2017 (5) TMI 269 - AT - Customs

Misdeclaration of export goods - whether main appellant has mis-declared the goods for export, rendering them liable for confiscation, hence to be penalised and redemption fine to be imposed; another appellant-CHA is to be penalised for violation of Customs Act or otherwise? Held that - there is no dispute that there was mis match of the description given on the packages and the documents. It is also undisputed that the goods were found of standard quality of drug intermediate and were not prohibited goods. It is also undisputed that on provisional release of the seized goods, the same were exported at the same value - there was negligence and carelessness on the part of main appellant and the CHA which has rendered the goods liable for confiscation. The redemption fine and penalty imposed are excessive on the face of the fact there was exportation of the same goods at the same value at a latter stage and undisputedly not questioned - Accordingly holding that goods are liable for confiscation, the redemption fine imposed is reduced to Rupees one lakh and consequent penalty to ₹ 50,000/- on the main appellant. As regards penalty imposed on the CHA, the same is u/s 114 of Customs Act - there is no act, omission or commission on the part of CHA which would have rendered the goods liable for confiscation as the goods may have been presented as they were received along with ARE-1 from the factory - penalty set aside. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues: Mis-declaration of goods for export, confiscation, penalties, redemption fine

Mis-declaration of Goods for Export:
The main issue in this case revolved around whether the main appellant had mis-declared the goods for export, leading to potential confiscation and penalties. The Tribunal examined the discrepancy between the description, marks, and documentation of the goods filed for export against the actual physical goods found during examination. The goods were suspected to be narcotic/psychotropic substances, leading to their seizure. Subsequent analysis revealed that the goods were standard quality intermediates, not prohibited substances. The main appellant denied the allegations, citing genuine human error in labeling and errors on the part of the Customs House Agent (CHA). The adjudicating authority found mis-declaration, leading to confiscation of goods and imposition of penalties.

Confiscation and Penalties:
The Tribunal considered the findings of the adjudicating authority, which concluded that there was negligence and carelessness on the part of the main appellant and the CHA, rendering the goods liable for confiscation. The order determined the revised value of the goods exported and imposed redemption fines and penalties. However, it was noted that the goods were eventually re-exported at the same value after provisional release, indicating no actual loss to the revenue. The Tribunal found the redemption fine and penalties excessive given the subsequent correct exportation of the goods and reduced them significantly. The penalty imposed on the CHA was set aside as there was no evidence of wrongdoing on their part.

Judicial Review and Disposition:
The case underwent multiple stages of review, including an appeal to the High Court, which remanded the matter back to the Tribunal for fresh consideration. The Tribunal, after thorough examination of the facts and submissions, upheld the mis-declaration but adjusted the penalties and redemption fine considering the subsequent correct exportation of the goods. The final order disposed of the appeals by modifying the penalties and fines imposed on the main appellant and setting aside the penalty on the CHA based on the lack of evidence implicating them in the mis-declaration.

This detailed analysis of the judgment highlights the key legal issues of mis-declaration, confiscation, penalties, and the subsequent judicial review and disposition of the case.