Export prohibition and transitional policy protected goods filed before restriction, defeating confiscation and penalty under customs law.

Export goods presented by shipping bill before an export prohibition was issued were treated as having crossed the relevant entry stage under Section 50 of the Customs Act, 1962. On the stated facts, the goods had also been stuffed, sealed and dispatched before the prohibition, and the transitional protection in para 1.5 of the Foreign Trade Policy, 2009-14 applied. In that setting, the goods were not liable to be treated as prohibited goods merely because they entered the customs area later, so confiscation under Section 113(d), redemption fine and penalty under Section 114(i) were not warranted.

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Issues: Whether export goods could be confiscated and penalised under the Customs Act, 1962 when shipping bills had been filed before the export prohibition, in the light of the transitional protection under the Foreign Trade Policy, 2009-14.

Analysis: The filing of the shipping bill constitutes the relevant stage of entry for export under Section 50 of the Customs Act, 1962. On the facts, the shipping bills had been presented before the notification prohibiting export was issued, and the goods had been stuffed, sealed and dispatched from the factory before that date. The subsequent prohibition was also subject to the transitional regime under para 1.5 of the Foreign Trade Policy, 2009-14. In these circumstances, the goods could not be treated as prohibited goods for the purpose of confiscation under Section 113(d) merely because they entered the customs area later, and the imposition of penalty under Section 114(i) could not survive.

Conclusion: Confiscation, redemption fine and penalty were not warranted; the appeals were entitled to succeed.

Final Conclusion: The impugned orders were set aside and relief was granted to the appellants.

Ratio Decidendi: For export goods, the legality of confiscation under Section 113(d) must be tested with reference to the stage of entry under Section 50 and the applicable transitional export policy, and goods presented for export before the prohibition cannot be confiscated merely because they reached the customs area later.

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