2001 (8) TMI 602 - AT - Customs

Summary

Issues:
1. Contravention of Rule 11 of the Foreign Trade (Regulation) Rules, 1993 and penalty imposition.
2. Applicability of Section 113(d) of the Act on goods for export.
3. Interpretation of Section 11 of the Foreign Trade (Development and Regulation) Act.
4. Confiscation of goods under sub-section (5) of Section 11.
5. Adjudication authority for confiscation of goods.
6. Application of Section 113(i) to goods claimed for drawback.
7. Reference to previous tribunal decisions.
8. Validity of the Commissioner's order.

Analysis:

1. The appellant exported fabrics with discrepancies in the declared composition of yarns, leading to a contravention of Rule 11 of the Foreign Trade (Regulation) Rules, 1993. The Commissioner found the goods liable for penalty under Section 11(5) of the Foreign Trade (Development and Regulation) Act, 1992, and confiscation under Section 113(d) due to false declarations, imposing fines and penalties.

2. The appellant argued that since the goods were not prohibited for export and not on the negative list, Section 113(d) of the Act, applicable to prohibited goods, should not be invoked.

3. The departmental representative contended that incorrect description in the shipping bill violated Rule 11 of the Foreign Trade (Regulation) Rules, 1993, which is governed by Section 11 of the Foreign Trade (Development and Regulation) Act, applicable through the Customs Act, 1962.

4. Rule 11 of the Foreign Trade (Regulation) Rules, 1993 mandates accurate declaration of goods for export, with Section 11(5) providing for confiscation in case of contravention, to be adjudicated by specified authorities like the Director General of Foreign Trade.

5. The judgment suggests that incorrect declarations may lead to confiscation under Section 11(5), but the Commissioner of Customs lacks authority for adjudication under the 1992 Act. Merely incorrect declarations do not warrant confiscation under Section 113(d) of the Customs Act, 1962.

6. The debate on the application of Section 113(i) to goods claimed for drawback was raised, but as no written notice was issued, the objection was not pursued, indicating a discrepancy in the department's argument.

7. Reference to previous tribunal decisions like Omprakash Bhatia was made, but the specific ratios cited were found irrelevant to the present case, leading to the dismissal of the Commissioner's order.

8. Ultimately, the order of the Commissioner was deemed invalid, and the appeal was allowed, setting aside the impugned decision due to the lack of prohibition on the goods for export and the incorrect application of confiscation provisions.