2014 (11) TMI 566 - AT - Customs

Confiscation of goods - Redemption fine - Misdeclaration of goods - Held that - Record reveals that in the guise of Basmati rice, attempt was made to export non Basmati rice adopting questionable modus operandi. Actually 6 containers were attempted to be cleared. Containers were stuffed in such way that front row contained Basmati rice and second row contained non-Basmati rice. First row was used to camouflage the inferior goods rows. Samples were tested which proved intention of appellants to deceive revenge. Misdeclaration came to record. Test Results indicated that consignments were non basmati rice export of which is prohibited by DGFT Notification No. 55/(RE-2008)/2004-2009 as amended. Test results showed exported goods were non-basmati rice. That demolishes the defense plea of mixing of consignments and non basmati rice were wrongly loaded in the containers. Test reports confirmed that representative samples did not conform to the requirement of average length & length/breadth ratio as prescribed by the DGFT Notification and were contrary to the specifications of rice declared by the appellants failing to meet the specifications of Basmati rice as per the Agmark specification. Findings of the Commissioner relating to confiscation of the goods and imposition of redemption fine of ₹ 15 lakhs. In the facts and circumstance is justified when questionable modus operandi remained un-explained. Intentional misdeclaration does not deserve leniency. Therefore redemption fine imposed in adjudication remains untouched. Conduct of appellants show that they were consciously involved in the export of non basmati rice following dubious method to defraud the Revenue. Therefore imposition of penalty on the exporter does not call for interference for which entire penalty is confirmed. - Decided against assessee.

Summary

Issues: Attempted export of non-Basmati rice in the guise of Basmati rice, Confiscation of goods, Imposition of redemption fine, Imposition of penalties

The judgment pertains to an appeal against an Order-in-Original by the Commissioner, Customs & Central Excise, Noida, involving the attempted export of non-Basmati rice in the guise of Basmati rice. The goods, weighing 145.500 MT, were seized under the Customs Act, 1962, with an option to redeem them on payment of a fine. Additionally, penalties were imposed on the appellant and a partner for misdeclaration. The issue revolved around the misdeclaration of non-Basmati rice as Basmati rice for export, which was prohibited under a notification by the Director General of Foreign Trade.

The facts revealed that the appellant attempted to export poor quality non-Basmati rice disguised as Basmati rice in containers. Samples were tested, showing non-conformity to Basmati rice specifications. The appellant's partner admitted to the misrepresentation, claiming a mix-up by the supplier. However, investigations indicated deliberate concealment of non-Basmati rice behind Basmati rice bags. The misdeclaration was further evidenced by the deliberate stacking of containers to hide the inferior goods.

The judgment highlighted the intentional deception by the appellants in attempting to export non-Basmati rice, violating the prohibition on such exports. The test results confirmed the misdeclaration and non-conformity to Basmati rice specifications. The Commissioner's decision to confiscate the goods and impose a redemption fine of Rs. 15 lakhs was upheld due to the unexplained questionable modus operandi and intentional misdeclaration.

Regarding penalties, it was established that both the appellant and the partner were consciously involved in the export scheme to defraud revenue. The partner's claim of a supplier mix-up was deemed unfounded, given the deliberate concealment and stacking of non-Basmati rice. Consequently, the penalties imposed on both the appellant and the partner were upheld for their active involvement in the attempt to export prohibited rice.

In conclusion, the appeals were dismissed, affirming the decisions on confiscation, redemption fine, and penalties, based on the deliberate misdeclaration and attempted export of non-Basmati rice in violation of the law.

Judges: Mr. D.N. Panda and Mr. Manmohan Singh, JJ.