2009 (9) TMI 426 - AT - Customs

Re-export-Confiscated goods- Foreign Exporter seeking re-export of such goods from India. Goods under import liable to confiscation on account of misdeclaration. Supreme Court in 2003(155) E.L.T. 417(S.C.) held in similar situation that re-export. Where goods imported are liable to confiscation, such goods cannot be allowed re-export and bona fide of exporter not relevant. Impugned order containing finding on collusion of appellant with importer in evading duty and several consignments fraudulently imported before. Held that- impugned order rejecting request for re-export sustainable.

Summary

Issues:
1. Mis-declaration of imported goods under the Duty Free Replacement Certificate (DFRC) scheme.
2. Request for re-export of confiscated goods.
3. Applicability of precedent cases on re-export of goods.
4. Allegations of collusion between importer and supplier.

Analysis:

Issue 1: Mis-declaration of imported goods under the DFRC scheme
The case involved the mis-declaration of goods by the importer, who claimed duty-free import under the DFRC scheme for 'Textile pieces of goods dyed cotton processed fabrics' but imported 'cotton corduroy fabrics'. The Commissioner of Customs found mis-declaration, under-declaration of quantity, and contravention of import prohibition. The importer was found to have similarly mis-declared goods in the past, leading to inadmissible duty exemptions. The Commissioner imposed penalties, fines, and demanded differential duty along with interest.

Issue 2: Request for re-export of confiscated goods
The appellant, a foreign exporter, sought permission for re-export of the confiscated goods, claiming the mis-declaration was due to an oversight. They offered to re-export or sell the goods at a discount but were denied permission by the Commissioner and subsequent appeals. The Tribunal upheld the denial, citing the goods' liability for confiscation under Section 111(m) of the Customs Act due to mis-declaration.

Issue 3: Applicability of precedent cases on re-export of goods
The Tribunal analyzed precedent cases such as Grand Prime Ltd. and Al-Futtaim Engineering to determine the legality of re-export. It was noted that where goods are liable for confiscation under Section 111 of the Act, re-export cannot be permitted. The Tribunal emphasized that the bona fide of the exporter was not material in such cases, and collusion between importer and supplier could lead to denial of re-export.

Issue 4: Allegations of collusion between importer and supplier
The Commissioner found evidence of collusion between the importer and supplier in facilitating duty evasion, as multiple consignments had been imported using the same modus operandi. While refraining from imposing penalties, the Commissioner warned the supplier. The Tribunal upheld the Commissioner's decision to deny re-export based on the collusion findings and the goods' liability for confiscation.

In conclusion, the Tribunal rejected the appeal for re-export, upholding the Commissioner's decision based on mis-declaration, confiscation liability, and collusion between the importer and supplier. The case serves as a precedent highlighting the importance of accurate declaration in import transactions and the consequences of collusion in customs duty evasion.