Smuggling Red Sanders - Jurishour No. 1 Latest News Portal

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld the order confiscating the prohibited red sanders which was attempted to be exported under section 113 of the Customs Act and imposed penalties of Rs. 2,43,000 on the appellant/exporter and Rs. 80,000 on Fedex under section 114 of the Customs Act.

The bench of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the airway bill was filed in the name of the appellant by his employee on his directions and when the consignment was caught, the appellant attempted to shift the blame to his employee.

The bench noted that the Airway Bill was filed in the name of the appellant on 03.08.2012 and it was intercepted and was seized on 16.11.2012. In his statement made on 31.01.2013, the appellant said that Brijlal had left the job about two months before and that he did not know his address. It is unthinkable that if the employee attempts to smuggle goods in the name of his employer without his consent in August 2012, the employer would continue to keep him employed until November 2012.

Background

An airway bill was filed in the Air Cargo Exports through Fedex courier and it was destined to Hongkong. Suspecting that the consignment was containing some goods prohibited for export, the officers detained the consignment by issuing a Detention Memo and requested the Wildlife Crime Control Bureau to submit a report about the wood that was being exported.

It was reported that the declaration in the Airway Bill (AWB) that it was pine wood was incorrect and it appears to be Red Sanders, the export of which is prohibited under the Foreign Trade Policy.

The customs officers seized the consignment under section 110 of the Customs Act, 1962 and handed over the consignment to the custodian of the air cargo complex for safe custody.

After recording statements and completing the investigations, a show cause notice was issued to the appellant and to the courier M/s. Fedex. The appellant did not submit any reply but appeared for personal hearing and claimed that the consignment was booked in the name of his firm by his employee Brij lal without his authorization.

The Deputy Commissioner passed the order confiscating the prohibited red sanders which was attempted to be exported under section 113 of the Customs Act and imposed penalties of Rs. 2,43,000/- on the appellant and Rs. 80,000/- on Fedex under section 114 of the Customs Act. This order was upheld by the order.

Arguments

The exporter contended that the appellant’s employee Brijlal had booked the consignment without his knowledge and therefore, the appellant was not responsible. The courier Fedex had accepted the shipment without declaration of the quality of goods in question and therefore, Fedex is responsible.

The exporter argued that the confiscated goods were not red sanders at all and therefore, the appellant requested that the sample may be tested but this was not done.

The department contended that the Airway Bill was filed through Fedex to export goods which were intercepted. The Airway bill was filed in the name of the appellant. On examination, the goods were found to be red sanders- an endangered species of tree whose wood is prohibited for export from India.

The department argued that the appellant/exporter is fully responsible for the actions of his employees.

Conclusion

The tribunal while dismissing the exporter’s appeal held that if they were not his goods but were exported by the exporter’s employee on his own using the exporter’s name, the exporter would not know anything about the goods, let alone their value.

FAQs

Is Exporter Responsible For Employee’s Action Of Smuggling Red Sanders?

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in the case of Shri Krishna Chandra Agrawal Versus Deputy Commissioner of Customs upheld the order confiscating the prohibited red sanders which was attempted to be exported under section 113 of the Customs Act and imposed penalties of Rs. 2,43,000 on the appellant/exporter and Rs. 80,000 on Fedex under section 114 of the Customs Act.

What is the penalty provison for smuggling red sanders ?

The Deputy Commissioner shall pass the order confiscating the prohibited red sanders which was attempted to be exported under section 113 of the Customs Act and impose penalties under section 114 of the Customs Act.