2013 (9) TMI 464 - AT - Customs

Export of restricted Goods - UREA USP - UREA ULTRA PURE - Goods found to be restricted items as per Import Export Policy - they were not permitted for export unless license had been issued for the purpose - Held that - The release of goods were ordered on payment of redemption fine - there being already clearances allowed for the same item in the past - the assessee could had entertained a bonafide belief that there need not be any license for exporting such item. Seizure of goods u/s 113 - redemption fine u/s 125 - the first appellate authority had already set-aside the absolute confiscation of the goods and given an option to redeem the same on payment of redemption fine - the redemption fine seems to be an excessive redemption fine was reduced. Confiscation of goods - Penalty u/s 114 - the penalties were correctly imposed u/s114(i) - the act of the assessee in not providing the license for export of Urea had made such consignments liable for confiscation - The provisions of Section 114 mandate about imposition of penalty when the goods were liable for confiscation u/s113 - the penalty needs to be imposed on the assessee u/s114(i) decided partly in favour of assessee.

Summary

Issues:
1. Export of restricted items without the necessary license.
2. Confiscation of goods and imposition of penalties under the Customs Act, 1962.

Issue 1: Export of restricted items without the necessary license
The appeal was against the Order in Appeal regarding the export of laboratory chemicals, including restricted items under the Import Export Policy without the required license. The appellant had exported similar items in the past without objection. The adjudicating authority held the goods were prohibited for export and ordered absolute confiscation, imposing a penalty of Rs. Five lakhs. The first appellate authority set aside the confiscation, allowing redemption on payment of Rs. 65,000 and reduced the penalty to Rs. Two lakhs. The appellant argued the penalty was excessive, as they believed the items were allowed for export as pharmaceutical grade/API, not as fertilizer. The Additional Commissioner argued against further reduction in the penalty.

Issue 2: Confiscation of goods and imposition of penalties under the Customs Act, 1962
The Tribunal held that the goods were correctly liable for confiscation but modified the redemption fine to Rs. 40,000 for goods valued at Rs. 1,32,128. The penalties imposed under Section 114(i) of the Customs Act, 1962 were deemed appropriate due to the failure to provide the necessary export license for Urea. The Tribunal acknowledged the appellant's belief based on previous clearances but maintained a penalty of Rs. One Lakh instead of Rs. Two lakhs imposed by the first appellate authority. The impugned order was upheld with the indicated modifications.

In conclusion, the Tribunal upheld the confiscation of goods and penalties under the Customs Act, 1962, while modifying the redemption fine and penalty amount. The judgment balanced the appellant's belief with the legal requirements for exporting restricted items, emphasizing the need for compliance with licensing regulations to avoid penalties and confiscation.