2001 (7) TMI 607 - AT - Customs

Issues Involved:
1. Misdeclaration of goods under Shipping Bill No. 1367.
2. Confiscation of goods under multiple shipping bills.
3. Penalty imposition on the exporter.
4. Penalty imposition on the Custom House Agent.
5. Export obligation discharge under DEEC Scheme.
6. Drawback claims subsequent to cancellation of advance licence.

Detailed Analysis:

1. Misdeclaration of Goods under Shipping Bill No. 1367:
The Commissioner found a clear-cut misdeclaration of the weight and material of make in Shipping Bill No. 1367, dated 16-10-1995. The declared weight was 6960 kgs, but the actual weight was found to be 3386 kgs. This discrepancy led to the confiscation of goods valued at Rs. 4,57,066/- under Section 113(i) read with Section 50(2) of the Customs Act, 1962, and Section 113(d) read with Sections 18(1)(a) and 67 of the Foreign Exchange Regulation Act, 1973, and Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. The Commissioner imposed a penalty of Rs. 22,000/- under Section 114(i) of the Customs Act, 1962. The appellants argued that the misdeclaration was due to inadvertence and not intentional, but the Commissioner rejected this plea, noting that the misdeclaration was intentional to obtain undue duty-free import benefits.

2. Confiscation of Goods under Multiple Shipping Bills:
The Commissioner also held that goods under several other shipping bills were liable for confiscation due to similar misdeclarations. These goods, valued at Rs. 30,18,009/-, were found to be in violation of Section 113(i) read with Section 50(2) of the Customs Act, 1962, and Section 113(d) read with Sections 18(1)(a) and 67 of the Foreign Exchange Regulation Act, 1973, and Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. Although the goods were not physically available for confiscation, the Commissioner imposed a penalty of Rs. 3,50,000/- on the exporter for these consignments.

3. Penalty Imposition on the Exporter:
The Commissioner imposed penalties on the exporter for misdeclaration of goods, which were found to be intentional and aimed at obtaining undue duty-free import benefits. The appellants argued that the penalties were excessive and that the misdeclaration was due to inadvertence. However, the Commissioner found that the appellants had a clear intention to misdeclare the goods to gain more duty-free import benefits. The Tribunal upheld the penalties, noting that the misdeclaration was not minor or bona fide and that the goods were tainted and liable for confiscation.

4. Penalty Imposition on the Custom House Agent:
The Commissioner initially did not impose a penalty on M/s. P.S.T.S. & Sons Pvt. Ltd., the Custom House Agent. However, the show cause notice had indicated that the agent was liable for penalty under Section 114(i) of the Customs Act, 1962, read with Section 147 of the Customs Act, 1962, for conniving with the exporter in the misdeclaration. The Tribunal did not specifically address this issue in the final judgment, focusing instead on the penalties imposed on the exporter.

5. Export Obligation Discharge under DEEC Scheme:
The Commissioner held that all the consignments would not count towards the discharge of any export obligation under the DEEC Scheme due to the misdeclaration. The appellants argued that they had surrendered the advance licence and DEEC Book after the misdeclaration was detected, showing their bona fides. However, the Commissioner found that the surrender of the licence was a preventive measure to escape the consequences of the misdeclaration, and the Tribunal upheld this finding.

6. Drawback Claims Subsequent to Cancellation of Advance Licence:
The Commissioner directed that the drawback claims preferred by the exporters subsequent to the cancellation of the advance licence under the DEEC Scheme be dealt with by the Department on merits. The Tribunal did not specifically address this issue in the final judgment, focusing instead on the penalties and confiscation orders.

Conclusion:
The Tribunal upheld the Commissioner's findings and orders, confirming the confiscation of goods and the imposition of penalties on the exporter. The Tribunal found no merit in the appellants' arguments that the misdeclaration was due to inadvertence and that the penalties were excessive. The judgment emphasized that once goods are tainted and liable for confiscation, the imposition of redemption fine and penalties is justified. The appeals were dismissed, and the impugned order was confirmed.

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