Pullela Nageswara Rao DECISION
P.A. Augustian, Member (J)
1. M/s. DHL Logistics Pvt Ltd, the Appellant is challenging the proceedings initiated against them under the provisions of Customs House Agent Licensing Regulations, 1984. The appellant is a Clearing agent (CHA) for the importer M/s. Procter & Gamble (P & G), who had imported 'Wood Pulp Cellulose Foley Fluffs' (wood pulp for short) classifiable under Customs Tariff Heading/RITC 47020000 through Nhava Sheva port and it was re-exported to M/s. Procter & Gamble, Guangzhou, China under shipping bill No. 7818372 dated 02.11.2009 without clearing the goods for home consumption though the duty was paid. However, at the time of re-export, it was classified under RITC 33029019 (meant for Odoriferous substances/mixture of aromatic chemicals and essential oils as perfume base) with a lower declared value and FOB. In the shipping Bill the description of the goods was Wood Pulp Cellulose Foley Fluffs, however the RITC was mentioned as 33029019 without claiming any export incentives. Thereafter, the importer came to know about the omission on their part regarding classification of the goods, while filing the shipping bill and requested for amendment of the Customs Tariff Heading to 47020000. While considering the request for amendment, it is noticed that goods under chapter sub- heading 4702 0000 of ITC-HSN are prohibited for export as per the provisions of Foreign Trade Policy. Thus, it is alleged that the Appellant had fraudulently assisted the exporter to carry out the fraudulent export of prohibited goods. The proceedings were initiated and the Adjudication Order was passed imposing penalty on exporter and the Appellant. The Appellant filed a Writ Petition No. 6656/2012 before the Hon'ble Bombay High Court and the Hon'ble Bombay High Court vide order dated 18.07.2012 quashed the proceedings vide impugned Order No. 81/2012-13 dated 06.07.2012 and directed to initiate proceedings in accordance with law. Accordingly, proceedings were initiated and Adjudication Authority issued a Show Cause Notice under Section 124 of the Customs Act, 1962. When the proceedings under Section 124 of the Customs Act, 1964 were in progress, proceedings under Regulation 13(d), 13(e) & 13(f) of the regulation 19(8) under the provisions of CHALR, 2004 were initiated against the appellant and the Adjudication Authority as per the impugned order issued order of forfeiture of the security furnished by appellant in full, however, the proposal to revoke the CHA License was dropped. Aggrieved by the said order, the present appeal is filed.
2. When the appeal came up for hearing, Learned Counsel for the Appellant submits that forfeiture of the security furnished by the Appellant is harsh and unsustainable. Though there is an omission on part of Appellant to mention correct Customs Tariff Heading/RITC, while exporting the goods, there is no deliberate attempt to evade duty or claim any undue privileges. Learned Counsel for the Appellant submits that the proceedings initiated against the appellant are also unsustainable, since there is no offence report issued before issuing SCN as per Regulation 22(1) of the CHALR, 2004.
3. The Learned Counsel submits that when the importer made a request for re-export of the goods vide letter dated 28.10.2009, it was allowed by the proper officer and shipping bill was filed, accordingly. Therefore, once the department permitted re-export of goods after verifying the records, there can be no allegation that the Appellant had made misdeclaration, intentionally. There is no evidence on record to substantiate the alleged violation of Regulation 13(d), 13(e) & 13(f) of the CHALR, 2004.
4. On merit, Learned Counsel for the Appellant further submits that the prohibition on export of wood pulp under the Foreign Trade Policy would apply to the goods manufactured or produced in India and sought to be exported. The objective of imposition on prohibition on export of wood pulp is to ensure that the resource of India or not exported outside of India. It is not a disputed fact that wood pulp exported by M/s. Procter & Gamble was exported in the same container in which the wood pulp was imported and it was exported from the Customs Area in the same container in which they were imported. A wrong mentioning of the RITC in the export document is only an inadvertent error on the part of the employee of the Appellant and same cannot be considered as a willful negligence on the part of Appellant to proceed against the appellant under CHALR, 2004. Learned Counsel further submits that the scrutiny of the shipping bill is not confined only to the RITC given in the shipping bill. The scrutiny of the shipping bill is always for all the details given in the shipping bill and in particular the description of the goods. There is no reason to believe that while filing the free shipping bill, the scrutiny of the shipping bill was avoided. Mere wrong mentioning of RITC on the shipping bill cannot mislead the officer to allow the export of prohibited goods.
5. The Learned Authorised Representative for the Revenue reiterated the findings in the impugned order and further submits there is a willful negligence on the part of the Appellant to mention correct ITC-HSN code to avoid detection of the export of prohibited goods. Hence the order is sustainable.
6. Heard Both Sides and perused the records.
7. Regarding the procedural violation, as per Regulation 22(1) of CHALR, 2004, the show cause notice under the CHALR has to be issued within 90 (ninety) days of the receipt of the offence report. Thus, it is mandatory for the department to issue an offence report as to where the offence is committed and period of limitation commences from the said date of offence report. In the present case, admittedly there is no offence report and the finding of Adjudication Authority that the Show Cause Notice dated 14.08.2012 issued by JNCH, Nhava Sheva can be considered as offence report is unsustainable. Once there is a specific provision in CHALR, 2004 to issue notice within 90(ninety) days from the date of issue of offence report, offence report is mandatory and in the absence of the same no presumption can be drawn that the Show Cause Notice would suffice.
8. On merits also, as submitted by the Learned Counsel for the Appellant, there is no reason to conclude that there is a deliberate omission on the part of the Appellant to mislead the Department and to proceed with export of prohibited goods, when the description of the goods in the shipping bill is same as that was mentioned in the import bill of entry. The goods imported by the M/s. Procter & Gamble (P&G) were in the Customs premises and they was exported from the very same Customs Premises with due permission from the concerned officer. Thus, in the absence of any admissible evidence regarding violation of any provision of CHALR, 2004 and considering the procedural lapse in issuing offence report, the impugned order is unsustainable.
9. Considering the above facts and circumstances, the Appeal is allowed.
(Order Pronounced in Open court on 10.07.2024)
© Manupatra Information Solutions Pvt. Ltd.