2000 (10) TMI 521 - AT - Customs

Summary

Issues Involved:
1. Misdeclaration of goods and overvaluation.
2. Confiscation of goods u/s 113(d) and 113(l) of the Customs Act, 1962.
3. Imposition of penalties u/s 114 of the Customs Act, 1962.
4. Compliance with Export Policy and EXIM Policy.
5. Applicability of Foreign Trade (Development and Regulation) Act and Foreign Exchange Regulation Act.

Summary:

1. Misdeclaration of Goods and Overvaluation:
The appellants, M/s. Sujana Industries Ltd., were accused of misdeclaring the description and value of exported goods. The goods were declared as "M.S. Sections" but were found to be cut pieces of ingots, valued at less than the declared US $1065/MT. The Commissioner of Customs concluded that the goods were overvalued and misdeclared.

2. Confiscation of Goods u/s 113(d) and 113(l) of the Customs Act, 1962:
The Commissioner ordered the confiscation of goods u/s 113(d) and 113(l) of the Customs Act, 1962, read with para 3(3) of the Export (Control) Order, 1988. However, the Tribunal found that the Export (Control) Order, 1988 had been repealed and superseded, making the confiscation order unsustainable.

3. Imposition of Penalties u/s 114 of the Customs Act, 1962:
Penalties were imposed on the appellants and their directors/employees u/s 114 of the Customs Act, 1962. The Tribunal, however, found no reason to uphold these penalties as the goods were not found to be prohibited or dutiable under the EXIM Policy and related laws.

4. Compliance with Export Policy and EXIM Policy:
The Tribunal noted that the exports were made under a valid Advance Licence issued by the DGFT, which had verified the declared values and costs. The Tribunal found no reason to question the DGFT's authority or the validity of the licence, and thus, the Customs authorities could not impinge on the DGFT's jurisdiction.

5. Applicability of Foreign Trade (Development and Regulation) Act and Foreign Exchange Regulation Act:
The Tribunal referred to the Larger Bench decision in the case of M/s. J.G. Exports & Others, which held that over-invoicing did not amount to a violation of Section 18(1)(a) of the FERA, 1973, and thus, there was no deemed violation of Section 11 of the Customs Act, 1962. Consequently, the goods were not liable for confiscation under Section 113(d) of the Customs Act.

Conclusion:
The Tribunal set aside the impugned order, finding no valid grounds for confiscation of goods or imposition of penalties. The appeals were allowed, and the Tribunal emphasized that the declared FOB values should be accepted as genuine unless proven otherwise with material evidence.