Customs penalty fails without proof of prohibited export goods under the controlling export order

Penalty under Section 114 of the Customs Act, 1962 could not be sustained because the authorities failed to record a finding that the goods allegedly omitted from declaration were prohibited for export under Item No. 32(l)(b) of Schedule I, Part A of the Exports (Control) Order, 1968. The record did not establish that the petitioner was exporting handwoven woollen carpets or woollen chain stitched rugs, which were the only goods covered by the prohibition relied upon. In the absence of that factual foundation, the statutory basis for penalty was not made out, and the penalty was set aside while the remaining orders were left undisturbed.

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Issues: Whether the penalty imposed under Section 114 of the Customs Act, 1962 could be sustained in the absence of a finding that the petitioner was exporting prohibited goods covered by Item No. 32(l)(b) of Schedule I of Part A of the Exports (Control) Order, 1968.

Analysis: The authorities proceeded on the basis that the declaration omitted 28 pieces of woollen carpets and that such goods were prohibited for export unless covered by a licence or permit. However, no finding was recorded that the petitioner was in fact exporting handwoven woollen carpets or woollen chain stitched rugs, which were the only goods brought within the prohibition relied upon. In the absence of such a factual finding, the statutory foundation for imposing penalty under Section 114 of the Customs Act, 1962 was not made out.

Conclusion: The penalty imposed under Section 114 of the Customs Act, 1962 was set aside, while the remaining part of the orders was left undisturbed.

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