2008 (2) TMI 198 - AT - Customs

Respondents knowingly misdeclared the goods in the shipping bills in question & thus contravened the provisions of Sec. 50(2), therefore, the goods are liable to confiscation - since the impugned goods have been exported out of the country and are not available for confiscation, no redemption fine is imposable since no financial gain derived & there is no FERA violation, we are of the view that the denial of DEPB credit is adequate punishment, hence, it is not just to impose further penalty

Summary

Issues:
1. Misdeclaration of goods in export shipping bills.
2. Alleged violations of various trade and customs regulations.
3. Confiscation of goods and imposition of penalties.

Analysis:

Issue 1: Misdeclaration of goods in export shipping bills
The case involved 16 consignments exported to Turkey under the DEPB Scheme, where goods declared as 'Frozen Tuna Fish' were found to be 'Buffalo Meat'. The misdeclaration was admitted by the Director of the exporting company, citing instructions from the foreign buyer. The misdeclaration was done to please the buyer and secure a large order, with no financial gain intended by the exporters.

Issue 2: Alleged violations of trade and customs regulations
The Revenue issued a Show Cause Notice alleging violations of various regulations, including Section 11 of the Foreign Trade Act and Customs Act. The Commissioner concluded that the misdeclaration did not attract confiscation under Section 113(i) of the Customs Act as no financial gain was derived. The Commissioner refrained from imposing penalties, except denying DEPB credit claimed by the exporters. However, the Revenue contended that the misdeclared goods were prohibited for export and should be liable for confiscation and penalties.

Issue 3: Confiscation of goods and imposition of penalties
The Revenue argued that the misdeclared goods were prohibited for export and should be liable for confiscation under Section 113(i) of the Customs Act, with penalties under Section 114. The Respondents argued against confiscation, citing no financial gain or violation of FERA, and pointed out their track record as exporters. The Tribunal held that although misdeclaration occurred, the goods had already been exported and were not available for confiscation. The denial of DEPB credit was deemed sufficient punishment, and no further penalties were imposed on the Respondents.

In conclusion, the Tribunal upheld the Commissioner's decision, refraining from imposing additional penalties on the Respondents. The appeals filed by the Revenue were disposed of accordingly.