2016 (12) TMI 1024 - AT - Customs

Imposition of penalty u/s 114 (i) & Sec 114 AA of the Customs Act 1962 - Whether feathers used in the making of silk fabrics, being exported by the appellant, are prohibited Ostrich feathers as per CITES? - certificate of origin - Held that - Ostrich is a flightless bird of African origin & all the countries specified above in CITES are African countries. If the imported feather were of imitation nature or of non African origin then supplier of the feathers was required to produce a certificate from the appropriate authorities in Spain that the same were of non prohibited nature, to honour international convention on protection of wild flora & fauna. As a signatory to CITES it is the duty of member countries to be strict while dealing with endangered plant & animal species. In the absence of any certificate of origin from the an appropriate authority it can not be said that feathers used in the silk fabrics were from non prohibited area. Export of consignment valued at ₹ 1,51,303/- has thus been correctly confiscated. Imposition of penalty - Held that - it is observed that appellant did not play any role when the consignment of feathers was imported & received. The consignment of imported feathers processed through courier Agency was never got cleared by the Appellant - Ostrich feathers are not a prohibited item under wildlife (Protection) Act 1972 - penalty set aside. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues Involved:
(i) Whether feathers used in the making of silk fabrics, being exported by the appellant, are prohibited Ostrich feathers as per CITES?
(ii) Whether appellant is liable for penalty under Sec 114 (i) & Sec 114 AA of the Customs Act 1962.

Analysis:

Issue (i):
The appellant received a consignment of 'Imitation Ostrich Bird Feathers' from Spain, described as such in the invoice. The feathers were subject to the Convention on International Trade in Endangered Species of Wild Fauna & Flora (CITES). The CESTAT observed that Ostrich feathers from specific African countries are prohibited under CITES. As the feathers were imported without a certificate of origin proving they were not from prohibited areas, the confiscation of the consignment was upheld. The appellant's argument that they were not aware of the prohibition was dismissed, and the appeal on this issue was rejected.

Issue (ii):
Regarding the imposition of penalties under Sec 114 (i) & Sec 114 AA of the Customs Act 1962, the CESTAT noted that the appellant did not participate in the import clearance process of the feathers. The documents received indicated the feathers were imitation ostrich bird feathers, and there was no evidence of the appellant's knowledge of their prohibited nature. Referring to a judgment by the Calcutta High Court, it was emphasized that penal provisions must be strictly construed. As there was no proof that the appellant knowingly dealt with prohibited goods, the penalties imposed were deemed unjustified and set aside. The appeal on this issue was allowed, and penalties were waived.

In conclusion, the CESTAT ruled in favor of the appellant on the issue of penalties but upheld the confiscation of the consignment due to the use of prohibited Ostrich feathers in the exported silk fabrics.