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2023 (9) TMI 1405 - AT - CustomsIllegal export of prohibited goods - red sanders - Suspension of approval which was granted to the appellants for operation as Customs Cargo Service Provider (CCSP) for a period of 15 days - Penalty u/s 117 ibid and Regulation 12(8) of HCCAR on appellant-custodian - recovery of the value of pilfered goods under Regulation 5(6) of HCCAR - removal of seized red sanders kept in safe custody in the appellants CFS, by substituting the container having seized goods with another empty container pasted with same unique container number, similar to the seized goods container, by certain unscrupulous elements - violations of clauses (a), (b), (f), (i) and (q) of sub-regulation (1) of Regulation 6 of Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR) and Sections 45(2), 141 of the Customs Act, 1962. HELD THAT:- It is a clear case of prohibited goods attempted for illegal export which were thwarted by SIIB wing of JNCH Customs by taking timely action and thus such export goods attempted for illegal export was rightly seized as the same were liable to confiscation under Section 113 of the Customs Act, 1962. The argument advanced by learned Advocate for the appellants that the seized container was not an export cargo, but was kept in safe custody as a courtesy to customs department and the copy of Panchanama was not available with them, is factually incorrect. The memorandum attached to the Finance Bill, 2008 provides full information and, purport and effect of the delegation of power to subordinate authorities, the points which may be covered in the area of delegation, the particulars of subordinate authorities who are to exercise the delegated powers, and the manner in which such power is to be exercised, in respect of the above amendment. Thus the sub-section (2)n of Section 141 became part of the Customs Act, 1962, upon passing of Finance Act, 2008 w.e.f. 10.09.2008. Therefore, the Handling of Cargo in Customs Areas Regulations, 2008 (HCCAR) which had been framed by CBEC in exercise of the powers thereof, as provided under Section 141(2) ibid, has proper force of law. Thus, an order passed by the learned Commissioner in exercise of the powers vested with him under Regulation 12(7) of HCCAR for suspension, imposition of penalty is legally sustainable. From the detailed analysis of the background of the legislation for incorporating Section 141(2) in the Customs Act, 1962, and the formulation of HCCAR, it is clear that custodians appointed under Section 45(2) ibid, subsequent to the implementation of HCCAR, were also required to be approved as CCSP for handling of import/export goods in a customs area under Section 141(2) ibid and HCCAR. Considering the factual position that the appellants were notified by the jurisdictional Commissioner of Customs for handling both the export and import containers as well as for processing of related documents, right from the beginning vide various notifications dated 18.07.1999, and subsequent renewals vide notifications dated 11.11.2003, 21.03.2006, 04.01.2011 and thereafter periodically till the last renewal on 14.10.2020, the appellants cannot escape from the responsibilities and obligations cast upon them as CFS operator and CCSP under HCCAR for proper handling of import/export goods as mandated under Section 141(1) and (2) ibid. The nature of the goods have clearly proved as ‘export goods’ and precisely for the illegal act of export, the customs authorities have initiated action on various persons concerned separately the provisions of Customs Act, 1962. Therefore, the argument advanced by the learned Advocate for the appellants that the goods under seizure, which were pilfered, are not ‘export goods’ do not find any support of law. It is clearly proved by the factual reports arising out of the investigation conducted by Customs and Police authorities, and hence there are no hesitation in arriving at the conclusion that the appellants did not fulfil the conditions of Regulation 5(1)(i)(n) and 6(1)(i), by their failure to restrict unauthorized access into the premises and allowing the pilferage of goods and by their failure to provide safe and secure storage facility of customs seized goods kept in the containers within CONCOR-DRT CFS premises and allowed certain unauthorized persons to remove the customs seized goods. The responsibility of the custodian under Section 45(2) is to keep the imported goods in safe custody, maintaining of records and not to permit its removal without any authorization from Customs. The absence of proper system of security, control and maintenance of records in the present case of seized export goods mutatis mutandis apply to the imported goods also. Hence the appellant cannot escape from the responsibilities and obligations cast upon them as CFS operator under HCCAR for proper handling of import/export goods. In view of this, the appellants have failed to fulfil the responsibilities entrusted on them under Regulation 6(1)(a) and 6(1)(b) of HCCAR. Section 117 of Customs Act, 1962 provide for imposition of penalty on any person who contravenes any provision of the said Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, to be liable to a penalty not exceeding four lakhs rupees. The maximum amount of penalty prescribed under Section 117 initially at Rs. One lakh was revised upwards to Rs. Four lakhs, with effect from 01.08.2019 - The detailed discussions clearly prove that the appellants not only failed to fulfil the conditions and to abide by the responsibilities reposed on them as CCSP, but also failed to rectify the situation as one another attempt was made again for illegal removal of seized red sanders, which was identified by SIIB Customs on 14.08.2014. Hence, there are clear violations of the HCCAR and Section 141(2) of the Customs Act, 1962 by the appellant and thus we do not find any infirmity in the impugned order imposing penalty under Section 117 ibid on the appellants. The appeal filed by the appellants is dismissed.
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