1. These appeals have been filed, by a firm of Custom House Agent (herein after referred to as CHA) and Dock Clerk of the CHA, against penalties of Rs. 50,000/- respectively imposed on them under the provisions of Section 112(a) of the Customs Act, 1962.
a) The officers of Marine & Preventive Wing of Commissionerate, (Preventive) intercepted, on information, tempos outside Green Gate of Bombay Docks. The driver of tempo No. MDD-6522 produced relevant Baggage Declaration forms (herein after referred to as BDF) and other connected documents. The tempo Nos. 4113 and MRQ-2609 were found to be carrying packages cleared, from Unaccompanied Baggage Centre, Mumbai (herein after referred to as UBC), Under BDF No. 755 dt. 20/05/1999. The packages were having markings of BDF number, date and passport number and were found to contain electronic goods, like Video Cassette, Walkman, Camera, TV set etc, valued at Rs. 20,70,645/- at Local Market Value (herein after referred to as LMV).
They were seized under the provisions of Central Excise Act, 1962.
Enquiries made revealed that the tempos were hired by one Imtiyaz and Moinuddin to take the goods from UBC centre to Crawford and Manish markets.
b) Enquiries made with the Managing Director of CHA and the Dock Clerk revealed that the Dock Clerk solicits business at UBC on behalf of the CHA and gets the baggage cleared. BDF No. 755/20.05.1999 was prepared by the said Dock Clerk for passenger Mohammed. Ayub, brought to him by one Moinuddin. Passport and declarations of contents as made by Md. Ayub were obtained and filed with Customs. The goods were examined by the Customs officers and were adjudicated. The proper officer at UBC found and determined a contravention of Section 111(d), requiring confiscation of the goods, he so ordered to be cleared on payment of full duty fine and penalty as imposed on Mohammed Ayub. On such payments having been made and after obtaining the Gate Pass, the documents were handed over to the passenger by the Dock clerk. The goods were admittedly being transferred on instruction of one Moinuddin and not the CHA or the Dock Clerk. In a subsequent statement dated 31.05.1999, it appears, the Dock Clerk admits to have known about the intention to evade duty and freight by the passenger by misdeclaring the goods, on the BDF form and the shipping documents.
c) The passenger Md. Ayub was sent summon at the Passport Address which was returned with the remarks of incorrect address. No other effort appears to have been made to locate him, even though the Steamer Company admits to have given delivery order to him. No effort appears on record to trace out Imtiyaz and/or Moinuddin.
d) The Commissioner (Preventive) adjudicated the matter vide his order dated 21/05/2001. After finding the Md. Ayub has not come forth to claim the goods and at the address given on BDF, Bill of Lading and Passport were fictitious he held that the passenger Md.
Ayub was not a bonafide passenger entitled to Transfer of Residence facility under Baggage Rules and goods in excess of these declared as Baggage form were consumer goods ordered the confiscation of- (i) Goods already declared confiscated and redeemed and cleared on payment of duty under the provisions of Section 119.
(ii) Goods found to be in excess under Section 111(d), 111(1), 111(m).
(iii) Penalties of Rs. 50,000/- on CHA and Rs. 25,000/- on Dock Clerk was imposed.
e) The CHA and the Dock Clerk filed an appeal and the Tribunal vide its order dated 14.05.20052 remitted the matter back since sufficient opportunity of hearing was not given to the appellants.
f) On appeal by the CHA and the Dock Clerk the matter was remanded to the Commissioner for denovo adjudication. In the remand proceedings now impugned before me the Commissioner found:- (i) Cross examination of 7 witnesses as denied by the appellants would not serve any purpose and would delay the proceedings therefore he rejected the request relying upon Kanungo & Company 1983 (13) ELT 1486 SC; Surjeet Singh Chabbra 1997 (89) ELT 646 SC and other decision of the Tribunal.
(ii) As regards the plea that the Director of CHA was unaware of the alleged fraud and statement dated 31.5.99 of Dock clerk was under duress the Commissioner in para 34 of the impugned order does not accept the same as representative of the CHA has knowledge of the baggage contents in such cases and goods are cleared and loaded in his presence.
(iii) On the BDF form signature of Shri Mohammed Ayub was obtained and the value declared therein was arbitrary and without any basis as for the declaration of the passenger. The BDF was signed on behalf of CHA by him. He was not authorized to sign the same. This was in direct conflict with the statement of the Director of CHA, who had stated that he was authorized to sign.
(iv) In view of the above it was concluded that the CHA, the Dock Clerk and the passenger were missing the T.R. benefit were hand in glove and that was a mutual understanding between them, the statements of the Dock Clerk in aiding Shri Moideen and Shri Mohammed Ayub would prove his involvement in the commission of the offence. Since the Dock Clerk was an employee of CHA it is evident that the CHA firm had prior knowledge of the work of the Dock Clerk and that proves the CHA firms involvement. Hence the liability for penalty under Section 112(a) of the Customs Act was invoked against the Dock Clerk and the CHA. Notices were also issued to Md. Ayub.
3. After hearing both sides and considering the material on record it is found:- a) The goods were cleared on a BDF, which was filed, by a passenger, who had the liability to make correct declarations and made the declarations. The baggage was examined by the proper officer at UBC, as per prescribed procedure, thereafter adjudicated by the proper officer of Mumbai Customs House for not being eligible for imports.
Confiscation was ordered inter alia under Section 111(d). Duties and fines and penalties were imposed and paid by the passenger. Only thereafter the goods were allowed to be cleared and were being cleared and transported by the passenger men. There is no finding, as to concealment of the alleged excess goods in specially made cavities in the containers in which the baggage was imported. There is no finding as to how the goods as recorded by the proper officer, by his Examination Report, were used to conceal the goods found subsequently in excess. How goods, initially valued and at lesser amount, could conceal goods worth Rs. 12,25,810/- market value is not apparent from records. I, therefore, cannot share the enthusiasm of the authorities to arrive at the liability of the goods, cleared on BDF after adjudication for violations of Baggage Rules, Section 111(1) and (d) and being lower in value to be liable for confiscation under Section 119 of Customs Act, as they could not be found to conceal a much larger value goods, subsequently found, as allegedly valued by the Marine and Preventive officers.
b) Agency function of a CHA, is over, at that stage where he handed over the goods to be passenger ie, at UBC Mumbai Docks, when transport was organised by persons other than the CHA or his clerk.
It is on record and the case of Revenue, that the passenger (Shri Mohammed Ayub) and his contacts Shri Moideen and others engaged the tempos, with directions to take them to the market. The role of the Dock Clerk of CHA is limited, on facts and in law to ministerial assistance in the paper work and in getting the delivery of the goods from Port authorities and rendering assistance to the Custom Baggage Officer in examining the goods. Section 80 of the Customs Act 1962 provides for Declarations for clearance of baggage, to be made by the owner ie. the passenger to a proper officer. That has been got done by the BDF being signed by Md. Ayub. No liability of an agent and his clerk arises if that declaration is found to be incorrect until some act of a positive nature is brought out against a CHA or and his clerk. That is not found is this case. The proper officer of Mumbai Customs, at UBC has not taken cognizance of any malfeasance, nonfeasance or misfeasance on part of the Dock Clerk and/or the CHA, knowing fully well the role and liability of CHA and his employee in this matter. Nothing new has been revealed in the enquiries made by the M & P officers to bring out any additional material on record of any such acts on the performance of CHA functions on part of the present appellants. Therefore penalty on them cannot be upheld. c) The goods after proper examination and valuation have been confiscated and allowed to be redeemed by the proper officer of the Customs House, Mumbai in charge of UBC. The initiation of the present proceedings initiated by the M&P officers and concluded by the learned Commissioner (Preventive), to re-order confiscation, once again under Provisions of Section 111(d), 111(1) and 111(m), and/or Section 119 cannot be upheld in view of the Apex Court decision in the case of Mohan Meakin Ltd. {2000 (115) ELT 3 (SC)}.
In that view of the matter the penalty imposed under Section 112(b) in the present proceedings can not be upheld. (d) The adjudication proceedings did not consider Shri Mohammed Ayub, the passenger liable to any further penalty. Even when goods claimed by him on the BDF were found to be liable for confiscation by the Commissioner. Shri Moinuddin and others who had engaged the tempos have not been held to be liable for penalty for handling the transportation of the goods in question. The penalty on the CHA and his clerk under Section 112(a) therefore can not be upheld since they do not and can have no claim, on any goods ordered to be confiscated in this case. They have handled this Baggage Clearance case pursuant to a CHA license granted to them by Commissioner Mumbai Customs House and that agency function terminated with the delivery at UBC, of the goods, after due payments of fines, penalties and duties as imposed by the proper officer. The penalties as imposed cannot be therefore upheld.4. In view of the findings arrived at, the penalties are set aside and the appeals allowed.