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Issues Involved:
1. Valuation of Export Goods 2. Confiscation and Redemption Fine 3. Imposition and Quantum of Penalty Valuation of Export Goods: The appellant, a merchant exporter, filed three shipping bills on 19-12-2005 for export of goods declared as "metal fitted/bonded/un-bonded rubber part - door beading" with a total FOB value of Rs. 1,40,76,720/- under the claim of DEPB worth Rs. 11,26,137/-. The Revenue conducted investigations and found that the goods were not as declared; they were of 15 length instead of the requisite 2 meters and were of much lower value. Based on market inquiries, the value was re-determined to be Rs. 11,000/-. Confiscation and Redemption Fine: The Commissioner confiscated the goods and allowed them to be redeemed on payment of a redemption fine of Rs. 5,000/-. The goods were found to be sub-standard and unfit for their declared purpose, thus justifying the confiscation. Imposition and Quantum of Penalty: The Commissioner imposed a penalty of Rs. 1,40,76,720/- u/s 114(iii) of the Customs Act. The appellant did not dispute the undervaluation but argued that the penalty was excessive. The adjudicating authority initially imposed a penalty equivalent to the declared FOB value, which was later contested. Judicial and Technical Members' Opinions: - Member (Judicial): Reduced the penalty to Rs. 11,26,137/-, equivalent to the DEPB benefit claimed, considering it sufficient given the appellant's cooperation in the investigation. - Member (Technical): Disagreed with the reduction, emphasizing the fraudulent intent and the need for a deterrent penalty. Imposed a penalty of Rs. 50,00,000/- to prevent future frauds. Final Order: Due to the difference in opinions, the matter was referred to a third member. The third member agreed with the Technical Member, emphasizing the seriousness of the fraud and the need for a deterrent penalty. The final order imposed a penalty of Rs. 50,00,000/- on the appellant.
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