M/S Natural Sugar & Allied Industries ... vs Commissioner Of Customs (Export), ...

(Arising out of Order-in-Original No. 12/2013-14 dated 25.3.2014 passed by the Commissioner of Customs (Export), JNCH, Nhava Sheva).

For approval and signature:

Honble Shri Anil Choudhary, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy : Seen of the order?

4. Whether order is to be circulated to the Departmental : Yes authorities? ======================================================

M/s Natural Sugar & Allied Industries Ltd. Appellant

Vs.

Commissioner of Customs (Export), Nhava Sheva Respondent

Appearance: Shri Prashant D Patil, Advocate for Appellant

Shri Chatru Singh, AC (AR) for Respondent

CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)

Date of Hearing: 09.06.2015

Date of Decision: 09.06.2015

ORDER NO.

Per: Shri Anil Choudhary

This appeal is filed by the appellant, M/s Natural Sugar & Allied Industries Ltd., against Order-in-Original No. 12/2013-14 dated 25.3.2014 passed by the Commissioner of Customs (Export), JNCH, Nhava Sheva whereby a penalty of Rs.5 lakh was imposed under Section 114(iii) of the Customs Act, 1962.

2. The brief facts of the case are that the appellants exported 24,000 bags of Plantation White Sugar using the services of a CHA M/s Haytrans (India) Pvt. Ltd. and a shipping line agency M/s Sai Sea Logistics (I) Pvt. Ltd. The factory stuffed container containing the aforesaid goods arrived at the port on 11.5.2007. The shipping bills were submitted to Customs on 14.5.2007 and the Let Export Order (LEO) was also made on 14.5.2007. However, it came to light that the containers were loaded on the vessel and it sailed from the Nhava Sheva Port on 13.5.2007 before the LEO was issued. A show-cause notice dated 25.1.2008 was issued to the Exporter-appellant alleging that the exporter did not produce the Shipping bills before the proper officer of Customs for grant of LEO and hence the goods were not cleared for exportation. The exporter including the CHA and shipping line were called upon to explain as to why the subject goods totally valued at Rs.1,72,59,790/- FOB should not be confiscated under Section 113(g) of the Customs Act and penalty should not be imposed under the provisions of Section 114 of the Customs Act. The show-cause notice was adjudicated vide the impugned order and a penalty of Rs.5 lakh was imposed on the appellant under section 114(iii) of the Customs Act.

2.1 Being aggrieved, the appellant is in appeal before this Tribunal.

3. The learned Counsel for the appellant submits that when the goods are stuffed at factory site and dispatched to the port for further processing of shipping bills and completing the customs formalities, then it is total responsibility of CHA to complete all the custom formalities. He also submits that the Shipping line M/s Sai Sea Logistic (I) Pvt. Ltd. loaded the sugar containers on the vessel without completing the customs formalities by the CHA, hence it is only the risk and responsibility of the shipping line and the appellant exporter is nowhere responsible for the act done by the shipping line. Accordingly, he prays for setting aside the penalty imposed by the impugned order and allowing the appeal.

4. The learned AR appearing for the Revenue reiterates the finding of the original adjudicating authority and prays for upholding the impugned order and dismissing the appeal of the appellant.

5. After hearing both sides and perusing the case records, I find that the exporter has no control over the goods, once the goods enter into the port of export. I also find that the matter is squarely covered by the decision of the Hon'ble Bombay High Court in the case of Commissioner of Customs (Export) Vs. Kusters Calico Machinery Ltd.  2010 (257) ELT 368 (Bom) Accordingly, following the ratio of Kusters Calico Machinery Ltd. (supra), I set aside the penalty imposed on the appellant-exporter and allow the appeal filed by the appellant.

(Pronounced in Court)

(Anil Choudhary) Member (Judicial)

Sinha

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