[Order]. - These appeals are filed by M/s. G.M. Enterprises against the confiscation of export goods, redemption fine of Rs. 5 lakhs and penalty of Rs. 2 lakhs and by Shri Gulam Mohd. A. Wahab, M/s. Sainath Clearing Agency and Shri Harsh Srivastava against the imposition of penalty under Section 113 of the Customs Act, 1962.

2. The facts of the case are that M/s. G.M. Enterprises (GME) filed four shipping bills for export of Table Kitchenware & other household articles made of stainless steel with nickel content of 8% and above claiming drawback through their CHA M/s. Sainath Clearing Agency. The goods were examined and stuffed in container under the supervision of a Customs Appraiser on 29-12-2006 at a private warehouse located at Jasai, 5 Km away from JNPT Custom House.

2.1 On 5-1-2007, the above said container bearing Customs Bottle seal No. 14793 was brought to CFS of CWC at Dronagiri for detailed examination in the presence of the exporter and the CHA. On examination, it was found that the actual gross weight of the goods was 7011 kgs, as against the declared weight of 9699.76 kgs. There was a difference of 2687.24 kgs. in the weight. As the goods were misdeclared with regard to weight of the consignment with intention to avail higher drawback than was due, they were seized after drawing representative samples.

2.2 On chemical examination of the representative samples, it was reported that the nickel content in all the samples fell in the range from 0.2% to 0.8%, which was much lesser than the nickel content of 8% and above, as declared in the shipping bills. There was also misdeclaration of nature of the goods to avail higher drawback. Survey of the marker value of the goods declared revealed that the FOB value declared for the goods i.e. Rs. 25,96,908.60 was reasonable and fair.

2.3 It was also found that the warehouse stuffing permission was granted, wherein the goods to be exported were declared as Indian Toiletries and other household articles. Statement of Shri Gulam Mohd. A. Wahab, partner of GME was recorded and after further enquiries, department issued show-cause notice proposing to confiscate the goods, impose penalties and restrict the duty drawback. The matter was contested. Finally the matter was adjudicated by the Commissioner ordering the confiscation of the goods under Section 113 of the Act with an option to redeem the same against payment of fine of Rs. 5 lakhs. Penalties of Rs. 2 lakhs each imposed on GME and Gulam Mohad. A Wahab. Penalties of Rs. 1 lakh each was imposed on Sainath Clearing Agency and Shri Harsh Srivatava, Appraiser of Customs were also imposed. Against the above said order, the appellants are before me.

3.1 Shri J.C. Patel, learned Advocate appearing on behalf of M/s. GME and Gulam Mohd. A. Wahab submits that the exporter was exporting Kitchen and other household articles on drawback scheme. The said goods were purchased from manufacturers from various places and the same were brought to Saileela Warehouse at Jasai on 27-12-2006. He further submitted that the exporter did not know the exact quantity of the goods, the packing lists were produced by GME on the bills of regular supplier and accordingly they were filed. He further submitted that the goods were directly sent to warehouse from the manufacturers premises, the exporter could not verify the weight of the goods, invoices and packing lists were prepared based on the bills produced by the manufacturer. He further submitted that although the exporter applied for permission of proper officer for warehouse stuffing of Table kitchen and other household articles, but he could not procured the items in time but the buyers wanted to send only utensils urgently. He further submitted that the exporter did not get the examination done with regard to nickel contents in the export goods as it was mentioned on the face of invoices that all the goods are containing 8% nickel. He further submitted that as the exporter was having no knowledge about the shortages of weight and contents of the nickel in the export goods, on believes of the suppliers, packing lists and shipping bills were prepared for export of the goods. There was no deliberate intention to misdeclare the goods. He further submitted that enquiry was neither made from the local suppliers nor the suppliers were made co-noticees in the impugned case and there was no admission of any of the parties. Hence, the confiscation of goods, imposition of redemption fine and penalties are not sustainable. He further submitted that in the case of Oriental Containers Ltd. v. Union of India reported in (Bom.), the Honble High Court held that the partners are not party to the fraud and there was no mala fide intention on the part of the petitioners in importing the Tin Plate/Waste instead of Tin Plate Prime. In fact, the petitioners have paid to the foreign supplier the price of tin plate prime and in return got tin plate waste. The petitioners have paid the customs duty payable on tin plate prime. Under the circumstances, when the petitioners are innocent victims of the fraud played by the foreign supplier and the petitioners have suffered double jeopardy by paying the price and the duty payable on tin plate prime, on account of the fraud committed by the foreign supplier, the petitioners could not be held to be guilty of violating any of the provisions of the Act. He further submitted that in the case of Kirti Sales Corpn. Reported in (Tri.-Del.), it was held that there was no intentional or deliberate wrong declaration or misdeclaration on the part of the appellant based on the documents supplied by the foreign supplier. Hence, no misdeclaration could be found. In the case of Shree Ganesh International reported in (Tri.-Del.), the Tribunal found that declaration on the Bill of Entry on the basis of documents received by them from their foreign supplier, the test report of the foreign supplier, which clearly mentions that the goods are non-texturised fabrics. They have also claimed that a similar consignment imported by them from the same supplier had earlier been cleared as non-texturised polyester fabrics which gave them the bona fide belief that present consignment would also be of non-texturised variety. Hence, it was held that there was no mens rea and penalty was not imposable.

3.2 In alternate, Shri J.C. Patel, learned Advocate submitted that if it is to be held that the exporter has misdeclared the goods to avail higher duty drawback, the redemption fine and penalties on the appellants are highly excessive and there could be no penalty on Shri Gulam Mohd. A. Wahab being a partner of the appellant firm M/s. GME as held by the Honble High Court of Bombay in the case of Commissioner of Customs (EP) v. Jupiter Exports reported in (Bom.), that when the partnership firm is penalized, separate penalty cannot be imposed on partners.

3.3 Shri G.B. Yadav, learned Advocate appearing on behalf of M/s. Sainath Clearing Agency (CHA) submitted that CHA had submitted the proper shipping bills as instructed by the exporter on the basis of documents supplied to him and there was no mala fide intention or knowledge to the CHA that the goods were misdeclared in weight and nature. He further submitted that the appellant has acted on behalf of the exporter in bona fide belief and no statement of the CHA was recorded during the course of investigation. The appellant has acted as per the provisions of CHALR, 2004 in bona fide belief and no penalty can be imposed against the appellant. Moreover, no proceedings were initiated against him under CHALR, 2004. He placed reliance on V. Esakia Pillai v. Commissioner of Customs, Chennai - (Tri.-Chennai), wherein it was held that there is no evidence either in form of a confessional statement of the appellant, or any statement of exporter or any body to show that the appellant had knowledge or information that the contents of 1030 bags were different from those described in the shipping bills. There is no confessional statement of the CHA or any statement of exporter alleging that the CHA knew the contents. If there was no corroborative evidence or statement of anybody alleging that the CHA had information, knowledge or connived in surreptitious export of the goods, penalty cannot be imposed.

3.4 Shri Anil Balani, learned Advocate appearing on behalf of Shri Harsh Srivastava, Apprising Officer, submitted that in the impugned order, the Commissioner has given finding in para 35 that appellant has not authority to examine the cargo and by doing so in an improper manner without due care and diligence, abetted the commission of the offence. In contrary to that he held in para 54 of the impugned order that no investigation was made hence, I extend the benefit of doubt to the officer. He submitted that when no proper investigation was done in the matter with regard to the role of the appellant, no adverse finding can be incorporated. He further submitted that the appellant has examined the impugned goods in his official capacity of Apprising Officer in normal course of his duties. Hence, the finding of the Commissioner that the officer had failed to perform his duty and simply examined the cargo in routine manner does not fasten any conclusion of negligence on part of the appellant. There was no shipping bills given to the appellant, hence no chemical examination was required to do. The appellant has executed his duties with due diligence in routine manner. Hence allegations against the appellants are not sustainable. There is no material on record to show that there was any connivance with the party and the officer, Hence, no allegation against the appellant is sustainable. To support this contention, he placed reliance on Commissioner of Customs, New Delhi v. Hargovind Export - (Tri.-Del.), wherein it was held that no material to show that the officers had connived with the exporter in misdeclaring the goods, only highlighting the dereliction of duty by the respondent not sufficient for imposition of penalty. He further relied on Commissioner of Customs, New Delhi v. M.I. Khan - (Tri.), wherein this Tribunal has held that protection against initiation of adjudication proceedings for imposition of penalty available to customs officers under Section 155 of the Customs Act, 1962, Commissioners order dropping penal proceedings against officers, initiated for connivance in mis-declaring export consignment was upheld.

4.1 On the other hand, Shri S.M. Vaidya, learned JDR appearing on behalf of the Revenue submitted that this case is of clear misdeclaration of weight and nature of the goods with an intention to avail higher drawback. It is not a case of the appellant that they have imported the goods and where they are not able to examine the goods before importation. In this case, it is duty of the exporter to give the correct weight and nature of the goods in shipping bills. Moreover, it is the duty of the exporter to examine the goods first then to export. Hence, the exporter cannot run away from his liabilities. If the goods were not intercepted by the department, the impugned goods would have been exported as misdeclared and higher drawback would have been availed. The decisions cited by the learned Advocate are of cases of the import of the goods. Hence, these decisions are not relevant.

4.2 With regard to CHA he submitted that CHA is accountable for the action relating to his work and in this case, the goods have been found misdeclared. Hence, the CHA is liable for penalty.

4.3 With regard to the Apprising Officer, he reiterated the impugned order.

5. Heard.

6.1 On careful examination of the materials on record and hearing the arguments of all the parties, I find that it is a case of export of the consignment to avail duty drawback. In this case, the exporter did no verify the contents like weight and nature of the goods and filed the shipping bills. It is duty of the exporter to examine and verify the contents like weight and nature of the goods before exportation. The exporter cannot take excuse that the shipping bills have been filed on the basis of the invoices supplied by the supplier of the goods. The decisions relied on by the learned Advocate have dealt with the import of the goods, which are not relevant to this case. In the case of import, importer has to depend on the invoice/import documents. But in the case of export, the exporter is duty bound to export the goods as per specifications mentioned in the invoice and shipping bills. Hence, I do not find any reasons to interfere with the impugned order qua the exporter M/s. GME. Accordingly, I confirm the confiscation of the goods and penalty on M/s. GME.

6.2 I find that the redemption fine and the penalties are highly excessive on the appellant as contended by the learned Advocate. Accordingly, I reduce the redemption fine from Rs. 5 lakhs to Rs. 2 lakhs and penalty from Rs. 2 lakhs to Rs. 50,000/-. The penalty on Shri Gulam Mohd. A. Wahab is not sustainable in view of the decision in the case of Jupiter Exports (supra), wherein the Honble High Court has held that no separate penalty be imposed on the partner when the partnership firm is penalized. In this case, the firm M/s. GME has been penalized. Hence, no penalty is sustainable on the partner. Accordingly, penalty imposed on Shri Gulam Mohd. A. Wahab is waived.

6.3 M/s. Sainath Clearing Agency - I find that CHA has acted in the bona fide belief documents supplied to him for preparing shipping bills and no statement of the CHA was recorded and there is no statement of the exporter that CHA was having any knowledge about misdeclaration of the goods. In that situation, the penalty on the CHA is not leviable. The decision of V. Esakia Pillai (supra) is squarely applicable to this case, wherein this Tribunal has held that no evidence is available on record in form of confessional statement or any statement of the exporter or anybody to show that CHA had knowledge and information about the misdeclaration of the goods. Accordingly, the penalty imposed on CHA is waived.

6.4 Shri Harsh Srivastava - with regard to the Appraising Officer, I find that the Commissioner has given the benefit of doubt to the appellant as no investigation took place with regard to the role of the appellant. When the Commissioner has held that appellant has been given the benefit of doubt with regard to his actions as Apprising Officer in examining the shipping bills, hence protection under Section 155 of the Customs Act, 1962 is available to the Appraising Officer. The decision cited by the appellant in the case of M.I. Khan (supra) is squarely applicable to this case. No investigation was done with regard to the role of the appellant, the allegations are not sustainable. Accordingly, I set aside the penalty against the appellant.

7. With these observations, the appeals are disposed of in the above manners.

(Pronounced in Court on 7-5-2010)