DEEC export shortage confined to one consignment, with duty liability and penalty reduced accordingly

Duty demand based on a shortage detected in one export consignment under the DEEC scheme could not be extended to all consignments where the earlier shipments had already been examined and found correct as to description and net weight. The shortage was confined to the 40th consignment, so the duty liability was restricted to that consignment alone. Because the duty exposure was substantially reduced, the penalty was also reduced proportionately. The matter resulted in partial relief to the assessee.

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Issues: Whether the duty demand based on shortage detected in one export consignment could be extended to all consignments under the DEEC scheme, and whether the penalty required reduction in view of the restricted duty liability.

Analysis: The shortage was noticed only in the 40th consignment, while the earlier consignments had been examined and found to be in order as regards description and net weight. The limited finding of shortage could not, therefore, be applied across the board to all 40 consignments merely on the basis of the proprietor's admission regarding misdeclaration of weight. The duty liability was confined to the 40th consignment. Since the duty amount stood substantially reduced, the penalty also required corresponding reduction.

Conclusion: The duty demand was restricted to Rs. 9,825 for the 40th consignment and the penalty was reduced to Rs. 5,000. The appeal was partly allowed in favour of the assessee.

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