Proof of actual export overrides procedural lapse; duty demand set aside, but penalty sustained.

Duty demand was found unsustainable where the goods were proved to have been exported through Nepal Customs certificates, certified shipping bills and ARE-1 documents matching quantity and batch numbers. Although the exporter followed the wrong notification procedure, the record established actual export, so the duty demand was set aside. The penalty was, however, sustained.

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Issues: Whether the duty demand was sustainable when the goods were proved to have been exported but the prescribed export procedure was not followed.

Analysis: The export of the goods was supported by Nepal Customs certificates, corresponding shipping bills certified by the Indian Customs authorities at the Nepal border, and ARE-1 documents showing matching quantity and batch numbers. On verification of the record, the explanation that the goods had in fact been exported was accepted, even though the appellant had followed the wrong notification procedure.

Conclusion: The duty demand was set aside. The penalty of Rs. 5,000 was sustained.

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