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TMI Blog2020 (2) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... o extra territorial jurisdiction to the Customs Act during the relevant period. A plain reading of Section 1(2), 2(19) and Section 113 shows that during the relevant period since the Customs Act extended only to the whole of India and not beyond, action under this act could be taken only within the country and not outside. Therefore, only the export goods, i.e., the goods which are to be exported could be confiscated. There was no provision to confiscate the goods which have already been exported. Therefore, in the present case, the First Appellate Authority was correct in setting aside the confiscation of the goods under Section 113 as this section did not provide for such confiscation - Since the goods cannot be confiscated under Section 113, the question of the order imposing a redemption fine under Section 125 also does not arise. Penalty - HELD THAT:- The penalty under Section 114 is dependent upon the goods being held liable for confiscation under Section 113 this penalty also does not sustain. This is a fit case to be remanded to the First Appellate Authority with a direction to give a specific finding with regard to the mis-declaration of the goods by way of duplicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods were liable for confiscation under Section 113(h)(i) of the Customs Act, 1962 as the respondents have mis-declared the nature of the goods. It further appeared to them that the respondents were liable for penalty under Section 114 and 114A of the Customs Act, 1962. Further, it appeared that the DEPB credit sought to be availed by the respondent amounting to ₹ 2,48,253/- on the exported goods are liable to be rejected. Accordingly, a show cause notice was issued to the respondents seeking to: a) re-classify the exported products under entry serial no. 65/531 of engineering products instead of C-379 as claimed by the respondent; b) restrict the DEPB credit sought to be availed by the respondent amounting to ₹ 4,09,497/- to ₹ 1,61,245/- c) proposing to held the exported goods liable for confiscation under Section 113(h)(i) Customs Act, 1962; and d) proposing to impose penalty under Section 114/114A of the Customs Act, 1962. After following due process, the original authority confirmed the reclassification of the exported goods and restriction of the DEPB credit. Further, he held the exported goods were liable for confiscation and as they w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it which is received under the DEPB scheme can be used towards payment of customs duty with respect to any imports whether or not they are related to the inputs. iii) Commissioner (Appeals) has also erred in holding that under the DEPB schemes, customs has no role which is incorrect as the Hon ble High Court of Andhra Pradesh had held in the case of Shravani Imports Pvt Ltd., Vs ADG, DRI, Chennai Writ Petition No. 20446/2008 and 18256/2008 that DEPB is also a duty and the same has to be recovered under Section 28 of the Customs Act, 1962. iv) It is on record that the exporter has issued two sets of invoices one for the customs and another for the overseas customers giving different descriptions. The invoices submitted to the customs indicated that the export goods were cast iron castings machines (cylinder liners) whereas the invoices supplied to the overseas suppliers indicated the description of goods as cylinder liners/automotive liners . The Commissioner (Appeals) has completely ignored this mis-declaration. As there was a clear misdeclaration, the respondent was not eligible for differential DEPB credits on such export goods and were also liable for penalty. v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. We find that First Appellate Authority has not considered this aspect or given any findings thereon. As far as the confiscation under Section 113 of the goods which have already been exported is concerned, we find that this section reads as follows: Section 113 in the Customs Act, 1962 113. Confiscation of goods attempted to be improperly exported, etc. The following export goods shall be liable to confiscation: (a) any goods attempted to be exported by sea or air from any place other than a customs port or a customs airport appointed for the loading of such goods; (b) any goods attempted or to be exported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the export of such goods; (h) any goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77. (i) any goods entered for exportation which do not correspond in respect of value or in any material particular with the entry made under this Act or in the case of baggage with the declaration made under section 77; (ii) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1) the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods. As can be seen, if the goods are confiscated, the title of the goods passes to the Government of India and instead of taking over the goods, the person from whom the goods are seized can be given an option to pay a fine in lieu of confiscation and take the goods. It is only an option to the party under Section 125 is not an obligation or a penalty. The person may not choose the option and allow the goods to be confiscated and the goods will be confiscated and sold by the department. In the present case, if the goods are held liable for confiscation under Section 113 and the option is given under Section 125 the exporter may not choose the option at all and he does not have to pay the redemption fine. On the other hand, if he chooses to pay the redemption fine then the department is bound to give him possession of the goods which is impossible as the goods have already left the country. For this reason also, the confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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