2008 (3) TMI 229 - AT - Customs

Export - Confiscation of semi-finished sandal wood pieces since goods are prohibited, confiscation is justified - since the person who signed the shipping bills was duly authorized by the appellants, penalty of appellants is correct - impugned goods are still lying with the Customs custody without being sold or disposed of for long period of 14 years, lenient view is required to be taken redemption is allowed subject to that appellants would reprocess and export the goods on release

Summary

Issues:
1. Confiscation of prohibited goods for export
2. Imposition of penalties on the appellant-firm and a partner
3. Legal purchase of goods from Karnataka State Government Forest Department
4. Request for lenient consideration and redemption of confiscated goods

Analysis:
1. The issue of confiscation of prohibited goods for export was raised in the case. The appellant's representative argued that the impugned semi-finished and un-finished sandalwood pieces had been confiscated by Customs, and penalties were imposed on the appellant-firm and one of the partners. The advocate explained that the authorized signatory, responsible for the violation, was not supposed to export the goods without finishing them first in Kolkata. The Department's representative supported the confiscation, stating that the goods were prohibited and the Commissioner's actions were justified. The Tribunal found that the prohibited goods were indeed involved in export, and since the authorized signatory was appointed by the appellants, they could not be absolved from the penal consequences. Therefore, the confiscation of the sandalwood was upheld.

2. Regarding the imposition of penalties, the Tribunal considered the lengthy period during which the sandalwood remained unsold in Customs custody since its legal purchase from the Karnataka State Government Forest Department. Despite upholding the confiscation, the Tribunal decided to allow the redemption of the confiscated sandalwood valued at Rs. 64.00 lakhs on a fine of Rs. 8.00 lakhs, with a condition that the appellants reprocess and export the goods within three months of release. The penalty imposed on the appellant-firm was reduced from Rs. 5.00 lakhs to Rs. 2.00 lakhs, and no penalty was imposed on the appellant's partner due to the lack of specific involvement.

3. The case also involved the legal purchase of goods from the Karnataka State Government Forest Department. The Tribunal took into account the fact that the sandalwood was legally acquired and that the Department had failed to dispose of it for 14 years. This circumstance led to the Tribunal's decision to grant lenient consideration by allowing the redemption of the confiscated goods and reducing the penalties imposed on the appellants.

4. The appellant's request for lenient consideration and redemption of the confiscated goods was based on the argument that the impugned goods were purchased legally and had not been sold or disposed of by Customs since 1994. The Tribunal acknowledged this argument and decided to grant redemption of the confiscated sandalwood, subject to certain conditions, as a form of lenient consideration. The Tribunal's decision to allow the redemption and reduce the penalties was based on the unique circumstances of the case and the legal purchase of the goods from the Karnataka State Government Forest Department.