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2022 (7) TMI 418 - AT - CustomsLevy of penalty on Exporter and CHA - consignments of rice were exported to Iran but delivered/diverted/discharged at Jabel Ali Port, Dubai and sold in UAE whereas the payments were received from Iranian buyers in Indian currency - whether 50 consignments of rice exported by M/s. SSIGPL were sold in UAE or ultimately reached Iran after these consignments were off loaded at Jabel Ali Port, Dubai? - HELD THAT:- M/s. SSIGPL lost the ownership of the goods as soon as ‘let export order’ was issued by the Customs authorities. After the said let export order it was the responsibility of the Shipping Lines to ship the goods to the foreign buyer and the exporter having no control over the goods. We have already held that M/s. SSIGPL had given instructions to change the port only in five cases out of 50 that too after the cargo had left the port. In remaining 45 cases there is no material on record that M/s. SSIGPL had given any instruction to change the port. Hence M/s. SSIGPL cannot be held responsible if the importer situated at Iran had given instruction to change the port from Bandar Abbas port to Jabel Ali port as after the ‘let export order’ was issued by the Customs authorities it was the importer at Iran who became the owner of the goods. 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 violation of para 2.53 of the FTP and section 8 of FEMA, 1999 - FEMA authorities had initiated inquiries against M/s. SSIGPL and its director and they have penalized them with respect to only one consignment which was mentioned at S.No. 25 of the table which was presented before the FEMA authorities. But the crucial aspect of the matter is that in the adjudication proceedings by FEMA authority it has been held that all the 50 consignments ultimately reached Iran through Jabel Ali port, Dubai. Levy of penalty on M/s. SSIGPL again on the ground that the goods were actually sold in UAE and export proceeds were received from a third party in Iran - HELD THAT:- The overwhelming evidence clearly establishes that Jabel Ali port was only used as transit port wherefrom the goods were further exported to Iran. Hence there is no justification for sustaining penalty upon M/s. SSIGPL under Section 114 and 114AA of the Customs Act. We therefore set aside the penalty upon M/s. SSIGPL. Levy of penalty on Shri Aman Gupta, Director of M/s. SSIGPL - HELD THAT:- Since there is no violation committed by M/s. SSIGPL there is alsono warrant for sustaining penalty on Shri Aman Gupta, Director of M/s. SSIGPL, which is also set aside. Levy of penalty on M/s. V. Arjoon, CHA, Shri Tushar H. Anam, partner of M/s. V. Arjoon - HELD THAT:- As it is already held that the goods were ultimately delivered to the buyers at Iran, there is no justification for imposing penalty upon the CHA. Appeal allowed - decided in favor of appellant.
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