2013 (11) TMI 890 - AT - Customs

Confiscation of goods - Over valuation of goods - Imposition of redemption fine and penalties - Held that - there was over-valuation of the consignment of silk waste and semi-processed silk material which was sought to be exported. We agree with the findings recorded by the adjudicating authority that such goods are liable for confiscation under the provisions of Section 113 - redemption fine imposed by the adjudicating authority in lieu of such confiscation is also correct as the goods were cleared for export by the lower authorities on execution of bond and bank guarantee as per the direction of their lordships in Civil Petition - no reason to interfere in such a reasoned order for confiscation of such goods and hence uphold that portion of the order and reject the appeal to that extent. Appellant M/s Western Silks has filed the shipping bills and documents, wherein it has been conclusively held that the said goods were over-valued, we are of the view that the appellant M/s Western Silks is correctly penalized under Section 114 of Customs Act, 1962 - goods which were seized, were allowed to be exported and the consideration for such export has already been received in advance, the penalty imposed on M/s Western Silks seems to be excessive in this case and dis-proportionate - ends of justice will be met if the penalty imposed on M/s Western Silks, Ahmedabad is reduced - there is no dispute as to the fact that he is a proprietor of M/s Western Silks. It is settled law that proprietor and the firm are not independent of each other and hence having upheld the penalty imposed on M/s Western Silks, we are of the considered view that penalty imposed on the proprietor is unsustainable and needs to be set aside - Decided partly in favour of assessee.

Summary

Issues:
Appeal against Order-in-Original involving confiscation of goods, penalties under Section 114 of Customs Act, 1962, over-valuation charges, liability for confiscation, excessive penalties, and individual penalty on the proprietor.

Analysis:
The judgment involves two appeals against Order-in-Original No.8/Commr./OA/2006, where one appellant is unrepresented and the appeal is dismissed for non-prosecution. The second appeal pertains to M/s Western Silks and Shri Suraj Karan Baradia. The case revolves around confiscation of goods for over-valuation during export, imposition of penalties under Section 114 of Customs Act, 1962, and a redemption fine. The appellant contests the penalties, arguing no revenue loss due to over-valuation and challenging the penalty imposition on both the firm and the proprietor. The Departmental Representative supports the findings of deliberate suppression of value and justifies the confiscation and penalties.

The Tribunal notes that the goods were indeed over-valued, as admitted by the proprietor. The adjudicating authority's findings reveal the proprietor's involvement in the over-valuation scheme orchestrated by another individual. The Tribunal upholds the confiscation under Section 113 of Customs Act, 1962, as the goods were cleared for export based on bond and bank guarantee directions. Consequently, the redemption fine is deemed valid. The penalty on M/s Western Silks is upheld due to conclusive evidence of over-valuation, but the excessive penalty amount is reduced from Rs.13.40 lakhs to Rs.3 lakhs, considering the goods were exported and payment received in advance. However, the penalty on the proprietor is deemed unsustainable and set aside, given the interdependence of the firm and the proprietor under the law.

In conclusion, the Tribunal dismisses one appeal for non-prosecution and partially upholds the second appeal by affirming the confiscation and reducing the penalty on M/s Western Silks while setting aside the penalty on the proprietor. The judgment was pronounced on 17.09.2013 by the Appellate Tribunal CESTAT AHMEDABAD.