2017 (9) TMI 760 - AT - Customs

Penalty u/s 114(i) of Customs Act, 1962 - illegal export of Ivory Idols - confiscation - penalty - Held that - It is an admitted fact that the goods i.e. ivory idols were recovered in the town and not in the customs area. The adjudicating authority has held that appellant had every reason to export the goods without any cogent and acceptable evidence - there is nothing available on record to indicate that appellant had attempted to export these goods by either moving the goods to the customs area or getting into any negotiations with some one else for attempting to sell the said goods. There is also no evidence brought on record to show that the said goods were illegally procured by the father-in-law of appellant - The fact that the goods were moved from Mysore to Hyderabad is being an admitted fact, the entire case seems to be a fall out due to some family dispute between appellant and his father in law, cannot by itself be the reason for slapping the appellant with an allegation of attempted export of antique idols. In the case of Pradeep Dhond Vs. CCE, Mumbai 2013 (2) TMI 679 - CESTAT MUMBAI , the Division Bench of the Tribunal was considering a similar issue and held that there was an attempt to export does not stand in the light of the fact that there was no communication between appellant therein and the foreign buyer, hence confiscation and penalty was set aside. Confiscation as well as penalty u/s 114 (i) set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Penalty imposed under Section 114(i) of Central Excise Act, 1962 for alleged attempt to export ivory idols without valid documents or permission.

Analysis:
The appeal challenged the penalty imposed on the appellant for allegedly attempting to export ivory idols without proper authorization. The appellant was accused of bringing ivory idols to Hyderabad for potential export or sale without valid documentation. The adjudicating authority confiscated the idols and imposed a penalty of ?10.00 lakhs under Section 114(i) of the Central Excise Act, 1962. The appellant contested the show cause notice, arguing that there was no evidence of actual attempt to export the goods. The appellant's counsel highlighted the lack of preparation or attempt for export, absence of an IEC code, and no incriminating evidence found in the appellant's possession. The counsel cited various legal precedents to support the argument that penal provisions apply only when goods are actually attempted to be improperly exported.

The Departmental Representative (DR) contended that the ivory idols were confirmed as antiques by the Archaeological Survey of India, and being made of ivory, they were prohibited goods under the Wildlife (Protection) Act, 1972. The DR emphasized the export policy regarding prohibited goods. Upon review of the submissions and evidence, it was established that the ivory idols were recovered from the appellant's residence, initially belonging to the appellant's father-in-law and brought from Mysore to Hyderabad. The idols were not found in the customs area. The adjudicating authority's conclusion of an attempt to export was deemed speculative, lacking concrete evidence of actual export preparations or negotiations. The absence of proof that the goods were illegally procured or intended for export led to the decision that the case seemed to stem from a family dispute rather than a genuine export attempt.

The Tribunal referenced legal judgments such as Mohd. Raju Hussain and Pradeep Dhond cases, which emphasized the necessity of concrete evidence of export attempts for penalties under the Customs Act, 1962. The Tribunal ruled that in the absence of such evidence, confiscation of the ivory idols and the penalty were unjustified. Citing previous decisions, the Tribunal set aside the confiscation and penalty, ultimately allowing the appeal and declaring the penalty unsustainable. The judgment was pronounced in open court on 31/08/2017.