TMI Blog2018 (1) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia) Pvt. Ltd. - In Scope Amra Logistics (I) Pvt. Ltd. Vs. CCE [2015 (6) TMI 652 - CESTAT MUMBAI] it was held that in view of the role of the companies, the lapse is only confined to the non compliance of KYC and not involvement in the smuggling of Red Sanders. In view of this facts, I am of the view that the quantum of penalty on the Appellant companies are very higher side and the Appellant companies deserve reduction in the penalty imposed under Section 114(i) - penalties imposed on M/s. Bhavani Shipping Services (I) Pvt. Ltd. and M/s. Seaport Lines (I) Pvt. Ltd. set aside - the confiscation of the container in the present case is unjustified and requires to be set aside. Appeal allowed in part. - C/40108/17, C/40588/17 & C/40476/2017 - Final Order Nos.40014-40016/2018 - Dated:- 4-1-2018 - Ms. Sulekha Beevi, Member ( Judicial ) Shri J. Janakiraman, Advocate, (Sl.No.1) Shri G. Derrick Sam, Advocate, (Sl.No. 2 3) for the appellants Shri K. Veerabhadra Reddy, JC (AR) for the Respondent ORDER The appellants are aggrieved by the penalties imposed under Section 114 (1) and Section 117 of the Customs Act, 1962. 2. The brief facts are that on 02.03.2015, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of floor mats only. They came to know that the container was used for smuggling red sander logs only after the offence was detected by SIIB and when the container was seized. They do not have any direct transaction with the exporter and therefore they are under no obligation to obtain KYC details of the exporter. Their immediate client is M/s. Seaport liners (I) Pvt. Ltd. only. The appellant had submitted the KYC details of M/s. Seaport Liners. The authorities below have imposed penalty for the reason that the appellants had rented the container without verifying the KYC norms of the client. The client to the appellant being M/s. Seaport Lines, and the appellant having obtained the KYC details of M/s. Seaport Lines, there is no violation of any provisions of law on the part of the appellant. The penalty imposed as well as confiscation of the container is unjustified. He adverted to Section 113 and submitted that the said provision deals with confiscation of goods for export. That container would not fall into the category of goods, that any goods admitted to be exported or the container not being the goods bought for export cannot be confiscated under the said provision. Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gents are responsible for secure transit of goods from the customs area to any other customs area in accordance with the permission granted by the DC/AC. The appellant had out sourced the function of the transit of the container upto the Port to a customs broker without obtaining permission from the Commissioner as mandated in the Regulations. The Tribunal vide Final Order no. 43022/2017 dated 23.11.2017, had upheld the penalty imposed on the CFS agent (M/s. SEC Services Ltd.). This being the case, the appellant is liable or penalty under Section 114, for the reason that the said Section would be attracted in the case where a person omits to do any act if such omission would render the goods liable to confiscation. In respect of the appeals filed by M/s. Bhavani Shipping Services and M/s. Seaport Lines, the Ld. AR submitted that none of them had obtained the KYC details of the exporter. The failure to do so resulted in the commission of the offence. 5. Heard both sides. 6.1 The adjudicating authority has imposed penalty of Rs. Two lakhs under Section 114 (1) read with Section 117 on M/s. SEC Services Ltd., who is the CFS Agent. This Tribunal vide the above cited Final Order h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the present appellants whose role was to arrange and provide the empty container for export goods, cannot be implicated in the act of smuggling of Red Sanders. However, the appellants have knowingly about the Public Notice No. 17/2012 not complied with the KYC norms of the person Shri Rohit Mahadik who placed order for container. The said public notice clearly instructs the container lines, shipping line, freight forwarders, agents, sub-agents, etc., to follow the Know Your Customer (KYC) norms of the exporter/person seeking the container for stuffing of export cargo. The sole objective of the circular is to avoid smuggling of prohibited goods, especially Red Sanders. Therefore, by not following the KYC norms by the appellants, they made liable themselves for imposition of penalties. The ld. Commissioner has imposed penalties on both, i.e., on companies as well as on the employees of both the appellant companies, which in my view is not correct. From the records, it is not established that the employees have deliberately for their vested interest committed an act to make the goods liable for confiscation. From the nature of the offence committed in the present case, when the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Radhakrishnan. There is no evidence against the appellants regarding their involvement in the substitution of the cargo or tampering of the seal. In the circumstances, we confirm our prima facie view, set aside the confiscation of the container and the penalty imposed on M/s. Caravel Shipping Services Pvt. Ltd. 6.5. Similar view was taken in the case of Skyline Shipping Logistics Pvt. Ltd. (supra). 6.6. In IMSA Shipping Agency Pvt. Ltd. Vs. CC - 2002 (145) ELT 55 (cal.), the issue whether the container can be confiscated was discussed. It was held that a container is distinct from package. The Hon ble High Court of Calcutta observed that there is an option for release of the container after detaining and warehousing the goods. Therefore, the container cannot be subject to confiscation. 6.7. Taking into consideration the facts presented, I am of the opinion that the confiscation of the container in the present case is unjustified and requires to be set aside. 7. From the above discussions, the impugned order is modified to the extent of setting aside the penalties imposed on M/s. Bhavani Shipping Services (I) Pvt. Ltd. and M/s. Seaport Lines (I) Pvt. Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
