Thursday, September 17, 2020

Red sanders Illegal export - Levy of personal penalty for abetment on transporter and Customs Broker – Latest Judgement

 “X’ is a transport agent who arranged a truck for the export and “Y” acted as Customs Broker for clearance of the goods and “Z” arranged Customs broker and Ocean freight. ( herein  after called as the parties )

The goods were stuffed at factory in  the presence of Director of the exporter company and Superintendent of Central Excise ( year 2014 case )  and thereafter  it was sent to Port for exportation. Post sailing of vessel, DRI came to know that Red sanders illegally shipped hence container was called back to India.

Customs Dept. imposed personal penalty under Section 114(i) of the Customs Act on the X,Y & Z ( i.e transporter and Customs Broker and other party ) also. Is it tenable ?

No. The parties have rendered their routine service of arranging for container and Customs clearance service to earn for their livelihood within the bounds of law. During the investigation, DRI recorded the statement of Director of exporter company and also the parties . In the statement shipper has clearly stated that he was responsible for smuggling of red sander wood logs and the others were not knowing about their smuggling plan.

Further Customs authorities in their orders have admitted that there is no direct proof of the complicity of the parties and there is suspicion against each of them and on the basis of that suspicion penalty imposed on them.

In the case of Collector of Customs, Madras and others Vs. D. Bhoormull wherein the Apex Court has observed that “ the law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue

SECTION 114. Penalty for attempt to export goods improperly, etc. - 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 of such an act, shall be liable, -

(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act, whichever is the greater;

It is pertinent to note that the Tribunal in various decisions consistently held that for imposing the personal penalty under Section 114(i) of the Customs Act, 1962, there should be acceptable legal evidence on record about the acts of commission or omission by the parties. Further, in order to hold that the parties has abetted in the commission of the offence, there has to be a knowledge on the part of the parties  regarding the illegal activities of the exporter whereas in the present case no corroborative evidence has come on record which pinpoint that the parties had the knowledge of the illegal activities of the exporter company.

The impugned order is not sustainable in law & penalty also set aside.

SACHIN KUMAR ( Transport agent )  VERSUS Commissioner of Customs MANGALORE, CESTAT BANGALORE, decided on 14.09.2020

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