Case Law Details
AKR Logistics India Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
Corrigendum to an Order in Original can be issued only for correcting typographical errors. A corrigendum cannot be used to cover up the main part or main issue that has to be adjudicated. The said Corrigendum cannot be accepted in the eye of law.
For these reasons, I am of the view that the penalty imposed under sec. 114(i) of the Customs Act, 1962 on the appellants herein cannot sustain and requires to be set aside which I hereby do.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The issue in both these appeals being connected, they are heard together and disposed by this common order.
2. Brief facts are that on receiving specific intelligence, a special team of Chennai – III Commissionerate conducted search at the Kasimedu Fishing Yard garbage area and recovered two white colour thermocol boxes with markings showing airway bill numbers. These boxes were examined and found to contain 490 numbers of Star Tortoises. Investigation revealed that the said consignment was filed vide Shipping Bill dated 5.11.2018 by declaring the goods as ‘Live Mud Crabs’. The shipping bill was filed by Customs Broker M/s. AKR Logistics India Pvt. Ltd. who is the appellant herein. Shri P. Thirumoorthy is the proprietor of the said firm. The exporters name was shown as M/s. Daily Fresh Exports and Imports, Nagapattinam and the goods were destined for Malaysia.
2. Consequently, searches were conducted and statements were recorded. Show Cause Notice was issued to several persons including the appellants herein. After due process of law, the original authority vide order dated 17.11.2020 dropped the proceedings against M/s. Daily Fresh Exports and Imports and its proprietor Shri S. Yoganathan. A penalty of Rs.one lakh each was imposed on the appellants under sec. 114(i) of the Customs Act, 1962. They filed appeals before Commissioner (Appeals) who vide order impugned herein upheld the same. Hence these appeals.
3. On behalf of the appellants, the learned counsel Ms. A. Aruna appeared and argued for the appellants. She submitted that the appellant as a Customs Broker had only filed the shipping bills. They did not present the shipping bills for registration as they did not receive the KYC and authorization from the exporter. Thus, no further steps were done for export of the consignment. The goods were not at all moved and presented for examination by the appellant. They have no knowledge about the smuggling of Star Tortoises. Hence no abetment can be attributed to the appellants.
4. She stressed that the Show Cause Notice has not made any proposal to confiscate the subject goods. The original authority has passed a Corrigendum after passing the Order in Original and has thus later ordered for confiscation of the goods by issuing a corrigendum. He has exceeded the scope of the Show Cause Notice. As the goods have not been ordered for confiscation under sec. 125 of the Customs Act, 1962, penalties imposed cannot sustain. She submitted that the reliance placed by the Commissioner (Appeals) on the case law of N.B. Sanjana, Assistant Collector of Central Excise, Bombay and Others Vs. The Elphinstone Spinning and Weaving Mills Co. Ltd. reported in 1978 (2) ELT J399(SC) is clearly misplaced as the ratio of the said case is entirely different from the present case.
5. When the goods are not confiscated, as there is no such proposal in the Show Cause Notice, the question of imposing penalty under sec. 114(i) does not arise as the provision of section 114 will be invocable only when section 113 of the Customs Act, 1962 has been invoked.
6. The Star Tortoises were recovered and seized outside the Customs area and therefore confiscation under sec. 113 of the Customs Act, 1962 and subsequent penalties cannot sustain.
7. The subject shipping bills pertains to Chennai VII Commissionerate and the searches were done by Chennai III Commissionerate. The said Commissionerate has no jurisdiction over Chennai VII Commissionerate. Hence the Show Cause Notice issued based on the investigation done by Chennai III Commissionerate is without jurisdiction. She prayed that the appeals may be allowed.
8. The learned AR Shri R. Rajaraman appeared for the respondent. With regard to the allegation that the Show Cause Notice does not contain the proposal for confiscation of the goods, he submitted that it was stated in para 20 that the goods are liable for confiscation in terms of sec. 113 of the Customs Act, 1962. The original authority had issued a Corrigendum dated 6.1.2021 expressly ordering for confiscation of 490 Star Tortoises. The error, if any, has been corrected by issuing a Corrigendum to the Order in Original.
9. With regard to the allegation that Chennai III Commissionerate has no jurisdiction to conduct investigation, the learned AR submitted that as the goods were seized from Kasimedu area, searches were conducted by Chennai III Commissionerate which is legal and proper. Further, it is submitted by him that the shipping bill filed was fake and no KYC documents and authorisation were furnished by the Customs Broker. The penalties imposed are therefore legal and proper.
10. Heard both sides.
11. It is seen from the facts that the appellant had only filed the shipping bill and had not got registered or filed any KYC documents along with it to proceed with the export of the goods. It is submitted by the learned counsel that after filing the shipping bill, as they had not got documents from the exporter, they did not pursue the matter so as to get the shipping bill registered. On perusal of the records, I do not find any evidence established against the appellant to show that they have abetted in the attempt to export the prohibited goods namely Star Tortoises. In para 51 of the Order in Original, the original authority has stated that Shri P. Thirumoorthy, Manager of M/s. AKR Logistics India Pvt. Ltd. has failed to exercise due diligence and has not been able to furnish KYC documents. It is also stated that he has lend his Customs Broker card to one Shri Gokula Kannan who was not an employee of the company to handle the export. All these allegations if any, would fall under the Customs Broker Licensing Regulations. No evidence has been adduced to show that the appellant has connived with the exporter in the attempt to export the goods.
12. More importantly, on perusal of the Show Cause Notice, it is vaguely stated in para 20 that the goods are liable for confiscation. However, from para 35 onwards, there is no proposal to confiscate the goods. This is a serious error in the Show Cause Notice as without proposing to confiscate the goods, the penalty under sec. 114(i) of the Customs Act, 1962 is not sustainable. The original authority has tried to correct the error by issuing a Corrigendum to the Order in Original. In fact, the Order in Original No. 1150/2020 is passed on 17.11.2020. Thereafter, a Corrigendum has been issued on 6.1.2021 which reads as under:-
“CORRIGENDUM TO ORDER IN ORIGINAL NO. 1150/2020
DATED 17.11.2020
The para 1 of order at page number 33 in the Order in Original No. 1150/2020 dated 17.11.2020 issued from F.No. S. Misc.15/2020-Exp. Ass. (Air) by the undersigned may be read as under:-
“I order confiscation of 490 numbers of Star Tortoises under section 113(d) of the Customs Act, 1962. Since the export of impugned goods is prohibited per se, the question of redeeming these is ruled out”.
2. The above O-IN-O stands corrected to that extent.”
13. A Corrigendum to an Order in Original can be issued only for correcting typographical errors. A corrigendum cannot be used to cover up the main part or main issue that has to be adjudicated. The said Corrigendum cannot be accepted in the eye of law.
14. For these reasons, I am of the view that the penalty imposed under sec. 114(i) of the Customs Act, 1962 on the appellants herein cannot sustain and requires to be set aside which I hereby do. Both the appeals are allowed with consequential reliefs if any.
(Pronounced in court on 19.5.2022)
