2004 (1) TMI 563 - AT - Customs

Issues Involved:
1. Overvaluation of export goods.
2. Imposition of penalties under Section 114 of the Customs Act.
3. Non-mention of specific sub-sections in the Show Cause Notice.
4. Role and liability of Customs House Agents (CHA).

Issue-wise Detailed Analysis:

1. Overvaluation of Export Goods:
The case revolves around M/s. Jaycee Exports filing shipping bills for exporting non-metallic writing instruments under the DEPB scheme, declaring an FOB value of Rs. 56,73,889/-. Upon investigation, it was found that the export consignment was overvalued to seek undue benefit under the DEPB scheme. M/s. Jaycee Exports could not correlate the inward remittances to the export values shown in the shipping bills and admitted to overvaluation to avail excess DEPB credit. Consequently, the goods were allowed to be exported, and a show cause notice was issued proposing penal action under Section 114 of the Customs Act.

2. Imposition of Penalties under Section 114 of the Customs Act:
The Commissioner of Customs determined the value of the pens as Rs. 6/- per piece under Section 14 of the Customs Act and imposed a penalty of Rs. 5 lakhs on M/s. Jaycee Exports under Section 114 of the Customs Act. Additionally, a penalty of Rs. 50,000/- was imposed on M/s. International Cargo Agents for aiding and abetting M/s. Jaycee Exports in the commission of the offense.

3. Non-Mention of Specific Sub-Sections in the Show Cause Notice:
The appellants argued that the Show Cause Notice did not mention the specific sub-sections of Section 113 of the Customs Act, nor the provisions of Section 50 of the Customs Act and Section 18(1)(a) of FERA, 1973. The Tribunal held that non-mention of the sub-section of Section 113 does not vitiate the Show Cause Notice when the offense committed has been specifically mentioned. The Commissioner referenced these sections to establish that the goods attempted to be exported were prohibited goods, thus liable for confiscation under Section 113(d) of the Customs Act and the exporters liable for penalty under Section 114 of the Customs Act. The Supreme Court's decision in Om Prakash Bhatia v. CC, Delhi was cited, supporting the view that over-invoicing of export goods amounts to prohibited goods, justifying the penalties imposed.

4. Role and Liability of Customs House Agents (CHA):
M/s. International Cargo Agents were found to have deliberately suppressed the fact of presenting the consignment first at ICD Bangalore and then at Air Cargo Complex, Bangalore with enhanced value. The Commissioner concluded that M/s. International Cargo Agents were aware of the overvaluation and aided M/s. Jaycee Exports in the commission of the offense. Therefore, the penalty imposed on M/s. International Cargo Agents under Section 114 of the Customs Act was justified. However, considering the suspension of their license for a considerable period, the penalty was reduced to Rs. 25,000/-.

Conclusion:
Both appeals were rejected, except for the modification in the penalty amount for M/s. International Cargo Agents. The Tribunal upheld the penalties imposed by the Commissioner, affirming that the offenses were clearly mentioned in the Show Cause Notice, and the appellants were given sufficient opportunity to defend themselves.

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