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Issues:
1. Liability to confiscation under Section 113(d) and penalty under Section 114 of the Customs Act on goods sought to be exported due to inflated value for DEPB benefit. 2. Whether the mis-declaration of goods justifies confiscation and penalty under the Foreign Trade (Regulation) Rules, 1993. 3. Applicability of legal provisions regarding redemption fine and penalty in cases of confiscation of goods for export. Detailed Analysis: 1. The appeal before the Appellate Tribunal CESTAT, Mumbai was against an Order-in-Appeal passed by the Commissioner (Appeals) of Customs, Ahmedabad. The case involved the export of man-made bleached fabrics poly/cotton under duty drawback scheme. The appellant mistakenly misdeclared the goods as dyed fabrics, leading to a query during export. Despite initial confusion and subsequent clarification, the goods were confiscated under Section 113(d) of the Customs Act, with a fine and penalty imposed. The Commissioner upheld the decision citing violation of Foreign Trade (Regulation) Rules, 1993, and the appellant's unintentional mistake. However, the Tribunal, referring to precedents like Ramayan Impex and Suresh Jhunjhunwala, held that the liability to confiscation and penalty cannot be sustained, especially considering the mix-up of bleached and dyed fabrics. Consequently, the fine and penalty were set aside, and the appeal was allowed. 2. The Commissioner's decision to confiscate the goods under Section 113(d) of the Customs Act and impose a fine and penalty was based on the misdeclaration of goods for DEPB benefit. The Commissioner invoked Rule 11 and Rule 14 of the Foreign Trade (Regulation) Rules, 1993, stating that any violation of these rules renders the goods prohibited goods. The Commissioner found that the misdeclaration would have resulted in the grant of DEPB benefit, justifying the confiscation under Section 113(d). The Commissioner also emphasized that the redemption fine and penalty were not excessive, as they were based on the market value of the goods. However, the Tribunal disagreed with this reasoning, setting aside the fine and penalty considering the circumstances of the case and the mix-up of goods by the exporter. 3. Regarding the issue of redemption fine and penalty in cases of confiscation for export, the Tribunal clarified that the market value of the goods is crucial in determining the amount of fine and penalty. In this case, the market value of the goods was over 7 lakhs, leading the Tribunal to conclude that the fine and penalty imposed were excessive. The Tribunal highlighted that the limit of redemption fine and penalty is tied to the market value of the goods, and in this instance, the fine and penalty were deemed disproportionate. As a result, the fine and penalty were set aside, and the appeal was allowed on the grounds of the inflated value for DEPB benefit and the mix-up of goods during export. This detailed analysis of the judgment outlines the issues, legal reasoning, and the Tribunal's decision, providing a comprehensive understanding of the case.
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