Skyline Air Logistics Ltd vs Commissioner Of Customs

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. II

APPEAL No.C/649/11

(Arising out of Order-in-Appeal No.116/Mumbai-III/2011 dated 23/05/2011 passed by Commissioner of Customs (Appeals), Mumbai-59)

For approval and signature:

Honble Mr. P.R. Chandrasekharan, Member (Technical)

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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?

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Skyline Air Logistics Ltd., Appellant Vs. Commissioner of Customs (CSI Airport), Mumbai Respondent

Appearance: None for appellant Shri.A.K.Singh, Addl. Comm. (AR), for respondent

CORAM: Honble Mr. P.R. Chandrasekharan, Member (Technical)

Date of Hearing : 02/01/2015 Date of Decision : 02/01/2015

ORDER NO

1. The appeal is directed against Order-in-Appeal No.116/Mumbai-III/2011 dated 23/05/2011 passed by Commissioner of Customs (Appeals), Mumbai. Vide the impugned order, the learned lower appellate authority has upheld the imposition of penalty on the appellant, M/s.Skyline Air Logistics Ltd. Aggrieved of the same, the appellant is before us.

2. None represented the appellant despite notice. This appeal had come up six times earlier and on none of the occasions the appellant was represented and this is seventh time, the appeal is coming up for consideration. Therefore, I take up the appeal for consideration and disposal with the assistance of the learned Additional Commissioner (AR) appearing for the Revenue.

3. The facts relevant to the case are briefly as follows:

3.1 M/s.CSC Pharmaceuticals filed a shipping bill No.7515336 dated 17/11/2009 through the CHA. M/s.Skyline Air Logistics Ltd., the appellant herein, for clearances of export cargo consisting of 25 vials of Pemetrexed Injection 500 MG (Alimta) declaring the FOB value as Rs.15,08,000/- under claim for DEPB of Rs.75,400/-. During the course of examination, the goods were found to be foreign origin, that is, manufactured in France. Since the goods were of foreign origin and no manufacturing/ processing had been undertaken in India, the exporter was not eligible for the claim of DEPB benefits. Accordingly, the goods were confiscated with an option to redeem the goods on payment of a fine of Rs.1.00 lakh and a penalty of Rs.40,000/- was imposed on Shri Chaitanya M Shah, Director of the exporting firm. A penalty of Rs.10,000/- was imposed on the CHA under Section 117 of the Customs Act, 1962 on the ground that CHA appears to have erred by giving wrong advice and filing shipping bill under DEPB scheme thereby contravening the provisions of Section 50 (2) of the Customs Act, 1962. In their appeal memorandum, it has been claimed that the CHA did not know that the goods under export was of foreign origin and only during the course of examination at the time of export, the markings on the goods were found to be having been manufactured by Lilly France S.A.S. It is also submitted that the shipping bills were filed as per the instructions of the clients believing that the goods were of Indian origin and there was no lapse on the part of the CHA.

4. The learned Additional Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities and submits that the CHA failed to comply with the obligations cast on him under Regulations 113 (d) and 113 (e) of CHALR 2004 and therefore, he is liable to penalty under the provisions of Customs Act and the impugned order is sustainable in law.

5. I have carefully considered the submissions made by the AR appearing for the Revenue and the grounds urged in the appeal memorandum. The charge against the CHA is that they failed to advise the exporter that benefits of DEPB scheme could not be claimed in respect of the goods manufactured abroad and the contravention alleged is of Regulations 13 (d) and 13 (e) of the CHALR 2004. It is also on record that the CHA came to know that the product has been manufactured abroad only when the goods were examined by the Customs. There is no evidence adduced by the Revenue to say that the CHA was aware of the misdeclaration by the exporter. In these circumstances, the question of CHA being responsible for any omission or commission, making the goods liable to confiscation would not arise at all. Consequently, imposition of penalty under Section 114 of the Customs Act, 1962 is not sustainable in law. If the CHA has contravened any of the provisions of the CHALR, then action should have been taken under CHALR and not under the Customs Act. Therefore, I am of the considered view that the impugned order imposing penalty under Section 114 is unsustainable in law. Accordingly, I set aside the same and allow the appeal.

(Dictated in Court)

(P.R. Chandrasekharan) Member (Technical)

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