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M/s. Chakiat Shipping Services Pvt. Ltd., M/s. Caravel Shipping Services Pvt. Ltd., Shri V.S. Krishnan, M/s. NYK Line (India) Ltd., M/s. Bengal Tiger Line (India) Pvt. Ltd. Versus Commissioner of Customs (Exports) , Chennai

2015 (9) TMI 1016 - CESTAT CHENNAI

Appeal No. C/176 & 177/2007 Mis-declaration of port of discharge – Smuggling of red sander – Customs alleged that appellants had close intimacy to mis-declaration of port of discharge – Goods although was destined to Malaysia however shipping bill was made to show port of discharge as Colombo – As a result of mis-declaration appellants were penalized under section 117 of Customs Act, 1962 – Held that:- admitted case of mis-declaration of port of discharge as is revealed from documents filed to .....

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discharge – Therefore imposition of penalty on both is justified – Decided against Appellants.

Appeal No. C/191/2007 Mis-declaration of port of discharge – Smuggling of red sander – Held that:- Appellant was actively involved in mis-declaration of port of discharge – In course of smuggling, whisper about modus operandi comes up – As member of racket this appellant had not isolated him – He was contributory to smuggling concealing material fact till discovery by investigation – Plea .....

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7 Mis-declaration of port of discharge – Smuggling of red sander – Held that:- Law is very clear as to role of vessel operator when combined reading of section 41 and 42 of Customs Act is made along with contents of EGM in Form 66 – Clear from Form 66 that contents and nature of goods, weight thereof, description of shipping bills as well as details of consignor and consignee appearing in Form No. 66 was well within knowledge of commander of ship who certified description in that form – Shippin .....

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not to allow same to be loaded into vessel – Thus, vessel operator having conscious knowledge of mis-declaration and exporting prohibited goods – Therefore, it is not at all proper to intervene to adjudication for which both appeals are dismissed – Decided against Appellants - Appeal Nos. C/176 & 177/2007, C/191/2007 and C/227 & 228/2007 - Final Order No. 40652-40656 / 2015 - Dated:- 16-6-2015 - Shri D.N. Panda, Judicial Member, J. For the Petitioner : Shri Derrick Sam, Advocate, Shri Akhil B .....

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posed by this common order. C/176 & 177/2007 2. The racket of red sander smuggling when busted out that brought the present appellants in this batch of appeals to the fold of law. The case against M/s. Chakiat Shipping Services Pvt. Ltd. and M/s. Caravel Shipping Services Pvt. Ltd. was booked by Customs alleging that they had close intimacy to the mis-declaration of the port of discharge. The goods although was destined to Malaysia and also loaded in the vessel bound to that destination ship .....

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7.5.2005 was filed for that concern. Similarly, M/s. Chakiat Shipping Services Pvt. Ltd. came into fold when the customs found that the said appellant was also party to the misdeclaration of port of discharge. Learned adjudicating authority has recorded role of M/.s Caravel Shipping Services Pvt. Ltd. in para 5 of his order. According to investigation one Shri V.S. Krishnan, freight forwarder as partner of M/s. Premier Shipping Agency and appellant in appeal No. C/191/2007 in this batch of appea .....

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V. Tiger Pearl V. 283 with destination port as port Kelang. The documents for EGM declared the container to be delivered in Colombo. 4. Learned adjudicating authority has also brought out how M/s. Caravel Shipping Services Pvt. Ltd. was well aware about the destination of the export of the red sanders to Malaysia. The goods were shipped for delivery in Malaysia but no Colombo as stated in shipping bills. Similarly, the manner how smuggling of red sanders occured within the knowledge of M/s. Cara .....

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artner of M/s. Premier Shipping Agency, Chennai was in contact with Chitty Raja and his connection was also with Krishnan. The origin of red sanders and its destination was known to M/s. Caravel Shipping Services Pvt. Ltd. Adjudicating authority therefore did not rule out role of M/s. Caravel Shipping Services Pvt. Ltd. who misdeclared Port of discharge as Colombo while the real port was found to be Kelang, Malaysia. Shri Kumar and Chitty Raja were arrested on 23.5.2005 under COFEPOSA for breach .....

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ent was corroborated from statement of one N. Chandrasekhar, Senior Manager, Operations, M/s. Bengal Tiger Line (India) Pvt. Ltd. Chennai in respect of shipping bill No. 2058991 dated 6.5.2005 (Ref: para 29 of adjudication order). Similar such corroboration came out when Shri H. Gokulkrishnan, Assistant Manager (Operations) of M/s. NYK Line (India) was examined on 27.5.2005 under section 108 of Customs Act, 1962 (Ref. para 28 of adjudication order). 7. With the aforesaid background, penalty of & .....

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of discharge. Accordingly, they should not be penalized. 9. Revenue on the other hand supports the case of customs. 10. Heard both sides and perused the record and examined the submissions. 11. It is an admitted case of mis-declaration of port of discharge as is revealed from the documents filed to form part of EGM which connected both the appellants. Customs area being a sensitive area, there was nothing to be hidden by the parties working in that area and particularly when connected with the e .....

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not permitted to be exported from India and the appellants assigned themselves to such export, they are not immune from penal consequence of law. 12. The plea of the appellants that imposition of penalty was uncalled for fails to stand when they were party to mis-declaration making documents for filing of EGM. These two appellants having been intimately connected with the red sander export had conscious knowledge of the port of discharge. Accordingly, imposition of penalty on both of them is jus .....

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nected with dispatch of the goods to a wrong destination. On the basis of the letter received from Ascending Impex he acted in good faith. His role was limited. His arrest does not ipso facto bring him to the fold of penalty under section 114(i) of the Customs Act, 1962. Therefore, the proceeding against him fails to sustain since he had not issued shipping bill. That was issued by CHA. 14. Revenue supports adjudication. 15. Reading of para 15 of the adjudicating order reveals that Krishnan was .....

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o. Accordingly, Bill of Lading was issued for that port. Request was made to the counterpart of Colombo to issue Bill of Lading to Port Kelang. His statement also reveals that the containers were loaded into vessels bound for Malaysia. That vessels did not go to Port in Colombo nor any transshipment was made to Colombo and the shipper asked for switch bill of lading. No amendment was intimated to customs about the port of discharge. 16. The smuggling racket of red sanders had a team. Smuggling d .....

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pellant, he was actively involved in mis-declaration of the port of discharge. In the course of smuggling, whisper about the modus operandi comes up. As a member of the racket this appellant had not isolated him. He was contributory to the smuggling concealing material fact till discovery by investigation. The plea that the appellant had given his evidence under section 108 under duress failed to lend any credence for the reason that after seven months of recording of the confessional statement, .....

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nfirmed. Appeal is dismissed. C/227 & 228/2007 18. As regards M/s. NYK Line India Ltd. and M/s. Bengal Tiger Line India Pvt. Ltd., Customs found these two appellants were subjected to penalty under section 117 of the Customs Act, 1962 due to their involvement in the smuggling of red sanders as a vessel operator. They were implicated in respect of four consignments exported carrying red sanders through the container Nos. CRXU 2210365; CRXU 2512529; FSCU 3874077 AND TRIU 3743086 covered by shi .....

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el MV Sagar VOY:011. Such cargo was delivered at the port of discharge Kelang in Malaysia. He also stated that there was contravention of provision of section 41 of the Customs Act since the certificate issued in the EGM was untruthful. The EGM No. 6801 was based on the details given by the liner agents. 19. Similarly, two consignments of red sanders covered by shipping bill No. 2058991 dated 6.5.2005 and 2052145 dated 27.4.2005 were also consigned by M/s. Carvel Shipping Services and M/s. Box T .....

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e led by the appellant did not convince the adjudicating authority for which these two appellants were imposed penalty of ₹ 10,000/- each under section 117 of the Customs Act, 1962. 21. Learned counsel Dr. Sunita Sundar appearing on behalf of both the appellants submitted that the vessel operators had no scope to know about the act of the shippers and liner agents. They were innocent as a mere carrier of the goods without being involved with the goods carried in the vessel. If at all there .....

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tion 50 of Customs Act and such goods left India. 22. It was further submission of the appellants that they were innocent and having no knowledge about mis-declaration of the port of discharge should not face any penalty. 23. On the other hand, Revenues contention is that vessel operators had knowledge about the goods, nature thereof and also the destination of the goods. Therefore, they were rightly dealt under section 117 of Customs Act, 1962. 24. Heard both sides elaborately and also gone th .....

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It is clear from the Form 66 filed by the commander of the ship before the customs authority to get let export order that contents and nature of the goods, weight thereof, description of shipping bills as well as details of the consignor and consignee appearing in Form No. 66 was well within the knowledge of the commander of the ship who certified the description in that form. 26. The statement recorded from Gokulkrishnan, Assistant Manager (Operations) of M/s. NYK Line (India) Chennai and Shri .....

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of law in para 29 & 30 of the adjudication order, they did not deny about the shipment of the goods in the respective container meant for delivery in Port Kelang, Malaysia although port of discharge was declared in shipping bills as Colombo. They also did not rule out filing of the EGM with the description of the contents in the shipping bills. This clearly shows that the principles of cavet amptor makes the vessel operator liable for their conscious knowledge about the goods shipper, descri .....

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s not rule out breach of trust made by the appellants and their commitment of breach of law. Those two appellants carried the goods to the destination Malaysia. When the vessels were bound to that destination, still then they allowed loading of goods misdeclared to be delivered in Colombo. It does not appeal to common sense how these two vessel operators were not aware about the destination, contents, nature of goods, consignor and consignee of the exported consignment as well as port of dischar .....

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