9911796707
TMI Blog2015 (6) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... he container were tampered with red sanders were seized under mahazar 13807. On detailed investigation and statement recorded from various persons including the appellants T.V. Shanmugam (appellant), P. Bhaskaran, Clearing Clerk of M/s.Sankari Seasky Cargo, Chennai, K.Chandrsekaran, J.Lakshminarayanan, V.Sivasankar, Proprietor of M/s.Win Exports and Shri K. Shanmugam and Shri R.Chitty Raja. Detailed investigations revealed that M/s.Win Exports had not made any export and V.Sivasankar, the proprietor of above firm never signed any document nor gave any authorization to anyone to make export or import on their behalf. On completion of the investigation, the Additional Director-General, DRI issued show cause notice dt. 9.1.2008 to both exporters and to other co-noticees including the appellants for imposition of penalty. The Commissioner of Customs, Chennai by the impugned order ordered for absolute confiscation of red sander logs and imposed penalty on R.Chitty Raja, K. Shanmugam, R. Bhaskaran. He also imposed penalty of Rs. 5 lakhs on T.V. Shanmugam, (1st appellant herein), proprietor of M/s.TVS Shanmugam, the CHA and Rs. 5 lakhs on M/s.Sanco Trans Ltd. (2nd appellant) under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olluded with persons in the smuggling. Based on the documents filed by the authorized persons of the exporter, he allotted space and the declared the goods were allowed to be brought inside the CFS and the goods were examined and sealed by the Customs Preventive officers with customs seal. The container was allowed to be transported to the gateway port for export. They are only a custodian of goods which are brought by the importer or exporter or their agents and they have not played any positive role in the smuggling of red sanders nor they have colluded with anybody in the act of smuggling. Without establishing mens rea no penalty can be imposed on the appellant under Section 114. He relied on the above Hon'ble Madras High Court order dt. 8.1.2015 and pleaded to set aside the order. In respect of waiver of penalty on both appellants, he relied on the following judgements : 1) CC (EP) Vs P.D.Manjrekar - 2009 (244) ELT 51 (Bom.) 2) Neptune's Cargo Movers Pvt. Ltd. Vs CC (Export), Chennai 2007 (219) ELT 673 (Tri.-Chennai) 3) D.H.Patkar & Co. Vs CC (Import) Mumbai 2008 (229) ELT 612 (Tri.-Mumbai.) 4) CC (Export) Mumbai Vs Rajasthan Spinning & Weaving Mills Ltd. - 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 114 of the Customs Act. The adjudicating authority has imposed a penalty of Rs. 5 lakhs each on the first appellant M/s.T.V.Shanmugam, Proprietor of T.V.Shanmugam, CHA and second appellant M/s.Sanco Trans Ltd., CFS. The whole issue relates to smuggling of red sanders weighing 16400 MTs against the declared export cargo of Natural Slate Stones under Shipping Bill No.2750183 dt. 9.8.2007 filed in the name of M/s.Win Exports. The adjudicating authority has discussed the modus operandi of smuggling and Red Sander and the persons involved in the smuggling activity. The adjudicating authority ordered absolute confiscation of red sanders and imposed penalties on various co-noticees including the appellants. 11. RECORD OF FINDINGS & CONCLUSION :- Appeal No.C/12/2009 filed by Shri T.V. Shanmugam In respect of this appellant, the adjudicating authority held that appellant being a CHA he has signed the shipping documents for third party without verifying the genuineness who was not authorized by the exporter to handle the documents. He has not seen the exporter. Instead he has signed shipping documents produced by P.Bhaskaran, a clearing clerk of M/s.Sankari Seasky Cargo. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in the normal course of his service. He signed the customs document given by some Shri S.S.Sivakumar for monetary considerations, which paved the way for unauthorized persons access to the customs clearing formalities and enabled unscrupulous persons in facilitating the smuggling of prohibited goods." 6. With regard to the above said finding of the Original Authority, the Tribunal, in the order under challenge, held as under: "4. I find that apart from a vague allegation in para 51 of the impugned order (supra) that the appellant had failed to discharge his functions as a CHA, in the entire order, there is no finding of a positive role of the appellant in the attempt to smuggle out red sanderwood logs or the manner in which he abetted the attempt. For failure to discharge functions as a CHA, penalties are provided in the Custom House Agents' Licensing Regulations. In the absence of any finding showing that the appellant had abetted the failed effort to smuggle out prohibited red sanderwood logs, I find that penalty imposed on the appellant under Section 114(i) is not sustainable. Accordingly, the appeal filed by Shri I.Sahaya Edin Prabhu is allowed." 7. The Tribunal has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby they reconfirmed their legal responsibility for safe transport of the export goods from the CFS to the Gateway Port in terms of the custodian Bond executed by them. Conditions 3, 4 and 8 of the said Bond executed by M/s.Sanco Trans Limited with the Customs authorities are relevant to the present proceedings and are reproduced below for sake of clarity: "3. If the custodian transport the respective consignment of such export goods as are allowed by the Commissioner of Customs, Chennai in this regard from Sanco CFS, Chennai directly to the Port of Chennai, by road. 4. If the custodian furnished documentary evidence to the satisfaction of the Commissioner of Customs. Chennai within one day from the date of dispatch of the settled containers containing export goods from Sanco CFS, Chennai to Port Chennai or within such extended time as the Commissioner of Customs, Chennai may allow that the export goods to be exported through sealed containers have reached the gateway port in full. ...... 8. The liability of this bond shall also cover safety and security of the cargo being transshipped by Sanco CFS from Chennai Port to their CFS and vice versa in their capacity as carrier and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self which is handled by Port Trust Authority appointed under Port Trust Act. Therefore, it is evident from the above discussions that being custodian of the cargo as CFS, the appellant had failed from their primary responsibility entrusted with them for safe transport of the sealed container to the gateway port. Appellant s another contention that penalty cannot be imposed on the appellant under Section 114 as no mens rea has been established by the department is not acceptable and not tenable. The appellant relied on the High Court decision which is related to CHA. The role of CFS as custodian of cargo cannot be equated with the role of Custom House Agent and the CFS obligations and roles are entirely different from the role of CHA. Therefore, the decision relied by the appellant are not relevant to the facts of the appellant's case and the facts are distinguishable. In this regard, I rely on Hon ble Madras High Court s order in CC Vs Bansal Industries (supra) relied upon by Revenue wherein the Hon ble High Court allowed the Revenue s appeal by relying on Hon ble Supreme Court s decision in the case of Chairman, SEBI Vs Sri Ram Mutual Fund [2006 (5) SCC 361 held that fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bligation attracting levy of penalty. Therefore, the order of the Tribunal is liable to be set aside." The ratio of above judgement is squarely applicable to the present case. 13.1 Further that Hon ble Supreme Court in the case of Pine Chemical Suppliers Vs CC (supra) has held that in para 10 & 11 the question of mens rea is not relevant for liability to confiscation and penalty and the adjudicating authority has clearly relied the Apex Court's decision in this case. Therefore, by respectfully applying the ratio of judgements of Hon ble High Court and Apex court (supra), I hold that appellant failed to deliver the sealed container from their CFs safely to the gateway port. Therefore, the adjudicating authority had rightly imposed penalty under Section 114 of the Customs Act. However, taking into overall facts and circumstances of the case, the penalty imposed on the appellant is reduced from Rs. 5 lakhs to Rs. 2,50,000/- (Rupees Two lakhs fifty thousand only). The impugned order in respect of this appellant is modified to this extent. Accordingly, appeal No.C/26/2009 is partially allowed by reduction in penalty as above. 14. In view of above discussion and findings, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
