2013 (9) TMI 388 - AT - Customs

Misdeclaration of goods - redemption fine - Held that - The applicant had failed to make out a prima facie case for waiver of entire amount of penalty - there was no material available that the applicant had taken steps against the use of the name of the applicant s sister s address in the attempted export - adjudicating authority imposed penalty u/s 114AA for use of false and incorrect material and penalty u/s 114(i) was imposed for attempt to export the goods for which prohibition was in force. Waiver of pre deposit of penalties u/s 114(i) and 114 AA applicant ordered to submit Rs. one lakh on such submission rest of the duty to be waived decided partly in favour of applicant.

Summary

Issues: Application for waiver of predeposit of penalties under Sections 114(i) and 114 AA of the Customs Act, 1962.

Analysis:
1. Issue of Misdeclaration of Goods:
The case involved misdeclaration of goods in a Shipping Bill where industrial salt chemical grade was declared, but upon examination, it was found to be fertilizer grade potassium chloride classified as muriate of potash. This misdeclaration led to the seizure of the goods by customs authorities, resulting in confiscation and penalties being imposed on various individuals, including the applicant.

2. Legal Arguments and Submissions:
The applicant, through their counsel, argued that the applicant was wrongly implicated based on a statement by another individual involved in the export. It was highlighted that the exporter used a different address for export, which was the applicant's sister's address in Texas, even though the goods were consigned to Malaysia. The counsel contended that penalties should not be imposed based on mere presumption and emphasized the lack of relevance in using the sister's address.

3. Adjudication and Decision:
Upon reviewing the impugned order, it was noted that the goods were indeed consigned to the sister's address in Texas, as stated by the exporter. The applicant did not dispute this fact. Furthermore, the exporter's statement detailed the role of the applicant in the export process. The penalties under Section 114AA and Section 114(i) were imposed for using false material and attempting to export goods under prohibition, respectively. The tribunal found that the applicant failed to establish a prima facie case for waiving the entire penalty amount. As a result, the applicant was directed to deposit Rs. One lakh within six weeks, with the predeposit of the balance amount waived subject to compliance with the stay order.

4. Conclusion:
The judgment highlighted the importance of accurate declaration in export processes and the consequences of misrepresentation. It underscored the need for individuals involved in exports to ensure compliance with relevant regulations to avoid penalties and confiscation of goods. The decision to partially waive the penalty amount was based on the lack of a strong case for complete waiver by the applicant.