2017 (1) TMI 587 - AT - Customs

Imposition of penalty u/s 114 of the Customs Act, 1962 - improper exportation of goods - GR declaration form - Held that - Regulation 4 of the Foreign Exchange (Export of Goods and Services) Regulation, 2000 lists out various exemptions from furnishing GR declarations. One of the exemptions is given under 4(g), which covers goods imported free of cost on re-export basis. From a perusal of the relevant contracts, it is seen that the goods imported and subsequently re-exported would satisfy the above condition for waiver of GR declaration given in Regulation 4 (g). Consequently, there is no requirement of filing GR-declaration in respect of the present exports - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Imposition of penalty under Section 114 of the Customs Act, 1962 for alleged improper exportation of goods.
- Requirement of filing GR declaration form at the time of export of goods.
- Challenge against penalty imposition based on exemption under Regulation 4(g) of the Foreign Exchange Management (Export of Goods and Services) Regulation 2000.

Analysis:
1. The appellant appealed against the penalty imposed under Section 114 of the Customs Act, 1962 for improper exportation of goods. The dispute arose as the Customs Authorities claimed that the appellant failed to file the GR declaration form required for export of goods under Regulation 3 of the Foreign Exchange Management (Export of Goods and Services) Regulation 2000. The Adjudicating Authority considered this failure as a contravention, leading to the penalty imposition.

2. The appellant challenged the penalty imposition, arguing that the Customs Authorities did not highlight the requirement of filing GR forms during the export process covered by various shipping bills. They contended that since the goods were imported free of cost on a re-export basis, they fell under the exemption provided in Regulation 4(g) of the Regulation 2000 Act. The appellant sought the setting aside of the penalty.

3. Upon hearing both parties, it was established that the goods in question were initially imported duty-free for organizing the broadcast of the Common Wealth Games 2010. The contract with the consortium of companies specified the import and subsequent re-export of necessary equipment without payment. The terms of the contract indicated that the goods were imported and re-exported on a no-cost basis, aligning with the exemption under Regulation 4(g) of the Regulation 2000 Act.

4. As per the analysis, the goods imported and re-exported by the appellant satisfied the conditions for waiver of GR declaration under Regulation 4(g). Therefore, there was no requirement for filing the GR declaration for the exports in question. Consequently, since there was no contravention of export provisions, the imposition of the penalty under Section 114 of the Customs Act was deemed unjustified and set aside. The appeal was allowed based on the absence of contravention of export provisions.

5. In the final decision, the penalty under Section 114 of the Customs Act was revoked, and the appeal was allowed in favor of the appellant, as there was no justification for the penalty imposition due to the compliance with the exemption under Regulation 4(g) of the Foreign Exchange Management (Export of Goods and Services) Regulation 2000.