2008 (9) TMI 856 - AT - Customs

Summary

Issues involved: Attempted export of consignment contrary to prohibition, confiscation under Customs Act, imposition of penalty and fine, appeal for out-of-turn hearing, waiver of predeposit of penalty, grounds for final disposal of appeal.

Out-of-turn hearing application: The appellant sought out-of-turn hearing for an appeal regarding the attempted export of Basmati rice contrary to a prohibition imposed by the Ministry of Commerce. The consignment was confiscated under Section 113 of the Customs Act, with a penalty and fine imposed on the appellants. The appellant requested expedited disposal of the case due to concerns about the consignment becoming unfit for human consumption if stored for a prolonged period at the port. The Tribunal granted the application, allowing the appeal to be taken up for decision.

Arguments raised in the appeal: The appellants argued that they possessed a valid Registration-cum-Allocation Certificate for exporting Basmati rice to Singapore, issued by APEDA under the Ministry of Commerce. They claimed that they were unaware of a notification restricting rice export from Chennai Port, leading to the confiscation of the consignment and imposition of penalties. The lower authorities upheld the confiscation and penalties, which the appellants sought to vacate based on their lack of knowledge about the restriction.

Decision and reasoning: After considering the submissions, the Tribunal found that the appellants' actions were based on a bona fide belief and lack of awareness regarding the export restriction. While a technical violation occurred due to the notification issued by DGFT, the Tribunal deemed the heavy fine and penalty imposed as unreasonable. Citing a Supreme Court case, the Tribunal emphasized that penalties should be imposed only in cases of deliberate defiance of the law, contumacious conduct, or dishonesty. Therefore, the Tribunal vacated the penalty and reduced the fine to Rs. 5,000, acknowledging the breach of provisions but considering the circumstances and intent of the exporter.

Conclusion: The Tribunal allowed the appeal, vacated the penalty, and reduced the fine, considering the exporter's lack of willful contravention and the technical nature of the violation. The decision aimed to balance the enforcement of regulations with fairness and proportionality in penalties imposed.