2007 (4) TMI 85 - AT - Customs

Confiscation, fine and penalty - Alleged that appellant had made misdecleration regarding value and quantity of export goods and accordingly fine and penalty demanded - Held that Allegation was correct and fine and penalty sustained

Issues Involved:
1. Mis-declaration of weight and value of export goods.
2. Validity of ARE-1 Form and the declared PMV (Present Market Value).
3. Confiscation of goods and denial of DEPB claims.
4. Imposition of penalties on involved parties.

Detailed Analysis:

1. Mis-declaration of weight and value of export goods:
The goods were found to be significantly less in weight than declared in the shipping bills, with discrepancies of about 45% in both cases. The appellants argued that the net weight was determined based on a sample and not a 100% weighment. However, the tribunal noted that the weighment was conducted in the presence of the appellants, who did not request a full weighment at the time. The tribunal upheld the finding of shortage in weight, stating that the appellants cannot challenge the sample weighment now as they had agreed to the examination report initially.

2. Validity of ARE-1 Form and the declared PMV:
The ARE-1 Forms indicated that the goods were manufactured by M/s. Shreeji Enterprises, which was later admitted to be false by the proprietor, who stated that the goods were purchased from the open market. The tribunal found that the false declaration regarding the manufacturer invalidated the ARE-1 value. The market survey conducted showed a significant discrepancy between the declared PMV and the actual market value. The tribunal rejected the appellants' argument that the market survey was not reliable due to the time gap and lack of detailed testing of the fabric. The tribunal upheld the rejection of the declared PMV based on the market survey and the admission by the proprietor.

3. Confiscation of goods and denial of DEPB claims:
The Commissioner had confiscated the goods under Sections 113(d) and 113(i) of the Customs Act, 1962, and disallowed the DEPB claims due to mis-declaration of value and weight. The tribunal upheld the confiscation and the denial of DEPB claims, stating that the PMV was mis-declared, and the ARE-1 value could not be accepted due to the false declaration regarding the manufacturer.

4. Imposition of penalties on involved parties:
Penalties were imposed on the proprietors of the exporting firms and other involved parties for abetment. The tribunal found that the penalties were justified due to the mis-declaration and the role of the involved parties in the fraudulent activities. However, the tribunal considered the penalties and redemption fines imposed to be excessive and reduced them as follows:

- Citizen Impex:
- Redemption Fine: Reduced to Rs. 5 Lakhs.
- Penalty on Proprietor: Reduced to Rs. 2 Lakhs.
- Penalty on Shri Suresh Ladha: Reduced to Rs. 5 Lakhs.
- Penalty on Shri Rakesh Agarwal: Reduced to Rs. 1.5 Lakhs.

- Neptune Impex:
- Redemption Fine: Reduced to Rs. 10 Lakhs.
- Penalty on Proprietor: Reduced to Rs. 4 Lakhs.
- Penalty on Shri Suresh Ladha: Reduced to Rs. 10 Lakhs.
- Penalty on M/s. Shreeji Enterprises: Reduced to Rs. 3 Lakhs.

Conclusion:
The tribunal upheld the findings of mis-declaration in weight and value, the invalidity of the ARE-1 Form, and the confiscation of goods along with the denial of DEPB claims. The penalties imposed on the involved parties were found to be justified but were reduced considering the circumstances. The appeals were partly allowed with the revised penalties and fines.

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