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Sylvester & Co. Versus Commissioner of Customs (Export) , Mumbai

Violation of the provisions of Section 51 of the Customs Act, 1962 read with Section 147 proposing to impose penalties - whether the CHA is liable to penalty - Held that:- From the statutory provisions and the supplemental instructions issued, it can be easily seen that the responsibility of the CHA does not end with filing of the shipping bill. He has to ensure the assessment of the shipping bill, examination of cargo and obtain the ‘Let Export Order’ after which he has to contact the customs s .....

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the act or omission. Mere act or omission would suffice to attract the penalty. Thus applying these provisions to the facts at hand, the CHA failed to ensure that the goods were loaded on to the vessel only after ‘let export order’ was obtained, thereby making the goods liable to confiscation under section 113(g). For the omission on the part of CHA, he is liable to penalty under section 114(iii). - There is nothing in the language of the provisions of section 114 of the Customs Act, 1962, to s .....

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the Division Bench would prevail over the decisions of Single Member Bench. In view of the above, I am of the considered view that the appellant is liable to penalty under Section 114 of the Customs Act. - However, penalty is reduced - Decided partly in favour of appellant. - Appeal No.C/174/12 - Final Order No. A/733/2015-WZB/SMB - Dated:- 20-3-2015 - Mr. P.R. Chandrasekharan, Member (Technical) For the Petitioner : Shri.S.N.Kantawala, Advocate For the Respondent : Shri.C.Singh, Asst. Comm. (A .....

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09/10/2008 before Let Export Order was issued by the Customs authorities in respect of the said shipping bills. Therefore, a show cause notice was, inter alia, issued to the appellant for violation of the provisions of Section 51 of the Customs Act, 1962 read with Section 147 proposing to impose penalties. The notice was adjudicated and a penalty of ₹ 7.00 lakhs was imposed on the appellant-CHA in addition to penalties on the exporter and the steamer agent. The penalty was imposed under .....

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o load the container before LEO was obtained and shipping bills submitted to the shipping line. Thus, it is his contention that it is the fault of the shipping line and the appellant is not involved in the matter. The learned counsel also submits that in a similar matter in the case of The Universal Traffic Co. vs. Union of India wherein a penalty was imposed on the CHA for loading the goods on to the vessel without obtaining LEO, the matter has been taken up before the hon ble Bombay High Court .....

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. Commissioner (AR) appearing for the Revenue, on the other hand, strongly refutes the contentions raised by the CHA. He points out that in the impugned order, the adjudicating authority has given a clear finding in para 13 thereof, wherein he has observed as follows: 13. The exporter had procured the container, booked space in the vessel which was scheduled to depart on 09/10/2008 for their export cargo; had got the shipping bill Nos. 6713743 dated 30/09/2008, 6713773 dated 30/09/2008 and 67167 .....

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that the vessel was scheduled to leave on 09/10/2008. 4.1. He further submits that this Tribunal in a number of cases, namely, Zim Integrated Shipping Services (I) Pvt. Ltd. vide order No. A/347-348/13/SMB/C-IV DATED 25/07/2013, Patkar & Sons Shipping Agency Pvt. Ltd. 2013-TIOL-91-CESTAT-MUM; D.P. Logistics Pvt. Ltd. 2013 (288) ELT 107; Gill & Co. Pvt. Ltd. 2012-TIOL-900-CESTAT-MUM have held that the CHA is liable to penalty if goods are exported without obtaining LEO from the Customs Of .....

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as follows:- SECTION 50. Entry of goods for exportation. - (1) The exporter of any goods shall make entry thereof by presenting electronically to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. Provided that the Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically, allow an entry to be presented in any oth .....

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d loading of the goods for exportation. The exporter or the CHA on his behalf has to comply with the above statutory provisions. 5.2. The Customs Manual prescribes the detailed procedure to be followed which are briefly as under:- Customs clearance formalities for goods meant for export have to be fulfilled by presenting what are termed as shipping bills and other related documents to the export wing of the custom houses or EDI service Centres. The appraising staff in the Custom House/Air Cargo .....

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to light. Appropriate penal action as per law is initiated where any fraudulent practices get detected during initial stage of scrutiny or at the time of examination etc. These provisions similarly help customs to regulate the outflow of the goods out of the country and enable them to subject the goods to proper checks before allowing final exit out of the country by sea/air/land/rail routes. They also help detect any attempts of smuggling or commercial frauds by unscrupulous parties. 5.3. Para .....

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er gives a let export order, after which the exporter may contact the preventive superintendent for supervising the loading of goods on to the vessel. Thus from the statutory provisions and the supplemental instructions issued, it can be easily seen that the responsibility of the CHA does not end with filing of the shipping bill. He has to ensure the assessment of the shipping bill, examination of cargo and obtain the Let Export Order after which he has to contact the customs staff for loading o .....

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ation of which is a place outside India, without the permission of the proper officer shall be liable to confiscation; Thus any goods which are loaded on to a vessel without the Let Export order issued by the proper officer of customs shall be liable to confiscation. In such an eventuality, under section 114, - Any person who in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission .....

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nt of drawback claimed or one thousand rupees, whichever is the greater. Thus any act or omission to do any act, which renders the goods liable to confiscation attracts penalty. The said provision does not speak of the requirement of any mens rea on the part of the person committing the act or omission. Mere act or omission would suffice to attract the penalty. Thus applying these provisions to the facts at hand, the CHA failed to ensure that the goods were loaded on to the vessel only after let .....

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ining in the present case. It is not the case of the appellant that he did not know when the vessel was set to sail. In fact normally, the arrival and departure of the vessels are made known in advance to all the parties concerned by the shipping line. It is for the CHA to complete the formalities before the departure of the vessel. In the present case, the export documents had been filed on 30/09/2008 and 01/10/2008 whereas the vessel set sail only on 09/10/2008. Thus, adequate time was availab .....

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of the Customs Act is not a meaningless provision of law. It provides that the proper officer of customs may make an order for permitting clearance and loading of the goods for exportation, which would mean that the goods for exportation could not be loaded in the vessel without obtaining permission of the proper officer of customs. It is this permission of the proper officer of customs which is referred to as 'Let Export Order' (LEO) issued to the exporter and therefore the exporter is .....

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thout LEO or to have omitted to do anything to ensure compliance with the requirement of Section 51 of the Act must be held to have rendered the goods liable to confiscation. All the three appellants are coming within this domain and consequently they have a penal liability under Section 114 of the Act. Actual confiscation of the goods is not necessary for this penalty. A mere liability of the goods to confiscation is enough. 5.7. The same issue came up for consideration before this Tribunal in .....

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an offence by Statute proceeds on the assumption that society suffers injury by the act or omission of the defaulter and that a deterrent must be imposed to discourage the repetition of the offence. 4. Unless there is something in the language of the statute indicating the need to establish the element of mens rea it is generally sufficient to prove that a default in complying with the statute has occurred. A similar view was held by the Honble apex court in the case of SEBI vs. Shriram Mutual .....

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