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TMI Blog2023 (9) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... AT AHMEDABAD ]. Accordingly, mens rea not having been established in the instant matter, penalty imposed under Section 112A of Customs Act, 1962 is not sustainable. Appeal allowed. - MR. SOMESH ARORA, MEMBER (JUDICIAL) AND MR. C.L MAHAR, MEMBER (TECHNICAL) Shri Vikas Mehta, Consultant appeared for the Appellant Shri Rajesh Nathan, Assistant Commissioner (AR) for the Respondent ORDER Appellants are a licensed Container Freight Station licensed to operate as such for facilitating import and exports through containers. In one of the matters in their jurisdiction intelligence was gathered by Special Intelligence and Investigation Branch (SIB) Officers, Custom House, Mundra, that two Containers No. IALU 4562327 TALU 44561001 stuffed with cosmetics items mis-declared as Baby diapers in IGM were going to be cleared from Mundra Custom House, the same was continuously tracked and monitored through EDI System after arriving at the Mundra port. It came to notice that both the containers were removed clandestinely by way of generating producing bogus Custom documents viz. Bills of Entry, Invoice, Packing list on 16.09.2015. Taking cognizance of same, immed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Station for further examination of goods. Hence the officers of SIIB, Custom House, Mundra informed Deputy Commissioner of Customs, ICD, Sachin, Surat vide letter dated 18.09.2015 for seeking permission to gate in both the containers and to make necessary arrangement for examination of goods. 1.4 During the course of examination of goods in containers vide panchnama dated 18.09.2015. it was noticed that the alleged bogus/fake Bills of Entry No. 2564071 dated 11.09.2015 2569697 dated 12.09.2015 inscribed the name of M/s Season International Pvt. Ltd., Mumbai (IEC 0494026693) and M/s Intec Poly Pvt. Ltd., Mumbai (IEC 0409001851) as importers name, Custom Broker as M/s M/s Briano Marine, PAN based CB (AETPR2783QCH001) respectively for import of goods as declared Baby Diapers . The Seal No.012050 in Container No. IALU4561001 and Seal No. 012017 in Container IALU4562327 were found in intact condition as per the Seal No mentioned in respective Bill of Lading. The Seals of containers were then cut and goods were de-stuffed in the warehouse located at ICD, Sachin, Surat. Further examination of goods, it was found that the cartons stacked in front rows were only containing Diapers, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning in both the containers were seized under Section 110 of the Customs Act, 1962 under the reasonable belief that same are liable for confiscation under the provisions of Section 11 (e), (f),(j) of the Customs Act, 1962, vide seizure memo dated 21.09.2015. Various statements during course of investigation were recorded. 1.6 From the investigation conducted, evidences collected and the statements of the accused persons recorded, it was evident that Suresh Makwana, Sunil Jungi, Sanjay Patyane, Linesh Rane, Nilesh Chavan and Arif Mohammad Shaikh all were knowingly concerned in this organized smuggling of cosmetics and cigarettes by way of filing bogus Bills of Entry and further clearing the same fraudulently resulting into huge loss of government revenue. They had cleared totally 18 containers from Mundra Customs by adopting the same modus operandi the details of which is given below: TABLE Sr. No Bogus Bills of entry Bogus BE date Container No. Desp. Of Goods declared in bogus bill of entry CFS from where containers were rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 CLHU233 3194(20) Tenderizer For sea food Ashitosh CFS Mundra 1081021 Not known 311895 10 9983789 22.07.2015 SEGU109 2633(20) Footwear of plastic sole Ashitosh CFS Mundra 491906 Not known 125083 11 2182970 10.08.2015 PAAU200 1137(20) Baby diaper Ashitosh CFS Mundra 491906 Not known 125083 12 2257947 17.08.2015 LALU2 127188 Containing gypsum board Ashitosh CFS Mundra 491906 Not known 125083 13 2255579 17.08.2015 LALU21 27188(20) Tenderizer food Ashitosh CFS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated by the miscreants; they invited attention of the Public Notice No. 24/2007 dated 31.05.2007 ( Public Notice ) issued by the then Commissioner of Customs, Kandia, laying down the procedure for Customs clearance at the CFS, considering that at the time of commencement of CFS operations, Mundra was under jurisdiction of Custom House, Kandla and argued that the SCN does not allege deviation from the procedures laid down in the above Public Notice; that the entire basis of the Show Cause Notice is a fraud committed by the miscreants; that the bills of entry were fabricated and signatures of officers were forged. Consequently, the employees of CFS before whom these forged papers were tendered took them for real and acting as per Public Notice as well as verbal instructions of Custom officers posted at the Custom House from time to time, they have ensured that after completion of delivery of imported goods, the duplicate copy of all the bills of entry is invariably sent to Custom House for post-clearance verification. Accordingly, the duplicate copy of all the bills of entry, including the incriminating bills of entry listed in the SCN, were unfailingly submitted to Custom House, Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the CFS were available on EDI system/record of Custom House, Mundra, the CFS was able to immediately provide the entire set of documents including those bearing the original signatures and stamps of the Custom officers of Mundra, based on which delivery was given. The CFS also provided the details/photographs of vehicles (trucks), truck drivers, CCTV footage, etc. and it is a matter of record that information as well as CCTV footage, etc. provided by the CFS on 21.09.2015 has proved to be of immense help to the Department in locating and intercepting the containers with imported goods inside. These inputs also helped the Department to apprehend the culprits and arrest them; that the allegation regarding carelessness, etc. on the part of employees or CFS are far from truth. In view of above, they stated that they are not liable for penalty under the provisions of Section 112 (a) of Customs Act, 1962. 1.9 Learned Commissioner of Customs House, Mundra vide following findings disposed off of appeal imposing penalty under Section 112A, holding the appellant vicarious liable for omission of the employees as follows: Penal action proposed against Container Freight Stations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e(Documents) at Ashutosh CFS recorded under Section 108 of the Customs Act, 1962. he has stated that during the verification of document pertinent to the bill of entry under which clearance was taken, he noticed the name of custom broker for the first time and he has some doubts on verification of the genuineness of the bill of entry through ICEGATE, it displayed No record Found , but he allowed the clearance as the document produced appeared to be genuine and many times ICEGATE show such type of error due to slow server. The reason given by the employee in allowing the exit of import cargo even after noticing on verification of genuineness of bill of entry from ICEGATE that NO RECORD FOUND is not at all convincing, as in a situation of slowness of server, sites display error but never display the wrong message as NO RECORD FOUND . Such a message will be displayed only if wrong bill of entry number is entered or bill of entry is not filled. Therefore, if he had noticed such message on the screen, it was his duty to ask customs officer concerned and get the documents verified. But in their submissions, the said CFS, silently ignoring all such aspects, has disowned the responsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Thapar Vs. Commissioner of Customs reported in 1993(64) ELT 31(Tribunal) wherein, the Hon'ble tribunal by citing the Supreme Court order in AIR 1997, SC 1627 has held that there is no hard and fast rule in quasi-judicial proceedings in allowing cross examination and it is to be determined depending on the circumstances of the case. In case of Commissioner of Customs, Chennai Vs. D. Bhoormull, reported in 1983 (13) ELT 1546 (SC), the Hon'ble Supreme Court has held that the provisions of the Evidence Act as well as Code of Criminal Procedure, in terms, are not applicable to the adjudication proceedings. Further, Hon'ble Madras High Court, in the case of K. Balan Vs. Govt. of India, reported in 1982 ELT (386) Madras, had held that right to cross examination is not necessarily a part of reasonable opportunity and depends upon the facts and circumstances of each case. It largely depends upon the adjudicating authority, who is not guided by the rules of evidence as such but who must offer such opportunity to the party concerned as would assure him proper opportunity to defend himself It would, however, be in the interest of justice and fairness to the parties, that the oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to show statements not voluntary or effectively retracted within close proximity of the time these were detained. 1.16 In light of the discussions on above, I distinguish the conduct of M/s Ashutosh CFS from other 2 CFSS and hold that M/s Ashutosh CFS by their acts of omissions, have rendered the goods liable for confiscation as per provisions of Section 1110) of the Customs Act, 1962 and thus they are liable for penalty under the provisions of Section 112 (a) of the Customs Act, 1962. 1.17 Accordingly, learned Commissioner Customs imposed penalty of Rs. 50 Lakh on the appellant under Section 112A of the Customs Act, 1962. The Learned Counsel for the party submitted that the Section 112A does not permit vicarious liability to be placed upon employer for any lack of diligence of employer, specially when such employees has not even being made party to the SCN. In any case there was no wrong doing even on the part of employee as he was as diligent compare to employees and employer involved of 2 more container freight station who did the same and checked status on ICEGATE as per statement dated 26.11.2015 of Ritesh Devda and statement dated 26.11.2015 of Shri Mukesh Sharma (bot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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