Inflated export valuation leads to confiscation, but redemption fine and penalties must remain proportionate to culpability.

Reliable market enquiry evidence and an un-retracted managerial statement supported the finding that the declared export value was artificially inflated, so the goods were liable to confiscation under customs valuation and export confiscation provisions. The explanation that no export incentive was intended and that FOB value had been realised did not displace the evidence of overvaluation in the shipping bills and supply chain. Although confiscation was sustained, the redemption fine and penalties were held excessive in light of the real value of the goods and individual culpability; they were reduced, and the penalty on the employee was set aside because no independent role in the overvaluation was established.

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Issues: (i) whether the declared export value of the goods was inflated and the goods were liable to confiscation; (ii) whether the redemption fine and penalties imposed on the exporter, supplier, managing director and employee required interference.

Issue (i): whether the declared export value of the goods was inflated and the goods were liable to confiscation.

Analysis: The market enquiry was found to have been conducted through dealers dealing in garments, and the statement of the managing director, recorded later, accepted the prices ascertained by Customs and was not retracted. The explanation that no export incentive was intended and that FOB value had been realized did not displace the evidence showing that the value declared in the shipping bills and in the underlying supply chain was artificially raised. In the circumstances, the discrepancy in value attracted confiscation under the customs valuation and export confiscation provisions.

Conclusion: The declaration of value was held to be incorrect and the goods were held liable to confiscation.

Issue (ii): whether the redemption fine and penalties imposed on the exporter, supplier, managing director and employee required interference.

Analysis: Although confiscation was sustained, the fine and penalties were found to be excessive having regard to the real value of the goods and the facts of the case. The managing director was treated as the person directing the operation, so penalty was warranted, but the amounts required reduction. The employee was found to have acted only in the course of employment and no independent role in the overvaluation was established, so penalty on him was not justified.

Conclusion: The redemption fine and penalties were reduced, and the penalty on the employee was set aside.

Final Conclusion: The appeal succeeded in part: confiscation was upheld, but the monetary consequences were substantially reduced and one personal penalty was deleted.

Ratio Decidendi: Where export value is shown by reliable market evidence and acceptance in statements to have been inflated, the goods are liable to confiscation, but the fine and penalties must remain proportionate to the proved gravity of the offence and individual culpability.

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