted showing that the bags were printed with Iranian language label and markings. As per the laws in UAE, the rice packed in Iranian language and labels as per Food Laws of Iran Government cannot be sold in UAE region as for selling in gulf region, the markings are required in Arabic and English. A precondition for the clearance of an import of any agricultural food products into Dubai is the Import Certificate from Dubai Municipality is required. Also, for any food product that is to enter the UAE, there must be a license granted to the consignee to trade in foodstuffs. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the goods were shipped on board of the vessel, keeping in view the provisions of Section 149 of Customs Act, 1962, no amendment in Shipping Bill could have been permitted as contended by the impugned show cause notice and confirmed by the impugned orders. In absence of any violation under Customs Act the proceedings are without jurisdiction. 3.6 He also argued that Ld. Commissioner failed to appreciate that in the Indo-Iranian Trade, there was no embargo or condition that the exported goods must reach Iran or that they should be consumed in Iran to be eligible to fall within the Rupee trade. In other words there was no end use or used in Iron only condition. In absence of any such condition, imposing of such condition by assumption as proposed by the impugned show cause notice and confirmation of such non existing condition has vitiated the proceeding. In the case of rice being exported to Iran there was no condition that goods cannot be exported or dealt with in any other manner by the Iranian buyer. In absence of any such condition the impugned show case notice is liable to be dropped in limine only without going further in merits of the case. The declaration made befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Customs Authorities would have no jurisdiction in this regard. 3.10 Shri Paritosh Gupta Learned counsel appeared on behalf of the Appellant M/s. V. Arjoon, CHA and submits diversion of goods to Dubai after clearance for Iran was not brought to the notice of Customs authorities at the port of export by exporters or shipping lines, because cargo had already left Indian waters and had reached Jebel Ali and Exporters/Shipping Line had not requested for any amendment in the Shipping Bill. That no malafide can be attributed to the CHA in the absence of any motive to unlawfully derive any gain. The Role of the CHA is to file shipping bills on the basis of the documents provided by the exporter. Appellant always taken due care in preparing true and correct documents and hence it cannot be alleged that there was a mis-declaration on the part of the CHA. Further, it is also a fact that the exporter is responsible to remit the foreign remittances in the foreign currency, this responsibility cannot be passed on to other person. 4. Shri Vinod Lukose, Learned Superintendent (AR) appearing on behalf of revenue reiterates the findings of OIA and placed reliance on the following decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable or (b) When the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. (2) The provisions of sub-section (1) shall so far as may be apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court. 5.1 We also find that the rejection of cross-examination in the impugned matter tantamount to violation of principles of natural justice. Request for cross-examination has been denied and the witnesses have not been examined despite specific reliance by the appellant on Section138B. The Hon ble Madras High Court in the case of Veetrag Enterprises v. Commissioner of Customs - 2015 (330) E.L.T. 74 (Mad.) has observed as under : 8. While considering the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellant were false and fabricated. We therefore hold that once all the export documents were in the name of Iranian buyers there was no scope for clearance of the goods in UAE and its subsequent sale. Further department nowhere disputed the foreign remittance of impugned consignments in Indian Rupees from Iran. In the present matter Appellant also produced the documentary evidences related to re-export/ transhipment from Dubai to Iran. These documents consisted of (i) Documents issued and certificated by Dubai Customs relating to the impugned goods that were re-exported /transhipped from Dubai to Iran. (ii) Copies of Invoices issued by the freight movers M/s Khalsa Transport LLC at Dubai with regards to movement of containers from Jabel Ali Port of Greek Customs Port where the said containers were destuffed and from where the Rice bags containing Rice were exported/ transhipped to Iran. (iii) Bank documents indicating that remittance have been received from the same buyers. Without conducting any verification related to the said documents only on the basis of statement of persons it cannot be concluded that the impugned goods was not delivered in Iran. 5.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank, have been objected to by the concerned Indian Bank. None of the remittance receipts have been alleged to be fake. As per RBI regulations payment against exports can be received from consignee (foreign buyer) as shown in export documents and cannot be received from any other party. Therefore the contention of revenue that payment has come from third party and not from actual buyer in UAE not supported by any evidences is not sustainable. 5.6 Without prejudice, we further observe that in this case the only allegation and finding against Appellant is that they had violated para 2.53 of the FTP i.e. to say that since according to the Customs the goods were actually exported to UAE, the payments should have been received in convertible foreign exchange. The whole case revolves around irregularities in respect of receipt of currency with regard to exported goods. We find that these violations relate to post export conditions. There is no doubt that any violation relating to foreign exchange are covered under FEMA, 1999 and not under the Customs Act. Though the show cause notice invoked Section 113(d) and 113(i) of the Customs Act but these provisions were invoked by only alleging ..... X X X X Extracts X X X X X X X X Extracts X X X X
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