2013 (12) TMI 589 - AT - Customs

Misdeclaration of Goods Goods declared as Industrial salt chemical grade but actually found as fertilizer grade potassium chloride - Waiver of pre-deposit of penalties u/s 114(i) and u/s 114 AA of the Customs Act, 1962 Assessee contended that the goods were consigned to the address of the applicant s sister - Held that - There is no material available that the applicant has taken steps against the use of the name of the applicant s sister s address in the attempted export- Penalty was imposed under Section 114AA for use of false and incorrect material and penalty under Section 114(i) was imposed for attempt to export the goods for which prohibition is in force under the Customs Act - the applicant has failed to make out a prima facie case for waiver of amount of penalty - the applicant directed to deposit Rs. One lakh as pre-deposit upon such submission rest of the amount to be stayed till the disposal partial stay granted.

Summary

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

Analysis:
The applicant sought waiver of penalties of Rs. 2 lakhs and Rs. 1 lakh imposed under Sections 114(i) and 114AA of the Customs Act, 1962. The case involved the misdeclaration of goods in a Shipping Bill by M/s. Sharmi Exim Co., where industrial salt chemical grade was declared, but the goods were actually fertilizer grade potassium chloride. Customs authorities seized the goods, and penalties were imposed on various individuals, including the applicant. The applicant argued that he was wrongly implicated based on a statement by the exporter, L. Subash, who used false addresses in the export documentation. The adjudicating authority imposed penalties under Section 114AA for false material and under Section 114(i) for attempting to export prohibited goods.

Upon reviewing the impugned order, it was noted that the goods were consigned to an address belonging to the applicant's sister, which was not disputed by the applicant. L. Subash's statement implicated the applicant, and there was no evidence that the applicant took steps to prevent the misuse of his sister's address in the export process. The penalties were imposed based on the false material used and the attempt to export prohibited goods. The Tribunal found that the applicant failed to establish a prima facie case for the waiver of the entire penalty amount. Consequently, the applicant was directed to deposit Rs. One lakh within six weeks and report compliance by a specified date. However, subject to compliance with the stay order, the predeposit of the remaining penalty amount was waived, and recovery was stayed pending the appeal's disposal.

This judgment highlights the importance of accurate declaration in export documentation, the consequences of using false information, and the burden of proof in seeking waiver of penalties under the Customs Act, 1962. The decision underscores the need for individuals involved in export activities to ensure compliance with legal requirements and take responsibility for the accuracy of information provided in export transactions.