M/S Concord Maritime And Logistics Pvt Ltd vs Commissioner Of Customs NCH -New Delhi

P. V. Subba Rao, Member ( T )

M/s Concord Maritime and Logistics Pvt Ltd.[ appellant], a Customs Broker, filed this appeal to assail the order-in-appeal dated 14.06.2019 passed by the Commissioner of Customs (Appeals), New Delhi whereby he upheld the order-in-original dated 29.05.2013 passed by the Deputy Commissioner of Customs and rejected the appellant’s appeal.

We have heard Dr. G K Sarkar, learned counsel for the appellant and Shri Nagendra Yadav, learned authorized representative appearing for the department and perused the records.

One, M/s Aman Overseas a proprietary firm, filed shipping bill dated 14.05.2010 through the appellant to export 4,016 pieces of mechanical pump’s parts under claim for drawback. Investigations revealed that the export consignment was highly overvalued and further that there were mis-declarations in the shipping bill regarding the port of discharge and country of destination in order to avoid examination of the export goods. Further, it was found that the shipping bill was filed in the name of M/s Megh International against the airway bill issued in the name of M/s Aman Overseas to facilitate/ abet export of poor quality goods at highly overpriced rates in order to claim undue amount of drawback.

After investigations, a show cause notice dated 12.11.2010 was issued to the exporter, to Shri Virender Singh Rawat, G-card holder of the appellant and others. The Deputy Commissioner adjudicated the matter and inter alia, imposed a penalty of Rs. 75,000/- on Shri Virender Singh Rawat, G-card holder and also imposed penalty of Rs. 4,25,000/- on the appellant.

Aggrieved, the appellant filed an appeal before the Commissioner (Appeals), who dismissed it on the ground of delay.

On further appeal, this Tribunal remanded the matter to the Commissioner (Appeals) to decide on merits of the case. In the second round of litigation, Commissioner (Appeals) passed the impugned order on merits and upheld the penalty of Rs. 4,25,000/-imposed upon the appellant under section 114 of the Customs Act, 1962 [Act] and Rs. 25,000/- under section 117 of the Act.

Learned counsel for the appellant submitted that the case of the department, as is evident from the show cause notice itself, is that Shri Virender Singh Rawat, holder of G-card of the appellant Customs Broker had, without knowledge of the appellant, filed shipping bills mis-declaring the port of discharge and the country of destination to avoid examination of export goods and manipulated five shipping bills. It is mentioned in the show cause notice itself that the shipping bill was filed without the knowledge of the appellant Customs Broker for extraneous benefit offered to him by the exporter. He emphasized that the appellant has no record of the shipping bills being filed in its official records. He draws attention of the Bench to paragraph 27 (viii) of the SCN reads which as follows; “(viii) Shri Virender Singh Rawat “G” card holder of CHA M/s Concord Maritime & Logistics Pvt Ltd.)

(Licence No. 11/889), who filed the said shipping bills without the knowledge of his CHA firm and misdeclared the port of discharge and country of destination in order to avoid examination of export goods and manipulated filing of shipping bill in the name of M/s Megha International against the AWB issued in the name of M/s Aman Overseas, appears to have facilitated/ abetted the said non-existent/non-traceable exporters in the export of poor quality sub-standard and highly overvalued seized goods under claim of under drawback amount in respect of M/s Aman Overseas and by exporting less quantity than the declared quantity in respect of M/s Megha International, which appeared to be liable for confiscation under Section 113(d) and 113(i) of the Customs Act, 1962.”

(emphasis supplied)

Learned counsel, therefore, submits that even according to the department, the appellant had no role to play in filing the shipping bills and it is Shri Virender Singh Rawat who misused the credentials of the appellant Customs Broker to file the shipping bills for monetary gain. He, therefore, submits that the appellant was not liable to any penalty under section 114 or under section 117 of the Act and the penalties may kindly be set aside.

Learned authorized representative appearing for the department supports the impugned order and asserts that the appellant as the Customs Broker was vicariously responsible for the actions of his employees and was liable to the penalty which was imposed.

We have considered the submissions on both sides and perused the records.

It is an unusual case where the investigation by the department itself proved that the shipping bills were incorrectly filed by Shri Virender Singh Rawat misusing the credentials of the appellant Customs Broker without its knowledge for monetary gain for himself. Therefore, the undisputed fact is that the appellant had neither any role in filing the incorrect/ manipulated shipping bills nor did the appellant have any knowledge of the shipping bill being filed with its name as the Customs Broker.

Section 114 of the Customs Act reads as follows;

“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;

(ii)in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded or five thousand rupees whichever is the greater;

(iii) in the case of any other goods, to a penalty not exceeding the value of the goods, as declared by the exporter or the value as determined under this Act, whichever is the greater.”

A bare perusal of the section show that penalty can be imposed only on the person who in relation to the export goods which were rendered liable to confiscation under section 113, does or omits or abets the doing or omission of an act, shall be liable for penalty. In this case the facts has narrated in the show cause notice itself shows that the appellant neither filed the shipping bill nor committed any act or abetted the commission or omission of any act which rendered the goods liable for confiscation under section 113. In view of above, no penalty whatsoever is imposable under section 114 on the appellant.

As far as penalty under section 117 is concerned, it can be imposed on any person for contravention of any provision of the Act or abetting any such contravention or failing to comply with any provision of the Act with which it was his duty to comply for which no express penalty is provided. In this case, records do not show that the appellant had contravened any provision of the Act or Rules or abetted such contravention or had failed in any of its duties which it was bound to comply. In view of above, we find the penalty under section 117 also cannot be sustained.

In view of above, the appeal is allowed and the impugned order is set aside in so far as it relates to imposition of penalty on the appellant.