SWAROOP SHIPPING SERVICES Vs. CC

JUDGEMENT

(1.) THESE appeals filed by M/s. Swaroop Shipping Services (Customs House Agent) and Shri S. Chinnikrishnan (partner of another firm viz. Shree Ganapathy Shipping Services) are respectively against penalties of Rs. 1 lakh and Rs. 50,000/ - imposed on them under Section 114(i) of the Customs Act. These penalties are in connection with the absolute confiscation of 30.212 MTs of red sanders logs ordered under Section 113(d) of the Act. Shipping Bill No. 1915943 dt. 9.10.2004 had been filed in the name of M/s. Sri Lakshmi Mining Industries for export of goods declared as "Natural Granite Chips", to Malaysia. It was signed by Shri R. Elangovan, Executive of the CHA. It was Shri S. Chinnikrishnan who got the Shipping Bills signed by the CHA, and attended to the Customs clearance of the export. The declared goods were stuffed in two containers at Numbal CFS and the containers were sealed by the Customs authorities. Acting upon intelligence regarding smuggling of red sanders out of India in the guise of export of 'natural granite chips', the Customs authorities opened the two containers after these were transported from the CFS to CCTL (Chennai port), and conducted detailed examination of the goods, whereupon it was found that both the containers contained red sanders logs weighing 30.212 MTs and one of the containers also contained 58 kgs. of groundnut pods. Subsequently, enquiries were made with the exporter, CHA, Shri S. Chinnikrishnan and others. From the results of these investigations, it appeared to the department that one Shri Indirakumar had masterminded the clandestine activity of replacing the declared goods with red sanders logs in the containers in transit from the CFS to CCTL and that the appellants had abetted the offence. The department, however, failed to trace Shri Indirakumar. Ultimately, a show -cause notice was issued for confiscating the goods under Section 113 of the Customs Act and for imposing penalties on the CHA, Shri S. Chinnikrishnan and Shri Indirakumar under Section 114 of the Act. No copy of this notice could be served on Shri Indirakumar otherwise than by affixture on the Customs House notice board. The appellants contested the notice. In adjudication of the dispute, the Commissioner of Customs ordered absolute confiscation of the red sanders under Section 113(d) of the Act and imposed penalties on the appellants as well as Shri Indirakumar under Section 114 of the Act.

(2.) AFTER examining the records and hearing both sides, I note that the same offence was charged against both the appellants, i.e., abetment of Shri Indirakumar's attempt to smuggle the prohibited commodity (red sanders) out of the country in the guise of export of 'natural granite chips'. The declared item (granite chips) was stuffed in the two containers at the CFS and the containers were sealed by the proper officer of Customs. The declarations in the Shipping Bill were accepted and "let -export" order given, pursuant to which the consignment was taken to CCTL for shipment. A pertinent fact noted by the Commissioner is that the swapping of goods (red sanders for granite chips) in the containers had taken place in transit from the CFS to CCTL. The question to be considered in this case is whether the CHA and Shri Chinnikrishnan had anything to do with this clandestine activity.

(3.) IN the result, the impugned order is set aside as against these appellants and the appeals are allowed.