2014 (6) TMI 447 - AT - Customs

Penalty u/s 114 - Mis declaration of goods - export of live consignment of Muriate of Potash (MOP) of fertilizer grade - restricted goods - Held that - Prima facie, the goods attempted to be exported by live consignment and past exports were MOP as proved from CRCL Report. No evidence came to record to rebut the charge of smuggling. The offending goods were restricted as has been held by adjudicating authority. Once the goods exported or attempted to be so, in contravention of law, without obtaining permission or licence from the appropriate authority to export, all the persons involved in the stream of export shall be liable to consequence of law. The goods were confiscable under Customs Act, 1962. The goods remained to be MOP all along without being controverted by any evidence led in that behalf - The acts and omissions of the appellants caused jeopardy to public revenue, and hampered interest of the economy. Both appellants were conduits to facilitate export of MOP to unjustly enrich the exporter at the cost of Public Revenue. Therefore it is difficult to dispense with the requirement of pre-deposit when Revenue has a prima facie case and balance of convenience tilts in its favour. - stay granted partly.

Summary

Issues involved:
- Misdeclaration of goods in export
- Imposition of penalties under Customs Act, 1962
- Appeal against adjudication order
- Stay applications for penalties during appeal
- Role of CHA and 'G' card holder in attempted export of restricted goods
- Violation of customs laws and procedures
- Requirement of pre-deposit for penalties
- Consideration of evidence and submissions for stay of penalties

Analysis:

The judgment by the Appellate Tribunal CESTAT NEW DELHI dealt with the misdeclaration of goods in export, leading to the imposition of penalties under the Customs Act, 1962. The case involved an appellant company acting as a Customs House Agent (CHA) in the attempted export of restricted goods, Muriate of Potash (MOP), misdeclared as Oil Well Drilling Chemical for Industrial use. The company and its manager, a 'G' card holder, were held liable for penalties for their involvement in the export of MOP, causing a loss to revenue and the economy due to subsidized pricing for Indian farmers.

The appellants appealed against the adjudication order and filed stay applications seeking to halt the realization of the imposed penalties during the appeal process. The Tribunal found that the goods were indeed MOP, attempted to be exported without permission or license, and the appellants were abettors in the offense. The record revealed that both past and present exports were without authorization from the Directorate General of Foreign Trade (DGFT) and lacked the necessary licenses.

During the proceedings, it was established that the appellants were aware of the nature of the goods and the customs laws and procedures regarding the restricted goods. The Tribunal considered the arguments presented by both parties, with the Revenue contending that the penalties were justified due to the appellants' active involvement in the export of subsidized fertilizer meant for Indian farmers.

After hearing both sides and examining the evidence, the Tribunal concluded that the appellants' actions jeopardized public revenue and the economy by facilitating the export of MOP. Consequently, the Tribunal directed the CHA appellant to deposit Rs. 5.00 lakhs and the 'G' card holder appellant to deposit Rs. 3.00 lakhs within a specified timeline, with a stay on the realization of the balance penalties until the appeal's disposal or a specified date.

In summary, the judgment upheld the penalties imposed under the Customs Act, 1962, against the appellants for their involvement in the misdeclaration and attempted export of restricted goods, emphasizing the importance of complying with customs laws and procedures to safeguard public revenue and economic interests.