1998 (5) TMI 78 - AT - Customs

Summary

Issues:
1. Confiscation of goods illegally exported from Bombay to South Africa.
2. Misdeclaration of goods being exported to Maputo, Mozambique.
3. Allegations of diversion of goods to South Africa through false declarations.
4. Confiscation, redemption, and penalty imposed under Section 114 of the Customs Act, 1962.
5. Nexus between shipper, agent, and destination of goods.
6. Disposal of perishable goods without notice to the appellants.

Issue 1: Confiscation of goods illegally exported from Bombay to South Africa
The appeal arose from an order-in-original by the Collector of Customs confiscating goods illegally exported from Bombay to South Africa on ships belonging to M/s. Gold Star Lines, Hongkong. The Collector allowed redemption to the exporter upon payment of a fine and imposed a penalty under Section 114 of the Customs Act, 1962. The goods were found to be misdeclared as being exported to Maputo in Mozambique, but evidence indicated they were actually destined for South Africa. Various incriminating documents and statements revealed a pattern of clandestine exports to South Africa in violation of customs regulations.

Issue 2: Misdeclaration of goods being exported to Maputo, Mozambique
The appellants had misdeclared the goods as being exported to Maputo, Mozambique, while actually diverting them to South Africa. Statements from involved parties and seized documents confirmed the misdeclaration and diversion to South Africa. The appellants' attempt to export goods to a prohibited nation by falsifying destination information was a clear violation of customs regulations.

Issue 3: Allegations of diversion of goods to South Africa through false declarations
The evidence, including statements and documents, supported the allegation that the appellants diverted goods to South Africa by making false declarations and maintaining false records. The appellants' use of a dummy address in Maputo to carry out trade with South Africa was established through statements and documentary evidence. The Collector rejected the appellants' arguments against the allegations, emphasizing the intention to deceive authorities and engage in prohibited exports.

Issue 4: Confiscation, redemption, and penalty imposed under Section 114 of the Customs Act, 1962
The Collector's order of confiscation, redemption, and penalty under Section 114 of the Customs Act was upheld. The appellants were allowed redemption of the goods upon payment of a fine, while a penalty was imposed for the deliberate attempt to export goods to a prohibited nation through misdeclaration. The Collector relied on incriminating documents, statements, and the lack of a substantial defense from the appellants to support the decision.

Issue 5: Nexus between shipper, agent, and destination of goods
The appellants' admission of routing goods to Durban, South Africa, despite false declarations, established a clear nexus between the shipper, agent, and the actual destination of the goods. The evidence collected, including statements and documents, corroborated this nexus, leading to the conclusion that the appellants deliberately attempted to export goods to South Africa while misdeclaring the destination as Maputo, East Africa.

Issue 6: Disposal of perishable goods without notice to the appellants
The appellants raised concerns about the disposal of perishable goods without notice, but the Tribunal found no merit in this argument. The sale of perishable goods is governed by separate provisions, and the disposal did not affect the validity of the proceedings related to the customs violations. The appellants were given the option of redeeming the goods' value realized in auction, and the penalty imposed was deemed appropriate given the circumstances of the case.

The judgment by the Appellate Tribunal CEGAT, Madras upheld the Collector's decision regarding the confiscation, redemption, and penalty imposed on the appellants for illegally exporting goods to South Africa through misdeclarations and diversion. The evidence presented, including statements and documents, supported the allegations of deliberate attempts to violate customs regulations. The Tribunal found no grounds to overturn the Collector's order, emphasizing the appellants' admission of wrongdoing and the established nexus between the shipper, agent, and the actual destination of the goods. The disposal of perishable goods without notice was deemed lawful, and the penalty imposed was considered reasonable in light of the case's circumstances.