9911796707
TMI Blog2001 (7) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of export or alternatively for home consumption on payment of a fine of Rs. 1,10,000/- (Rupees one lakh and ten thousand only). I also imposed a penalty of Rs. 22,000/- (Rupees twenty two thousand only) under Section 114(i) of Customs Act, 1962 on the exporter in respect of Shipping Bill No. 1367, dated 16-10-1995. I hold the goods under cover of Shipping Bill Nos. 3293/31-7-1995, 3294/31-7-1995, 758/9-8-1995, 759/9-8-1995, 1861/21-8-1995, 879/11-9-1995, 2387/27-9-1995, 385/6-10-1995, 386/6-10-1995, 710/10-10-1995, 2246/20-10-1995 and 316/4-11-1995 totally valued at Rs. 30,18,009/- (FOB) as liable for confiscation under Section 113(i) of Customs Act, 1962 read with Section 50(2) of Customs Act, 1962 and also under Section 113(d) of Customs Act, 1962 read with Sections 18(1)(a) and 67 of Foreign Exchange Regulation Act, 1973 as also read with Section 3(3) of Foreign Trade (Development and Regulation) Act, 1992. I, however, note that the above offending goods in respect of which the exporters succeeded in their attempt of export are not physically available for confiscation and as such as I take into account this aspect also while imposing penalty and I impose a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foreign trade (Development and Regulation) Act, 1992, no person shall employ any corrupt and fraudulent practice for the purpose of obtaining any licence or importing or exporting any goods. In the instant case there is a clear-cut and deliberate attempt on the part of the exporter/Advance Licence applicant to manipulate the Shipping Bills for duty free import benefit of polypropylene granules under Advance Licence to be issued under DEEC Scheme on completion of Export obligation. Therefore, all the exports made by the exporter manipulating the description of goods as "Articles made of Polypropylene" will not qualify for discharge of Export obligation, as per para 49 of EXIM policy which is deemed to have been issued under Section 5 of Foreign Trade (Development and Regulation) Act, 1992 and which stipulates that, it is obligatory on the part of the Advance Licence applicant to achieve both quantity and value and as per para 59 of the said policy the responsibility to fulfil the export obligation lies solely on the applicant exporter, and in this case the exporter has attempted to discharge Export obligation by exporting entirely a different item misdeclaring the goods. Consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligation for violation of Section 50(2) of Customs Act, 1962 read with Rules 11 and 14(2) of Foreign Trade (Regulation) Rules, 1993 issued under Section 19 of Foreign Trade (Development and Regulation) Act, 1992 and also Sections 18 and 67 of Foreign Exchange Regulation Act, 1973 and further as to why they should not be held liable for confiscation under Section 113(d) and 113(i) of Customs Act, 1962 also read with Section 3(3) of Foreign Trade (Development and Regulation) Act, 1992 for the arforesaid violation. (iii) Why penalty should not be imposed on M/s. M.M. Exports, who have resorted to misdeclaration in value, material of manufacture and also sought to export more quantity than even what was applied for under the Advance Licence application with an intention to obtain excessive benefits by resorting to misdeclaration in weight and material of make, in addition under Section 114(i) of Customs Act, 1962. (iv) Why penalty should not be imposed on M/s. P.S.T.S. & Sons, who connived with M/s. M.M. Exports in the misdeclaration of value, material of manufacture, and also sought to export more quantity than even what was applied for under the Advance Licence application with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y are charged with an offence of seeking to obtain undue import duty benefit. He has noted in page-21 of his order after quoting the para-49 of the Advance Licence that "on the one hand, this looks paradoxical while on the other, a plausible inference could be drawn that the likely inflation of import price of input in the advance licence application for obtaining a VBAL for a like value is to seek the benefit of additional gains by way of flexibility admissible to VBAL in terms of para 49. 5. He has further observed in his order impugned as follows :- The above trend of over-valuation of import item in VABAL application for obtaining excess gains by way of entitlement to import both sensitive and non-sensitive items in terms of flexibility criteria has already been cautioned vide public notice No. 106/96, dated 18-6-1996 of Mumbai Custom House, a relevant extract of which is reproduced below :- "(1) Attention of all importers/exporters/Custom House Agents and all other concerned is invited to the provisions of para 109 D and para 110 of the Policy (Volume-I) and the ALC Circular 3/95 which requires that the total CIF value of the Value Based Advance Licence is to be determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f issue of the licence shall be applicable. The conversion of duty free shipping bills to drawback shipping bills may also be permitted by the Customs authorities in case the application is rejected or modified by the licensing authority. The exports/supplies made in anticipation of the grant of a duty free licence shall be entirely on the risk and responsibility of the exporter". The exporters in this case preferred an application dated 21-6-1995 for a VBAL in relation to their export of articles made of polypropylene seeking duty free import entitlement of polypropylene as per input-output norms. The application was made specifically for polypropylene and not for HDPE. The exporters had in fact indicated polypropylene conspicuously in their application scoring out HDPE originally seen to have been typed. When the facts of excess declaration in weight of goods under attempt of export and the test results revealing the material of manufacture of the goods as HDPE in lieu of polypropylene declared in the documents came to light, the exporters vide their letter dated 26-3-1996 surrendered their advance licence No. 04008438, dated 31-1-1996 along with DEEC Book Part-I and II and got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the exporters. It has already been pointed out that owing to a misdeclaration of weight and material of make of the goods attempted to be exported under Shipping Bill No. 1367, dated 16-10-1995 alone, there arises an undue import duty-free benefit of Rs. 4,46,421/-. This is apart from such undue benefits in respect of their past and a few subsequent exports. The mistake in declaration in this case is not at all to be deemed minor and bona fide. Moreover, Rule 11 of Foreign Trade (Regulation) Rules, 1993 stipulates that the owner of the goods under exportation shall state the value, quality and description of the goods and certify as to the correctness of the details in the documents. Besides as per Rule 14(2) ibid, no person shall employ any corrupt and fraudulent practice for the purpose of obtaining any licence. In the instant case, there is a clear-cut and deliberate attempt on the part of the exporter/Advance Licence Applicant to manipulate the material particulars in the shipping bills to obtain undue duty-free imports of polypropylene under advance licence. Therefore all such exports made by the exporter manipulating the weight and/or description of the goods as articles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual weighment of the goods. Whereas in the instant case, the Department detected the excess declaration of weight well in time before the goods could be shipped. This apart, the goods sought to be exported were different from the ones declared being of HDPE make as against polypropylene declared in the documents. Due to these various differential features as pointed out above, besides the basic aspect of not indicating the reasons for deeming the goods as prohibited in particular, the claim of the exporter that the case of their present export is on all force with the case law under reference is not sustainable. Moreover it is of significance to note that the exporters have since shifted their claim to one of drawback on the goods in question in lieu of DEEC. I observe herein that Section 113(i) of Customs Act, 1962 invoked in the instant case refers inter alia to goods under claim for drawback apart from prohibited goods. It therefore transpires that there is a clear-cut misdeclaration of material particulars viz., weight, capacity/volume and material of manufacture of the export goods in question under cover of Shipping Bill No. 1367, dated 16-10-1995 and a similar misdecla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar circumstances, the Tribunal upheld the offences and also as a consequence upheld the confiscation and imposition of RF & penalty; and also on being confronted with the judgment of the Tribunal rendered in Ratan Exports & Others - 2000 (123) E.L.T. 808 (T) = 1999 (80) ECR 677 wherein the Tribunal upheld the confiscation of goods and imposition of fine and penalty on similar misdeclaration in the export shipping bill and allowed Revenue appeal enhancing the penalty from Rs. 1 lakh to Rs. 10 lakhs on the manufacturer and Rs. 1 lac to Rs. 5 lakhs on the merchant-exporter and also it was pointed out that these judgments have since been confirmed by the Apex Court, ld. Counsel points out in the cited case of Ratan Exports & Indus. Ltd. & Ors. v. CC Chennai reported in 2000 (123) E.L.T. 808 (T) = 1999 (80) ECR 677 (T), the intention to evade was manifest and clear inasmuch the goods required to have been exported were floppy disc drives and computers but what was found to be only junks. This is not the position in the present case. As regards the Larger Bench judgment, he points out that even in that case the appellants enhanced the value to take more draw back while declaring the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise at all and the goods become tainted and confiscable goods. Under Sec. 111 read with Sec. 125 of the Customs Act, the officer has got powers to confiscate and also release the same on payment of fine which could be appropriate and it can be even five times the value. He submits that in the present case, a very lenient view has been taken. He refers to the judgment of the Apex Court in Jain Exports Pvt. Ltd. v. U.O.I. - 1993 (66) E.L.T. 537 (S.C.), wherein the Apex Court has laid down that bona fide action of assessee by itself cannot entitle him to claim full waiver of fine. He, therefore, submits that appellants do not have any case viewed from any angle and hence appeals are required to be dismissed. 11. On a very careful consideration of all the pleas raised by the ld. Counsel both orally as well as appellants arguments both written and oral raised before the Commissioner and also after a perusal of the detailed findings of the Commissioner, we are of the considered opinion that there is no infirmity or illegality in the impugned order. The Commissioner has clearly found the violation with regard to one Shipping Bill No. 1367 wherein the weight was found to be 3386 k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have declared HDPE which was not meant to be declared in terms of the policy and the licence held by them. Mere fact that they have surrendered the licence after the offence was detected, is of no consequence. On the date of filing of Shipping Bill, the item which was exported was not in terms of the licence held by them and therefore mere plea of "inadvertence" does not arise. As the goods being tainted are liable for confiscation and also for imposition of penalty. In view of the judgments noted supra, the Larger Bench of the Tribunal and the Apex Court, we are of the considered opinion that for a value of Rs. 35 lakhs in respect of 12 consignments, the Commissioner has taken a very lenient view and imposition of penalty of Rs. 3.50 lakh which is not even 12% of the value of 12 consignments. In the case of Harpreet International the Tribunal has held that redemption fine can be imposed to the extent of 85% of the CIF value. The attempt made by the Counsel to distinguish all these judgments although is a bold attempt and appreciable but, we are not in a position to accept the pleas because the judgments are directly and clearly applicable to the facts of the case and hence s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
