Judgment:
1. This appeal is against the order of the Collector of Customs, Madras dated 7-11-1990. Under the impugned order the learned Collector has held that the appellants had exported the goods in violation of Section 40 of the Customs Act 1962, rendering the goods liable for confiscation and ordered confiscation of the same under Section 113(d) of the Customs Act and also levied on them penalty of Rs. 25,000/- under Section 114(1) of the Customs Act.
2. The brief facts of the case are that the authorities on scrutiny of the shipping bill filed by the appellant for export of granite found that an application filed along with the Shipping Bill for overtime showed forged signatures of the Asstt. Collector (Exports) and also of an Examiner therein. Further enquiries revealed that goods covered by the said shipping bill which had been stuffed in the container bearing No. MOLU 241353-9, in the appellant's premises in the presence of the Central Excise Officers had been shipped by the vessel M.V. Ilovik without complying with the Customs formalities as required under the Customs Act, 1962. Shri Natarajan, an employee of the appellant's firm in his statement admitted that he forged the signatures of the officers on the overtime application and that he got the shipping bill assessed on 1-10-1990 and he was able to bring the container inside the harbour on 2-10-1990 for shipment by the above said vessel and that he wanted to get the container examined on overtime as 2nd and 3rd Oct. were holidays. Further investigations revealed that the said Natarajan had given assurance to the International Clearing and Shipping Agents that he will be producing the necessary shipping bill after clearance by the Customs authorities on 4-10-1990 and prevailed upon the clearing agents for getting the container loaded on the ship. They in turn prevailed upon M/s. Marine Container Services (South) Pvt. Ltd., the steamer agent for the said vessel to load it on the ship presumably on the assurance given by Shri Natarajan, the employee of the appellant. The authorities found after investigation that the container had been loaded on the said vessel on 4-10-1990 and further investigations revealed that Shri Natarajan was trying to get the Bill of Lading while being fully aware of the shipment of the container without compliance with the necessary Customs formalities. The Managing Director of the appellant's firm was informed by him on 5-10-1990 about his failure to have had the container cleared through Customs and about the loading of the container on the ship. He however, did not come forward to inform the Customs authorities of what had transpired until much later. The learned Counsel for the appellant submitted that the appellant has not committed any violation of the Customs Act warranting confiscation of the goods under Section 113(d) of the Act as held by the lower authority. He pleaded that the learned lower authority has wrongly invoked the violation of Section 40 of the Act against the appellant.
The said Section, he pleaded, dealt with the obligation of the person-in-charge of conveyance not to load the goods unless the shipping bill duly passed by the proper officer had been handed over to him. He pleaded so far as the appellant is concerned they had no role to perform so far as Section 40 was concerned. He pleaded that unless there was a violation of the nature as set out under Sub-section (d) of Section 113 of the Customs Act the goods could not be confiscated under this section. He pleaded that the appellant's goods had been stuffed in the container at the appellant's premises under the supervision of the Central Excise officers as required by the procedure prescribed by the customs authorities in case of export by upcountry exporters. He further pleaded that for the mistake of their assistant Shri Natarajan, the company should not be penalised and the goods should not be confiscated. The appellants, he pleaded had no intention to clandestinely export the goods and were under the genuine impression that their assistant would arrange for the export after complying with all the necessary formalities under the Customs Act, 1962. He stressed, inasmuch as no case had been made out against the appellant under Section 40 of the Customs Act and no other violation has been indicated in the finding of the learned lower authority, the question of confiscation of the goods under Section 113(d) would not arise and in any case the penalty should not be levied on the appellant firm for the fault of their assistant, if any.
3. The learned JDR for the Department pleaded that the facts clearly bear out the mala fide intention of Shri Natarajan, the appellant's employee, who went to the extent of forging the signatures of the Examiner and also the Asstt. Collector and held out false promises to the clearing agents that he will produce the shipping bill after complying with the necessary formalities under the Customs Act and at his insistence, without the concerned shipping bill in hand, the clearing agent's representative asked the representative of the steamer agent to take the container in question on board for export. He pleaded, even after the appellant came to know about the shipment without compliance with the Customs formalities, as required under the law, they kept quiet and only at a later date came forward to explain their position regarding the shipment. By that time, he pleaded, the authorities were already seized of the matter and were taking steps to get the container back and had instituted necessary enquiries for the purpose of the proceedings. He pleaded that there is no warrant for any leniency in the matter.
4. We observe that the points that fall for our consideration are whether goods which were shipped without the Let Export Order from the Customs authorities and without complying with the Customs formalities are liable to confiscation under Section 113(d) and appellants liable for penal action. The main plea of the Learned Advocate is that the violation of the Section indicated in the show cause notice, viz., Section 40 cannot be held against the appellant as the confiscation under Section 113(d) for violation of provision of Section 40 held against the appellant is not maintainable in law and, therefore, the question of confiscation of goods does not arise.
To appreciate the plea made, Section 40 for the convenience of reference is reproduced below: "40. Export goods not to be loaded unless duly passed by proper officer. -- The person-in-charge of a conveyance shall not permit the loading at a Customs station :-- (a) of export goods, other than baggage and mail bags, unless shipping bill or bill of export or a bill of transhipment, as the case may be duly passed by the proper officer has been handed over to him by the exporter; (b) of baggage and mail bags, unless their export has been duly permitted by the proper officer." It is seen that this section relates to the person-in-charge of the conveyance by which the goods are to be exported. The shipping agent, it is seen, has also been penalised in the proceedings before us and invoking of this Section in the order of the learned lower authority is quite relevant so far as the agent of the vessel is concerned. So far as the appellant is concerned invoking of Section 40 is certainly misplaced in law, but that is not to say that no case for confiscation of the goods or penalising the appellant has been made out otherwise.
We observe that the appellants had waived the issue of show cause notice and were made aware of the charges made against them. The fact remains that the appellants' representative arranged to have the container containing the goods for export placed on board the vessel by holding out false promise that Customs formalities would be complied with, while being aware that this could not be done and when he was aware that loading of the container on the export vessel could be done only after necessary formalities under the Customs Act had been complied with. Their representative, Shri Natarajan, was aware that the Shipping Bills had to be processed by the Customs avithorities for giving the Let Export Order and verification of the seal on the container by the Customs authorities as a part of the examination of the goods under export had to be done and only after that shipment could be effected under the necessary Customs supervision. Since the Shipping Bill with the Let Export Order was not produced before the authorities, the question of supervision of the loading of the container by the authorities would not arise. Shri Natarajan, the assistant of the appellants, induced the clearing agent, viz., M/s.
International Clearing and Shipping Agents, who in turn induced the agent of the vessel (M.V. IIovik) M/s. Marine Container Services (South) Pvt. Ltd., to take the container on board when the same was not covered by the duly passed Shipping Bill for export purposes. The appellants in the personal hearing also explained the position before the learned lower authority in this context. There is a clear admission on record that the goods were loaded on the vessel without complying with the Customs formalities under the law. In the face of that a plea has been taken, since Section 40 has been quoted, which does not relate to an exporter, but to the person-in-charge of the conveyance, the order for that reason is vitiated and no action could be taken against the appellants. It is settled law that quoting of a wrong section is not fatal to an order so long as the violation for which the goods are confiscated can be read in the narration of the facts of the case and the findings of the adjudicating authority. In the present case, there is a clear finding that the goods had been shipped with the connivance of the appellants' representative, Shri Natarajan, who mala fidely had even forged signatures of the Examiner and an Asstt. Collector to show as if the goods had been examined by the Customs authorities without the Let Export Order for shipment by the Customs authorities and without subjecting the container to the verification of the seals fixed on the container by the authorities. We observe that Section 34 of the Customs Act clearly envisages that no export goods can be loaded on a conveyance except under the supervision of the proper officer. We, therefore, hold that the goods had been exported without complying with the requirements of the Customs Act and are, therefore, liable for confiscation under Section 113(d) of the Customs Act and we, therefore, uphold the order of the learned lower authority in this regard. The redemption fine fixed cannot be said to be excessive in the facts and circumstances of the case. In regard to the levy of personal penalty under Section 114 of the Customs Act on the appellant company, we observe that their employee had mala fidely arranged for the shipment of the goods without complying with the requirements of the Customs Act, as held by us above. The Managing Partner of the Company had been kept informed by their employee, Shri Natarajan, about the progress of the processing of the Shipping Bill, as seen from the narration of facts and the various statements on records. He was also made aware of the shipment of the goods without complyinng with the Customs formalities by the said Shri Natarajan. We observe that the Managing Partner of the company even at that stage did not feel it necessary to inform the authorities immediately about the wrong being done but kept quiet about it. His explanation that he had to be away with customer and could not immediately inform the Customs authorities about the wrong doing cannot be accepted. It was only at a later point of time, when the Customs authorities started probing the matter he came forward to inform the authorities about what had transpired. In the above view of the matter we hold that the appellant company has been rightly held to be liable to penalty and the penalty of Rs. 25,000/- levied cannot be considered to be excessive in the facts and circumstance of the case and we, therefore, uphold the order of the learned lower authority in this regard. The appeal is, therefore, dismissed.