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Issues involved: Challenge against confiscation of goods covered by three Shipping Bills and penalty imposed on the appellants by the Commissioner of Customs.
Analysis: 1. The appellants filed three Shipping Bills for export of dyed fabrics, declaring a value of Rs. 97,75,500 under the DEPB Scheme. The department found overvaluation and proposed confiscation of goods and a penalty. The Commissioner of Customs passed an order confiscating the goods with an option for redemption on payment of a fine and imposed a penalty of Rs. 10 lakhs. 2. The appellants argued that the goods were not liable for confiscation under Section 113 of the Customs Act as they were not prohibited goods and not entered for exportation under any claim for drawback. They relied on case law to support their claim, emphasizing that penal provisions of Section 113 are not attracted to goods not prohibited for export. 3. The Departmental Representative interpreted "prohibited" goods under Section 113 as those attempted to be exported in violation of Customs Act provisions. However, the impugned order did not find the goods in question to be prohibited for exportation. Previous case law supported the argument that where goods are not prohibited for export, Section 113 penalties do not apply. 4. The Tribunal found that the goods were eligible for export under the DEPB Scheme and could not be confiscated under Section 113(ii) for misdeclaration of particulars to claim higher drawback. The consistent view from previous cases supported the appellants' argument, leading to the decision to set aside the impugned order and allow the appeal.
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