CHA Has No Reason To Doubt Any Malpractice Or Attempt Of Export Of Prohibited Goods, No Case Of Abetment Made Out: CESTAT

M/s All Craft Exports, filed a shipping bill intending to export 320 Nos. of wooden floor lamps and 70 Nos. of Jaipur benches valued at USD 9380 (factory stuffed & sealed) to M/s Shining Ocean International (Hong Kong) Group Company Limited, Hong Kong. The shipping bill, along with the checklist, invoice, packing list, and other documents, were filed through the appellant, CHA.

The CHA presented the export documents, i.e., Check List of Shipping Bill, Invoice, Packing List, CENVAT declaration, and Carting Sheet. During examination, it was observed that there were 463 packages instead of 390 packages as declared by the party in the Shipping Bill, Invoice & Packing List. It was observed that out of 70 numbers of Jaipur Benches, 50 benches were heavier. On examination of the heavier benches, hollow space under the benches was covered by nailing them with ply-board, and wooden logs having a fragrance like sandalwood were found concealed. The rest of the 20 benches were light in weight and nothing was found concealed.

As per schedule 2 of ITC (HS), the export of sandalwood in log form and red sandalwood in any form is prohibited for export and is liable for confiscation under section 113 of the Customs Act, 1962 read with the Foreign Trade (Development and Regulation) Act, 1992 and Foreign Trade (Development and Regulation) Rules, 1993 and the provision of the Indian Forest Act, 1927.

The weighment of the detained goods was conducted on an electronic weighing machine, which was installed in the export warehouse in the presence of Sanjay Kumar - "G" Card holder of M/s Ramvir CHA.

The Adjudicating Authority observed that the appellant had been negligent in performing their duty as a CHA, as they accepted the work order through the freight forwarder, Md. Hasan Khan, and they received all the documents like KYC etc. through him only. The appellant CHA had no contact with the exporter. As the appellant was accepting the work for the first time for the said client, he should have been vigilant and taken reasonable care to receive the documents directly from the exporter.

The Adjudicating Authority held that the appellant was liable for penalty under Section 114 (i) and imposed a penalty of Rs. 1 lakh. The penalty under Section 114AA was dropped, observing that it was not warranted.

The question was whether a Rs.1 lakh penalty was properly imposed on the appellant—CHA under Section 114(i) of the Customs Act.

The CESTAT noted that the appellant had received a full set of documents through the freight forwarder and there was no reason for him to doubt the genuineness of the exporter. Further, as the goods were factory stuffed and sealed, the appellant-CHA has no reason to doubt any malpractice on the part of the exporter.

The Tribunal held that no case of abetment in the attempted export of prohibited goods against the appellant was made out.

Case Title: Ramvir Singh Versus Commissioner of Customs

Citation: Customs Appeal No. 52776 of 2019-SM

Dated: 02.05.2022

Counsel For Appellant: Advocate Ashutosh

Counsel For Respondent: Advocate Ravi Kapoor

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