Case Law Details
Caravel Logistics Pvt Ltd Vs Commissioner of Customs (CESTAT Hyderabad)
Introduction: The case of Caravel Logistics Pvt Ltd vs. Commissioner of Customs, adjudicated by CESTAT Hyderabad, revolves around an issue of discrepancies in the description of imported goods in invoices compared to the Bill of Lading. The CESTAT reviewed and lowered the penalty imposed on the appellant for negligence in the verification of import declarations. Importantly, no ulterior motive or malicious intent was found to be present in the case.
Detailed Analysis: Caravel Logistics Pvt Ltd, the appellant, is a logistics service provider specializing in the import and export of goods. The matter pertains to a consignment imported by M/s Great Overseas, for which the appellant filed an Import General Manifest (IGM) on January 31, 2013. In the IGM, the goods were declared as assorted chappals, consistent with the description in the Bill of Lading.
However, in April 2013, the appellant received a request from Mr. M.A. Mujahid, the proprietor of M/s Great Overseas, to amend the IGM’s description and quantity. This amendment process took place while the consignment remained uncleared at the Inland Container Depot (ICD). In July 2023, customs officials conducted an inspection of the consignment and discovered that it contained mobile spare parts and mobile accessories. Subsequently, the consignment, valued at Rs 4,58,25,512, was confiscated, and the option to redeem it upon payment of a redemption fine of Rs 45,00,000 was offered to the importer. Additionally, a penalty was levied on the appellant under sections 112(b) and 114AA of the Customs Act 1962.
The appellant’s counsel argued that there was no evidence to suggest that the appellant was aware of the goods within the container when filing the IGM or the subsequent amendment. The appellant relied solely on the details provided in the Bill of Lading at the time of IGM submission. The counsel maintained that the investigation did not uncover any specific involvement of the appellant in any wrongful act. Therefore, the counsel sought the reduction of the penalties imposed under sections 112(b) and 114AA.
The Assistant Commissioner (AR) contended that the appellant had access to the overseas exporter’s invoice when requesting the IGM amendment. This invoice indicated that, in addition to assorted chappals, other items were present in the container. However, the appellant failed to inform the Customs officials of this fact. The discovery of mobile accessories within the container occurred only after a thorough examination.
Upon review, CESTAT found that the appellant filed the IGM in good faith based on available documents, listing the goods as ‘assorted chappals.’ The subsequent amendment was carried out at the instruction of Mr. M.A. Mujahid, which was confirmed by his statements. Consequently, there was no ulterior motive behind these actions. However, CESTAT concurred with the AR’s argument that the appellant’s conduct was negligent.
To address this, the penalty imposed under section 112(b) was set aside. The penalty under section 114AA was reduced to Rs 50,000.
Conclusion: The CESTAT Hyderabad’s decision highlights the importance of due diligence and attention to detail in import declarations. While the appellant’s actions were found to be based on negligence rather than any ulterior motive, they were still held accountable for the discrepancies. This case emphasizes the need for importers and logistics service providers to exercise caution and ensure that declarations are precise and in accordance with the documentation available.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
The appellant is a logistic service provider for import and export of goods. In respect of one consignment imported by M/s Great Overseas, they have filed IGM on 31/1/2013. In the IGM they have declared the description of goods as assorted chappals. This declaration was supported by the description given in the Bill of Lading. Subsequently, as per the request of the proprietor of M/s Great Overseas, Mr. M.A. Mujahid, they have requested for amendment in the IGM description and quantity in April 2013. The consignment remained uncleared at the ICD. In the month of July 2023, this consignment was opened for inspection and it was found that the imported goods contained mobile spare parts/mobile accessories. After due process, the consignment valued at Rs 4,58,25,512/- was confiscated and option to redeem the same on payment of redemption fine of Rs 45,00,000/- was given to the importer. Penalty was imposed on the appellant under section 112(b) and under section 114AA of the Customs Act 1962.
2. The learned counsel, appearing on behalf of the appellant, submits that the Department has not made out any case against the appellant on the ground that he was aware of the goods inside the container when the IGM was filed or when the amendment to IGM was filed. The appellant has simply gone by the details given in the Bill of Lading at the time of filing the IGM. He submits that investigation has not revealed any specific role played by the appellant. Accordingly, he submits that the penalty of Rs. 2,00,000/- each imposed under section 112(b) and under section 114AA may be set
3. The learned AR submits that the appellant had an access to the invoice raised by the overseas exporter when the amendment to IGM was sought by them. This invoice showed that apart from assorted chappals, some other items were also present in the container. This fact was not brought to the specific knowledge of the Customs officials. Only on proper verification of the container, the presence of mobile accessories inside the container was found. Therefore, the learned AR submits that the role of the appellant is also not above board. He prays that the appeal may be dismissed.
4. I find that the appellant has filed IGM in the normal course based on the documents available with him, wherein the description has been mentioned as ‘assorted chappals’. Subsequently they have got the amendment done only on the basis of instructions received from the proprietor of M/s Great Overseas, Mr M.A. Mujahid which is also confirmed by him in his recorded statements. Therefore, there cannot be ulterior motive on their part to have filed the IGM and the amendment request letter. However, I find that this is a case of negligence on their part to specifically not to pose any query the importer as to why the description in the invoices is different from the description given earlier in the Bill of Lading, While agreeing with the appellant that there is no ulterior motive in the entire passage, I agree with the learned A.R. that act of appellant has been negligent. Accordingly, I modify the impugned order as under.
5. I set aside the penalty imposed under section 112(b). The penalty imposed under section 114AA is reduced to Rs 50,000/-. The appeal is disposed of accordingly.
(Order pronounced and dictated in open court)
