2004 (9) TMI 509 - AT - Customs

Summary

Issues: Confiscation of goods, penalties imposed, over-valuation of goods, intention to defraud the government, validity of confiscation order, justification of penalties imposed, role of individuals in the export attempt.

Confiscation of Goods:
The judgment involves two appeals against a common order-in-original where the Commissioner of Customs ordered the confiscation of goods and imposed penalties on the appellants. The case revolves around the interception of a container carrying PVC soles for export, which was found to be grossly over-invoiced. The investigation revealed that the goods were being exported by the appellant No. 1, and various individuals were involved in the export attempt. The show cause notice was issued for confiscation and penalty imposition.

Over-Valuation of Goods and Confiscation:
The appellants contended that due to over-valuation of goods, confiscation should not be ordered since the export was not prohibited at the time. However, the Tribunal referred to a Supreme Court judgment defining over-invoiced goods as prohibited, allowing for confiscation. The investigation found the goods were highly over-invoiced to gain wrongfully from the DEPB Scheme. The market price of the goods was significantly lower than declared, and bogus invoices were submitted. The Tribunal upheld the confiscation order based on these findings.

Intention to Defraud the Government:
The appellants argued that they acted in good faith and did not intend to defraud the government. However, evidence showed that the appellant No. 1 acted mala fide by submitting false invoices and misrepresenting the purchase details. The Tribunal concluded that the firm's actions were not bona fide, as they tried to deceive authorities regarding the goods' value and origin.

Penalties Imposed:
While the confiscation order was upheld, the Tribunal found the penalty imposed on the appellant No. 1 to be excessive. The penalty was reduced from Rs. 60 lakhs to Rs. 30 lakhs, considering the circumstances. Additionally, the penalty imposed on another individual, appellant No. 2, was set aside as there was no justification for his involvement in the export attempt. The redemption fine imposed was deemed reasonable and upheld.

Conclusion:
In conclusion, the impugned order regarding confiscation was upheld, with a modification in the penalty imposed on appellant No. 1. The penalty on appellant No. 2 was set aside due to lack of involvement in the wrongful export attempt. The judgment disposed of the appeals accordingly, maintaining the confiscation order but adjusting the penalties based on the findings and circumstances of the case.