2014 (8) TMI 79 - AT - Customs

Attempt to export of prohibited goods - Search and seizure of goods - Penalty - Knowledge of prohibited goods - Held that - Prima facie, it is difficult to conclude that the applicants were aware of the concealment of red sanders because of the wrong classification of the goods indicated in the shipping bill as per the instructions of exporter. No other material to indicate that CHA was aware of the prohibited goods in the container is on record. Therefore, at this stage, I consider it proper to waive the requirement of pre-deposit of penalties for admission of appeals. Further, there shall be stay on collection of penalty amounts during pendency of the appeals - Stay granted.

Summary

Issues:
1. Imposition of penalties on the appellants for facilitating the export of prohibited goods without evidence of their knowledge.
2. Discrepancy in the classification of goods in the shipping bill filed by the CHA firm.

Analysis:
1. The judgment deals with two stay petitions related to appeals arising from an impugned order where penalties were imposed on the appellants, the manager, and the Executive (Operations) of a CHA firm, for their alleged involvement in facilitating the export of prohibited goods. The goods, initially declared as "Indian Artistic Handicrafts," were found to contain red sander pieces/logs, prohibited for export. The appellants argued that they were not aware of the concealed goods and had acted in good faith based on the information provided by the exporter. The Tribunal noted the lack of specific evidence establishing the appellants' knowledge of the prohibited items and granted a waiver of the pre-deposit of penalties for the admission of appeals, with a stay on the collection of penalty amounts during the appeal process.

2. The second issue raised in the judgment pertains to the classification of goods in the shipping bill filed by the CHA firm. The Revenue contended that the discrepancy in the classification, indicating a category not eligible for drawback, suggested an attempt to evade customs examination. However, the Tribunal found it difficult to conclusively establish the appellants' awareness of the prohibited goods solely based on the incorrect classification in the shipping bill. The Tribunal emphasized the lack of additional evidence linking the CHA's knowledge to the concealment of prohibited goods and, therefore, decided to grant relief to the appellants by waiving the pre-deposit requirement and imposing a stay on penalty collection during the pendency of the appeals.

In conclusion, the judgment highlights the importance of establishing concrete evidence of knowledge and intent when imposing penalties for facilitating illegal activities, emphasizing the need for a thorough investigation and substantiated findings before penalizing individuals or entities involved in such cases.