2013 (8) TMI 211 - AT - Customs

Tribunal overturns penalties for misdeclaration of goods, ruling in favor of appellant

M/s. Trade Wide Exports Versus The Commissioner of Customs Mangalore

The Tribunal set aside the confiscation, redemption fine, and penalty imposed on the appellant for misdeclaration of goods for export. Despite the goods ... Imposition of fine and penalty – confiscation of goods – stay application - whether the items presented for export can be considered to be prohibited – whether there was a misdeclaration or an attempt to export prohibited goods by the assessee justifying the imposition of redemption fine and penalty - Held that:- The confiscation was set aside and redemption fine and penalty are also consequently set aside - in the absence of any mis-declaration or deliberate attempt to export goods which are prohibited without having any ground for a belief that the same were not prohibited - imposition of fine and penalty cannot be sustained - even if the goods were prohibited the customs authorities as well as the appellants genuinely believed that the same was not prohibited – the opinions given by the DGFT and the NOC issued by the Forest Department also support the case of the appellant that there was no intention to export the prohibited goods and there was no mis-declaration – stay application allowed – decided in favour of assessee. Issues: Misdeclaration of goods for export, imposition of redemption fine and penaltyAnalysis:1. The appellant filed a shipping bill for export of casuarina wood poles, specifying the size of each pole. The consignment was examined and allowed for export without any objection. However, the consignment was later intercepted, leading to confiscation of goods and imposition of redemption fine and penalty.2. The main issue to be decided was whether the exported items were prohibited goods, justifying the imposition of redemption fine and penalty. The Revenue relied on a test report stating the wood samples contained bark and were identified as casuarina, which is classified as prohibited for export under Foreign Trade Policy.3. The appellant argued that a NOC was issued by the Forest Department for export, and a clarification from DGFT stated that the items were not covered by the Foreign Trade Policy. The appellant had also exported similar consignments earlier, which were allowed by customs authorities.4. The Tribunal found that the Forest Department and customs authorities did not consider the goods as prohibited. The description provided by the appellant was deemed applicable to the goods proposed for export. The opinions of DGFT and the NOC from the Forest Department supported the appellant's case of no intention to export prohibited goods.5. The Tribunal concluded that even if the goods were prohibited, both the customs authorities and the appellant genuinely believed otherwise. In the absence of misdeclaration or deliberate attempt to export prohibited goods, the imposition of fine and penalty could not be sustained. Therefore, the confiscation, redemption fine, and penalty were set aside, allowing the goods to be taken back into the country without delay. The stay application and appeal were allowed accordingly.