Penalty for non-disclosure in DEPB shipping bill upheld, but reduced after the breach of declaration requirements was found established.

Filing a DEPB shipping bill without declaring that the exporter was a 100% Export Oriented Unit was treated as a contravention of the statutory declaration requirements under the Customs and foreign trade framework. The absence of admissible DEPB credit was not in dispute; the only question was penalty. Disclosure in the AR-4 form was held insufficient to cure the breach, so penalty was found leviable. On the facts and circumstances, however, the penalty was moderated and reduced.

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Issues: Whether penalty was leviable for filing a DEPB shipping bill without indicating that the exporter was a 100% Export Oriented Unit, and whether the penalty deserved reduction on the facts.

Analysis: The non-admissibility of DEPB credit was not disputed. The only issue was the penalty founded on contravention of Section 50(2) of the Customs Act and Rule 14 of the Foreign Trade (Regulation) Rules, 1993. The filing of a DEPB shipping bill without the required declaration was treated as a contravention of the statutory declaration requirement, and the reference to disclosure in AR-4 was held insufficient to negate the breach. Considering the overall facts and circumstances, the quantum of penalty was found liable to be moderated.

Conclusion: Penalty was held imposable, but it was reduced from Rs. 50,000 to Rs. 25,000.

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