The Kolkata bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that the show cause notice (SCN) issued by the Commissioner failed to show collusion for the export and reduced the penalty imposed under Section 114(1) of the Customs Act, 1962, to Rs. 50,000/-.
The National Agency (the Appellants) was caught importing Red Sanders Wood and a was issued against them by the Commissioner of Customs (Port), Kolkata (the Respondent) demanding Rs. 50,00,000/- as penalty under Section 114(1) of the Customs Act.
The National Agency tried to import Red Sanders Wood in two whole containers, weighing over 5050 kg. At the time of examination, the Customs seals were found to be intact and the director of the exporting firm, Abhishek Jhunjhunwala informed the authorities that they had never personally met the overseas buyer and were in contact through a middleman Sanjay Singh.
The services of Steamer Agent, Freight Forwarder Customs House Agent (CHA), transporter, etc. were all organized and engaged by Sanjay Singh. The director admits that while the goods moved out, they received an e-mail from Sanjay Singh to hold back the shipment and cargo and to act according to his advice.
The appellant claimed that they had never met Sanjay Singh, nor knew of his address/antecedents. It was stated that though they had filed the shipping bill for 1050 boxes only 700 boxes could be loaded as per the advice of the exporter and the invoice and packing list were changed and a fresh shipping bill was filed. The name, address, phone number, and driving license number of the truck driver were not known to them and were not present at the time of stuffing the container.
The counsel who appeared on behalf of the National Agency pleaded that they had obtained the requisite documents for export from an employee of Ashoke Enamel and Glass Works Pvt. Ltd. and they advised the exporter to comply with the provision of the Customs Act, 1962 as per the regulation 13 of Customs House Agent Licensing Regulations, 2004. The handling of the blank signed and sealed requisition was done through an employee of the CHA.
It was argued that the port authorities post verification of all statutory documents were satisfied. However, they did not take any steps to verify the genuineness of the exporting firm by visiting the office premises or even talking to any responsible person.
The two-member bench consisting of R. Muralidhar (Judicial Member) and Rajeev Tandon (Technical Member) stated that the National Agency had rendered itself liable to penal consequences and as the show cause notice failed to bring for any express and active collusion in the attempted exports of Red Sander Wood logs on the part of the National Agency, reducing the penalty to Rs. 50,000 would meet ends justice and the appeal was disposed of.
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