SAURASHTRA CEMENT LTD. Vs. COMMISSIONER OF CUSTOMS, JAMNAGAR

JUDGEMENT

(1.) APPELLANT -M/s. Saurashtra Cement Ltd. (SCL) is engaged in the manufacture of cement and cement clinker and filed a shipping bill on 21 -9 -2010 for export of 600 MT of cement under DEPB for export to IRRA. The shipping bill was assessed on 22 -9 -2010 and the loading was started under the supervisor of SCL and the other persons concerned. By the time 70 MT of cement had been loaded, the officers of Customs came and stopped the loading on the ground that let export order had not been given and therefore loading was improper. On this ground proceedings were proposed to be initiated. But the appellant -company and others concerned waived issue of show cause notice and thereafter impugned order has been passed imposing penalty of Rs. 35,000/ - on SCL, Rs. 20,000/ - on Shri K.J.V. Sharma, General Manager of SCL, Rs. 15,000/ - on Shri B.H. Wagh, supervisor of SCL, penalty of Rs. 20,000/ - on Shri V.R. Shial, shipping agent of shipping line and Rs. 10,000/ - on the tindal of the vessel. Further the 70 MT of cement valued at Rs. 1,64,500/ - was confiscated and redemption fine of Rs. 50,000/ - has been imposed and the vessel has been confiscated and redemption fine of Rs. 1,25,000/ - has been imposed.

(2.) EVEN though the ld. counsel for the appellants made detailed submissions as to why the goods cannot be considered as smuggled; as to why it cannot be said that the vessel is not liable to confiscation and as to why no penalty could have been imposed on the appellant -company, yet I feel that in this case after considering the submissions made by the ld. counsel as well as ld. A.R., it is not necessary to discuss all these detailed submissions in view of the fact that according to the definition of smuggling as per the provisions of Customs Act, once the goods are loaded without let export order in the ship or vessel, goods are considered as smuggled and are liable to confiscation. Once goods are held liable to confiscation, penalties on the persons concerned also become imposable and further the goods themselves also become liable to confiscation. As regards the vessel the provisions of Section 115(2) provide that vessel becomes liable to confiscation only if the vessel is used for smuggling of the goods with the knowledge of the owner and if the owner is able to show that he had no knowledge or intention to smuggle, a penalty on the owner and confiscation of the vessel is not called for. In this case no doubt around 10% of the goods was loaded in the vessel but even the Commissioner himself has accepted that what happened appears to be bona fide mistake and therefore he is taking a lenient view. Once it is accepted that what has happened is a bona fide mistake, it cannot be said that the vessel was used in smuggling with the knowledge of the owner. Under these circumstances, the vessel cannot be said to be liable to confiscation and therefore the confiscation of the vessel is not sustainable and accordingly set aside.

(3.) AS regards the employees of the appellant it cannot be said that all of them were concerned with export of the goods excepting the supervisor who was in the port and who was an employee of the company representing the company. As an employee he was performing the duty and probably was extremely eager to ensure that the goods are loaded as early as possible and no mala fide intention has been attributed by the Commissioner. Therefore once the penalty is imposed on the company, it may not be appropriate to impose penalty on the employee also. Therefore the supervisor of the company Shri B.H. Wagh and the General Manager are not liable to penalty and accordingly the penalty imposed on them is set aside. As regards the company, I feel that since I have taken a view that no penalty is imposable on the supervisor and it was on behalf of the company that the goods were loaded on the vessel by following improper procedure and having rendered the goods liable to confiscation penalty is leviable.