2011 (4) TMI 216 - AT - Customs

Confiscation - Penalty - Notification No.93(RE-2007)/2004-2009, dt.1.4.98 - There was no intention to export non basmati rice, though declared by the appellant as Basmati rice, and in as much as the export of non-Basmati rice is prohibited - CHA was not aware of the fact that consignment of rice declared as that of Basmati rice was, in fact, of non-Basmati rice - appellant has nowhere produced any evidence to show that they were dealing with non-Basmati rice for the local traders and there was any mix up of the same in their godown - Held that imposition of separate penalty on the said appellant in terms of Section 114AA, which provides for wrong making of declaration, statements, would not be justifiable - Held that imposition of penalty of Rs.2 lakhs (Rupees Two Lakhs only) on M/s Trinity Shipping & Allied Services, a CHA firm, imposed under Section 114 of Customs Act, 1962, separate penalty of Rs.2 lakhs (Rupees Two Lakhs only) on the said appellant under Section 114AA and penalty of Rs.2 lakhs (Rupees Two Lakhs only) on Shri Saju Perumal, Director of the CHA are set aside - Appeals are disposed of

Summary

Issues:
1. Confiscation of non-Basmati rice consignment and imposition of penalties.
2. Redemption fine and penalties imposed on the appellants.
3. Justification of penalties on M/s Phonix Traders and CHA firm.
4. Separate penalties under Sections 114 and 114AA of Customs Act, 1962.

Analysis:
1. The judgment dealt with the confiscation of a consignment of non-Basmati rice and the imposition of penalties on the involved parties. The consignment was declared as Basmati rice but found to be non-Basmati rice, leading to its detention and subsequent seizure. The Commissioner adjudicated the case, confiscating the rice and imposing penalties on M/s Phonix Traders and individuals associated with the CHA firm.

2. The appellants challenged the redemption fine and penalties imposed on them. The advocate for the appellants acknowledged the misdeclaration of rice but argued for a reduction in the redemption fine. The Tribunal found no merit in the plea for reduction, noting the lack of evidence supporting the claim of unintentional mix-up and emphasizing the repeated nature of such cases, indicating intentional actions by exporters.

3. Regarding the penalties on M/s Phonix Traders, the Tribunal upheld the penalty under Section 114 of the Customs Act, 1962, as the traders attempted to export prohibited goods. However, the separate penalty under Section 114AA for false declarations was set aside, deeming it unjustifiable. Similarly, a penalty on an individual associated with the traders was also set aside due to the already imposed penalty on the partnership firm.

4. The judgment addressed the penalties on the CHA firm, noting the familial relationship between individuals of the exporting firm and the CHA. While upholding the penalty under Section 114, the Tribunal set aside the separate penalty under Section 114AA, aligning with the decision on M/s Phonix Traders. The imposition of penalties on the Director of the CHA was also deemed unjustified, leading to the setting aside of the penalties under Section 114AA and penalties on the individual director.

In conclusion, all the appeals were disposed of based on the above analysis, affirming some penalties while setting aside others to ensure fairness and justice in the adjudication of the case.