Export without required permissions can trigger confiscation liability and personal penalty even after the goods leave customs control.

Export of castor oil without the prescribed permissions and procedure was treated as contravention of the governing export restrictions, so the goods were regarded as prohibited for customs purposes and liable to confiscation under section 113(d) of the Customs Act, 1962. The liability to confiscation arose at the stage of export contrary to restriction, and personal penalty under section 114(i) was available where the exporter's act or omission rendered the goods so liable. Actual physical confiscation of goods already exported was not required for penalty to be sustained.

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Issues: (i) whether export of castor oil without following the prescribed procedure and permissions amounted to a prohibition attracting liability to confiscation under section 113(d) of the Customs Act, 1962; (ii) whether penalty under section 114(i) of the Customs Act, 1962 could be imposed even though the goods had already been exported and were not actually confiscated.

Issue (i): whether export of castor oil without following the prescribed procedure and permissions amounted to a prohibition attracting liability to confiscation under section 113(d) of the Customs Act, 1962.

Analysis: Section 11(1) of the Foreign Trade (Development and Regulation) Act, 1992 and para 18(c) of Appendix 14-II of the Export and Import Policy 2002-07 required export to be in accordance with the governing policy and the prescribed procedure. The failure to obtain the requisite permissions and to follow the procedure under the customs circular and export policy was treated as a contravention of the legal restrictions governing export. For the purposes of section 2(33) of the Customs Act, 1962, non-compliance with the conditions attached to export permission amounts to prohibited goods.

Conclusion: The export was treated as contrary to prohibition and the goods were held liable to confiscation under section 113(d) of the Customs Act, 1962.

Issue (ii): whether penalty under section 114(i) of the Customs Act, 1962 could be imposed even though the goods had already been exported and were not actually confiscated.

Analysis: The liability to confiscation under section 113(d) arises at the stage of an attempted export contrary to prohibition, and section 114(i) is attracted when a person's act or omission renders the goods so liable. Actual confiscation of already exported goods is not a prerequisite for personal penalty. The reasoning adopted from the binding High Court authority was that the accrued liability to confiscation is not extinguished merely because the attempt succeeded and the goods crossed the customs frontier.

Conclusion: Penalty under section 114(i) of the Customs Act, 1962 was held to be valid despite the absence of actual confiscation of the exported goods.

Final Conclusion: The appeals failed, and the penalties imposed on the appellants were sustained because the export contravened the governing prohibition and personal liability under the Customs Act arose independently of actual confiscation.

Ratio Decidendi: Liability to confiscation under section 113(d) of the Customs Act, 1962 arises upon an attempted export contrary to prohibition, and personal penalty under section 114(i) follows even if the goods have already been exported and cannot be physically confiscated.

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