2006 (3) TMI 391 - AT - Customs

Summary

Issues:
Challenge to personal penalty under Section 114 of the Customs Act for mis-declaration of exported goods to benefit under DEPB Scheme.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai concerned the imposition of a personal penalty of Rs. 2,00,000 under Section 114 of the Customs Act on the basis of mis-declaration of exported goods to gain undue benefits under the DEPB Scheme. The appellant argued that the penalty provision under Section 113(d) of the Customs Act, applicable to prohibited goods, should not be invoked as the exported goods were not prohibited for export. The appellant relied on a Supreme Court decision in the case of Commissioner of Customs (EP), Mumbai v. Prayag Exporters Pvt. Ltd., which supported their position. The Tribunal noted that the said Supreme Court decision had upheld the view that Section 113(d) applies to prohibited goods and not to goods like those in the present case, which were not prohibited for export and did not attract export duty. Consequently, the Tribunal set aside the personal penalty imposed on the appellant, amounting to Rs. 2,00,000, and allowed the appeal in favor of the appellant, providing consequential relief.

This judgment highlights the importance of correctly interpreting penalty provisions under the Customs Act in cases of mis-declaration of goods for export benefits. It underscores that penalties under Section 113(d) are specifically intended for prohibited goods, and penalties should not be imposed on goods that are not prohibited for export. The reliance on a Supreme Court decision further strengthens the appellant's argument and contributes to the Tribunal's decision to overturn the penalty imposed on the appellant. The Tribunal's decision to provide consequential relief to the appellant demonstrates a just application of the law based on established legal principles and precedents.