2017 (7) TMI 6 - AT - Customs

Penalty u/s 114(i) and 114(AA) of the Customs Act - export of prohibited item - non Basmati Rice - Held that - the impugned order imposing the penalty on the appellants in view of the fact that they have exported non-basmati rice and wheat atta in violation of the notification banning the export of the same, is upheld - the Apex Court in the case of M/s. Kunal Travel (Cargo) Vs. CC & CE, Noida 2017 (4) TMI 880 - SUPREME COURT has also justified the imposition of penalty in the similar fact situation - appeal dismissed - decided against appellant.

Summary

Issues:
- Appellants challenging penalty imposition
- Allegations of exporting prohibited items
- Mis-declaration of goods
- Justification for penalty imposition

Analysis:
The appeal involved two cases against orders passed by the Commissioner of Customs (Appeals) related to the export of non-basmati rice and wheat atta misdeclared as other items. The issue in both appeals was common, leading to a combined judgment. The investigation stemmed from intelligence suggesting prohibited exports by misrepresentation and misuse of facilities. The search at the office premises revealed incriminating documents, prompting a show-cause notice under the Customs Act, 1962. Subsequently, penalties were imposed on the firm and individuals, leading to the appeals.

The adjudicating authority imposed penalties on the appellants for contravening export regulations by exporting non-basmati rice in violation of the ban. The appellants admitted to the violations but justified their actions based on alleged coercion by buyers and a belief in the ban being temporary. The defense argued that the exports did not result in revenue loss, and full transaction details were disclosed. However, the Revenue defended the penalty imposition, citing the admitted misdeclaration and violation of the export ban. The defense also highlighted the penalties not being excessive, referencing legal precedents.

After considering the arguments, the Judicial Member upheld the penalty imposition, finding no fault in the impugned order. The judgment referenced the decision of the Hon'ble Allahabad High Court in a similar case, supporting penalty imposition in comparable circumstances. Citing the Supreme Court's dismissal of a related appeal, the judgment concluded by dismissing both appeals, affirming the penalty imposition. The decision was pronounced in open court on 27/06/2017.