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TMI Blog2014 (5) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority and accordingly penalties have been imposed upon the appellants under Sec. 114 (i) of the Customs Act 1962. 3. Sh. B. Rama Rao (Advocate) appearing on behalf of the appellants argued that the impugned goods have not been confiscated by the adjudicating authority and accordingly penalties can not be imposed upon the appellants under Sec. 114 of the Custom s Act 1962 as per CESTAT, Chennai Bench judgment in the case of K Kamla Bai Vs. Commissioner of Customs & Central Excise, Trichy [2005 (186) ELT 459 (Tri. - Chennai)]. It was also his case that there was no prohibition under Exim Policy for the export of C astor Oil and therefore, the provision of Section 113 (d) of the Customs Act 1962 can not be invoked, especially when the export goods were not confiscated. It was also argued that appellants had the permissions from DGFT for trading in Castor Oil and coul d procure Castor Oil from DTA units and export by such outsourcing. It was argued by the Learned Advocate that if the export of Castor Oil is not prohibited under Exim Policy, the same can not become prohibited because of mere failure on the part of an ex porter to abide the condition of Exim Policy making them liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of this Act, the rules and orders made there under and the export and import policy for the time being in force. ii) Provisions of Para 18 (C) of Appeals 4-II of Export and Import Policy 2002 - 07 re ads as under: The export orders so procured shall be executed within the parameters of SEZ Schemes and the goods shall be directly transferred from the SEZ unit to the port of Shipment." 5.3. It is observed from the above provisions that export orders of cast or oil were required to be executed by the appellants within the parameters of SEZ Schemes and the goods were required to be directly transferred from SEZ unit to the port of shipment. Appellants have been granted necessary permissions by the Development Commissioner, Kandla SEZ for general trading of all imported goods and indigenous goods with the condition, inter - alia, that trading in local purchases will be permitted to all the items except those listed in the prohibited list for import and export. CB EC Circular No. 26/2003. Cus dated 1.4.2003 was relied upon by the Revenue to argue that permission/approval of commissioner of Customs was required for outsourcing the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bai vs. Commissioner of Customs & Central Excise, Trichy (Supra) to the effect that no penalties can be imp osed under Sec 114 if the offending goods are not confiscated under Sec 113 (d) of the Customs Act 1962. As the goods are already exported hence these are not liable to confiscation. In this regard, it may be relevant to mention that the same issue has already been settled by Hon‟ble Calcutta High Court in the case of M/s Eurasian Equipments & Chemicals vs. Commissioner of Customs and Other (Supra). In that case the issue before the Hon‟ble Court was whether or not goods exported in violation or prohibition/restriction imposed under Sec. 12 (1) of the Foreign Exchange Regulation Act 1947will be deemed to be violation leading to penalty, with respect to goods already exported, under Sec. 114. In that case as it was argued by the appellants that penalties under Sec. 114 of the Customs Act 1962 can only be imposed with respect to „export goods‟ which are not yet exported. Para 26 to 30 of the order passed by Calcutta High Court in the above case are relevant and are reproduced below: "26. It is quite clear that violation of any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, therefore, arises as soon as the said goods are attempted or sought to be exported contrary to such prohibition. This liability which "accrues or arises as soon as the attempt to export the goods is made is in no way dependent and has not been made dependent on the possibility or feasibility of actual confiscation of the goods. This accrued liability of the goods to confiscation clearly attracts Section 114 of the Customs Act which provides that any person who in relation to any goods, does or omits to do any act, which act or omission would render such goods liable to confiscation under Section 113 or abets the doing or omission of such an act, shall be liable to penalty as provided in the said Section. With the incurring of liability of the goods to confiscation under Section 113, any person who in relation to such goods has done or omitted to do any act which act or omission has rendered such goods liable to confiscation under Section 113 or abets the doing or omission of such an act, renders himself liable to penalty under Section 114. On a proper construction of Sections 113 and 114 of the Customs Act with reference to the language used in the said sections th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empt ed to be exported and will have no application when goods have in fact been exported will defeat the purpose and object for which the said provisions have been introduced. The submissions that the legislature has so intended by using the words 'attempt to export' in Sections 113 (a), (b) and (d) and the analogy of the offence of attempt to commit suicide given in this connection are, in our opinion, misleading and devoid of merit. An attempt to commit suicide is indeed an offence and the act of committing suicide resulting from the successful attempt may not be considered to be an offence. This is so for the simple reason that once a person attempting to commit suicide succeeds in his attempt he places himself beyond the reach of law and no punishment is intended to be inflicted on the dead person or his heirs and legal representatives by imposing any fine or penalty, as they may in no way be liable or responsible for the said act. As we have earlier observed, the liability of the goods to confiscation arises under Section 113(d), as soon as the goods are attempted to be exported and the attempt to export the goods necessarily precedes the actual export of the goods. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act does not affect the position. 30. We have earlier noticed that under Section 113 of the Customs Act export goods incur the liability to confiscation at the stage when they are attempted to be exported." 8. The above case law was not brought to the knowledge of the Chennai Bench while deciding the case of K Kamla Bai vs. Commissioner of Customs and Central Excise, Trichy (supra) which is thus distinguishable. In view of the law laid down by Calcutta High Court, confiscation of goods under Sec 113 (d) is an independent act from the penalties imposable under Sec. 114 (i) of the Customs Act 1962. Penalty under Sec 114 (i) is attracted, on an act committed by the exporter, with respect to goods liable to confiscation, as soon as the goods are brought into a customs area for export in violation of the prohibitions/restrictions. An offence is thus committed by the appellants and can not be wiped away by the fact that attempts of the appellants were successful. Therefore, penalties under Sec. 114 (i) of the Customs Act 1962 have been rightly imposed. 9. In view of the above appeals filed by the appellants are rejected. (Pronounced in Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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