2010 (1) TMI 515 - HC - Customs

Prohibited goods - confiscation of goods and imposition of penalty - even if there is difference in weight, the goods cannot become prohibited goods - Sub-clause (3) of clause 3 of Export Trade (Control) Order refers to value, sort, specification, quality and description of the goods and not to weight of the goods Held that - difference in value could not be said to be a difference in material particulars - goods are not liable to confiscation penalty is not imposable.

Summary

Issues involved:
1. Interpretation of clause 3(3) of Export Trade Control Order regarding shortage in weight.
2. Correctness of liberal interpretation by the appellate Tribunal.
3. Legality of confiscation and penalty imposition.

Issue 1: Interpretation of clause 3(3) of Export Trade Control Order regarding shortage in weight:
The case involved a dispute over whether a shortage in weight would attract the provision of clause 3(3) of the Export Trade Control Order. The Customs officers observed a shortage in weight in goods declared for export, leading to proceedings for confiscation and penalty imposition. The Tribunal held that the clause's objective was to prevent the export of goods not in conformity with the declaration, interpreting the words broadly to include shortage in weight. However, the appellant argued that the absence of the word "weight" in the clause meant shortage in weight should not lead to prohibition or confiscation. The Tribunal reduced the penalty but referred the matter to the High Court for opinion on substantial legal questions.

Issue 2: Correctness of liberal interpretation by the appellate Tribunal:
The Tribunal's liberal interpretation of the clause to include shortage in weight as a ground for prohibition and confiscation was challenged. The appellant contended that the specific absence of the term "weight" in the clause indicated that shortage in weight should not trigger the provisions of the Export Trade Control Order. The appellant highlighted the difference between the original and amended provisions of the Customs Act to support the argument that shortage in weight should not lead to confiscation and penalty imposition.

Issue 3: Legality of confiscation and penalty imposition:
The Collector of Customs initiated proceedings for confiscation and penalty imposition based on the observed shortage in weight during export. The Commissioner of Customs ordered confiscation and imposed penalties under relevant sections of the Customs Act. The appellant challenged these actions, arguing that the absence of specific mention of weight in the relevant provisions indicated that shortage in weight should not result in confiscation or penalty. The High Court analyzed the provisions of the Export Trade Control Order and the Customs Act to determine the legality of the confiscation and penalty imposition in the context of shortage in weight.

This detailed analysis covers the interpretation of the Export Trade Control Order, the Tribunal's decision, the legal arguments presented by both parties, and the High Court's considerations regarding the confiscation and penalty imposition in the case.