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Issues involved: Allegations of overvaluation for claiming inadmissible drawback in consignments of polymix cotton fabrics for export, involvement of multiple parties in similar fraudulent activities, imposition of penalties and confiscation of goods, application for waiver of predeposit and stay of recovery of penalty u/s 117 of the Customs Act, 1962.
Summary: 1. Allegations of overvaluation and fraudulent activities: The consignments of polymix cotton fabrics presented for export were found to be overvalued to claim inadmissible drawback, leading to their seizure. Investigations revealed that multiple exporters had declared inflated values to obtain undue drawback. The impugned order by the Commissioner demanded the amounts of drawback already sanctioned, confiscated the export goods, and imposed penalties on those involved in the illegal exports. 2. Application for waiver of predeposit and stay of recovery: The application was filed by the Managing Partner of a shipping agency penalized u/s 117 of the Customs Act for failing to follow Customs House Agents Licensing Regulations. The Commissioner found the agency had not exercised due diligence, resulting in the export of overvalued goods. The applicant argued that the agency could not prevent the offense committed by the exporter and cited case law supporting this stance. The Tribunal noted that the offense was planned and executed by the exporter, absolving the agency of liability. 3. Tribunal's decision and case law references: After reviewing the case records and submissions, the Tribunal found that the offense of overvaluation was solely the exporter's responsibility, absolving the Customs House Agent (CHA) of any penalty. Citing relevant case law, the Tribunal emphasized that mere negligence or lack of diligence by the CHA does not warrant penal consequences unless there is evidence of malafide intention. The Tribunal granted waiver of predeposit and stay of recovery of the penalty pending appeal, acknowledging a strong prima facie case against the penalty. 4. Conclusion: The Tribunal ruled in favor of the appellant, granting waiver of predeposit and stay of recovery of the penalty, highlighting the exporter's primary role in the fraudulent activities and the CHA's limited liability in such cases. Note: The judgment was pronounced by Shri P. Karthikeyan, J.
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