2018 (3) TMI 1013 - AT - Customs

Export of goods without having the license for export - Muriate of Potash - restricted item - Held that - there is negligence on the part of the appellant because before making the shipping bill, he has neither inspected the documents nor the goods or its literature. But fact remains that the export item is a chemical item and appellant is not a chemical expert - the quantum of penalty reduced - appeal allowed in part.

Summary

Issues involved:
Appeal against Order-in-Original, Export of restricted item without license, Penalty on CHA for misdeclaration, Negligence of CHA, Reduction of penalty based on Doctrine of Equity

Analysis:
The appeal was filed against the Order-in-Original 20 of 2011, with the Supreme Court directing the Tribunal to dispose of the appeal within six months. The earlier dismissal order for non-compliance was recalled, and the appeal was heard with the consent of both parties as per the Supreme Court's direction. The case involved the export of an item misdeclared as 'industrial salt' but identified as 'Muriate of Potash' by the Agricultural Department, a restricted item for export requiring a license. The exporter attempted to export the item without the necessary license, leading to penalties and reclassification. A penalty of ?5 lakh was imposed on the CHA involved, who failed to exercise due diligence in verifying the cargo's antecedents, leading to misdeclaration and export of the restricted item.

The Commissioner's order highlighted the CHA's negligence in verifying the source of the goods and exercising due diligence. The CHA had arranged logistics support without proper verification, leading to the misdeclaration and export of the restricted item. While the appellant was found negligent, being a chemical item and not a chemical expert, the penalty imposed was considered excessive. The Tribunal modified the impugned order based on the Doctrine of Equity, reducing the penalty to ?2,00,000 to meet the ends of justice, granting relief of ?3,00,000 to the appellant. The decision partly allowed the appeal, acknowledging the negligence but adjusting the penalty amount based on equity, justice, and good conscience.

In conclusion, the Tribunal's judgment addressed the issues of misdeclaration, negligence of the CHA, and the imposition of penalties for exporting a restricted item without a license. The decision balanced the findings of negligence with the application of the Doctrine of Equity to reduce the penalty amount, ensuring fairness and justice in the outcome of the case.