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Issues: Violation of EXIM Policy provisions leading to confiscation of goods and imposition of penalty under Customs Act.
Analysis: 1. The appellant exported a consignment declared as "Iron Ore Fines Grade 65%" but subsequent tests revealed a higher Fe content, contravening the EXIM Policy restricting export of iron ore with Fe above 64%. A show cause notice was issued for confiscation and penalty under Customs Act sections 113 and 114, respectively. 2. The appellant contested the penalty, arguing that the test reports were unreliable due to incorrect sampling methods. The Commissioner imposed a penalty of Rs. 25 lakhs based on the higher Fe content found, leading to confiscation under Section 113. The appellant cited a test report by another entity showing Fe content within permissible limits. 3. The SDR presented documents including an Inspection Certificate from China showing Fe content above 65% and a credit note indicating payment for the extra Fe content. However, the appellant's case against the penalty remained strong as the test reports were deemed unreliable by the Commissioner. 4. The Tribunal found in favor of the appellant, noting that the rejection of the test reports by the Commissioner undermined the basis for confiscation and penalty. The Commissioner's observations beyond the scope of the show cause notice were deemed irrelevant. The impugned order was set aside, and the appeal was allowed. 5. The Revenue was advised to frame a stronger case in future notices based on available evidence to impose penalties under the Customs Act. The department was encouraged to pursue legal avenues within the framework of the law. 6. The appeal was disposed of, emphasizing the importance of adhering to legal procedures and evidence in matters concerning export violations and penalties under the Customs Act.
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