Exporter Not liable For 'Change Of Landing Port' Instructions Given By Importer: CESTAT

The Ahmedabad Bench of the Customs, Excise and Service Tax Tribunal (CESTAT) has ruled that the exporter is not responsible for the instructions given by the importer regarding the change in the port after the issuance of a "Let Export Order" by the customs authority. The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the appellant lost the ownership of the goods as soon as the "let export order" was issued by the Customs authorities. After the export order, it was the responsibility of the shipping lines to ship the goods to the foreign buyer, with the exporter having no control over the goods. Hence, the appellant cannot be held responsible if the importer situated in Iran had given instruction to change the port from Bandar Abbas port to Jabel Ali port. After the "let export order" was issued by the Customs authorities, it was the importer in Iran who became the owner of the goods. The appellant, M/s Janki Dass Rice Mills, had exported rice under disputed shipping bills which were originally booked for Iran, but investigation revealed that the consignments were delivered to the UAE. Hence, it leads to the violation of the provisions of para 2.40 and 2.53 of Foreign Trade Policy. A show-cause notice was issued. After due process of law, the adjudicating authority had held that the goods were liable for confiscation under Sections 113 (i) and 113 (d) of the Customs Act 1962. The department imposed the penalties under Section 114 and Section 114AA of the Customs Act 1962 read with Section 11(1) of the Foreign Trade (Development & Regulation) Act 1992, Rule 11 and 14(2) of the Foreign Trade (Regulation) Rules 1993 read with provisions of Section 50 of the Customs Act 1962. The appellants filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) upheld the order of the Additional Commissioner, Customs House, Mundra and dismissed the appeals filed by the Appellant. The appellant submitted that allegations are based on statements of people and employees and letters from shipping lines stating that containers were discharged at Jabel Ali Port in the UAE. No inquiry or investigation, whatsoever was conducted as to what happened to the containers/goods after they were offloaded at Jabel Ali. During the investigation, the appellant had always maintained that the goods, though offloaded at Jabel Ali, ultimately reached Iran. The proof of receipt of the goods by the original consignee as well as the remittance as received from the very same consignee were also submitted by the appellant before the department. The appellant submitted that its request for cross-examination of witnesses in compliance with the Principles of Natural Justice and compliance with provisions of Section 138B was denied by the department. The procedure prescribed under Section 138B was required to be followed. However, in disregard to the mandate provided under the Act and the settled legal principle of natural justice, the authorities continued to rely upon such statements without affording an opportunity for examination or cross-examination of the witnesses. Consequently, the order was liable to be set aside. The appellant contended that once the goods were shipped and the bill of lading was issued, the goods became the property of the purchaser of the goods. The title to the goods becomes vested with the foreign buyer. The purchaser, who held the title to the goods, was then free to deal with the goods. Therefore, the change in port of discharge of the containers/goods after the goods were out of charge and handed over to shipping companies and loaded on the vessel was the prerogative of the consignee/foreign buyer. Thus, the Indian exporter cannot be held liable for any act at the behest of the foreign buyer. The CESTAT held that all the documents in respect of disputed consignments were in the name of Iranian buyers. There is nothing on record to show that the documents were amended at any stage so as to permit the import of goods from the UAE. The department never produced any documentary evidence to show that the export documents produced by the appellant were false and fabricated. "We find that once all the export documents were in the name of Iranian buyers, there was no scope for clearance of the goods in the UAE and their subsequent sale. Furthermore, the department never disputed the impugned consignments' foreign remittances in Indian rupees from Iran. In the present matter, the appellant also produced documentary evidence related to re-exported/transshipments from Dubai to Iran," the tribunal said. The tribunal found that the CHA had filed shipping bills as per the documents provided to him by the exporter. The appellant was working on the instructions of the exporter. As a result, the Appellants' true intentions cannot be questioned. The act of filing the export...

Exporter Not liable For 'Change Of Landing Port' Instructions Given By Importer: CESTAT

Mariya Paliwala

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