Re-export permitted on redemption fine payment without mandatory penalty condition for mis-declared Shikakai and Areca nuts

Gujarat HC allowed petition in part regarding re-export of mis-declared Shikakai and Areca nuts. Petitioner had excess 9845 kgs Areca nuts and short 9920 kgs Shikakai compared to bill of entry. Court held penalty payment cannot be mandatory condition for re-export as penalty order is subject to appeal before Appellate Authority. Authorities directed to permit re-export on payment of redemption fine Rs. 5,00,000 only, without requiring penalty payment as condition precedent.

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Issues Involved:
1. Validity of the condition to pay penalty for re-export of goods.
2. Applicability of Section 125 of the Customs Act, 1962 for re-export.

Summary:

1. Validity of the condition to pay penalty for re-export of goods:

The petitioner challenged the imposition of penalty as a condition for re-exporting goods under the Order in Original. The petitioner argued that once the redemption fine of Rs. 5,00,000/- was paid, the penalty should not be a prerequisite for re-export. The petitioner had already challenged the imposition of this penalty before the Appellate Authority, and the appeal was pending. The court observed that the penalty imposed by the respondent authorities is for violation of the provisions of the Customs Act, 1962 and is unrelated to the redemption of goods permitted for re-export. Therefore, the court held that the respondent authorities should have allowed the petitioner to re-export the goods without insisting on the payment of the penalty, as it was under appeal.

2. Applicability of Section 125 of the Customs Act, 1962 for re-export:

The court examined Section 125 of the Customs Act, 1962, which allows for the imposition of redemption fine in lieu of confiscation of goods imported in contravention of the Act. The court noted that this provision does not make the release of goods conditional on the payment of a penalty. The court clarified that while the imposition of redemption fine for re-export is sub-judice before the Appellate Authority, the specific issue in this petition was whether the penalty could be a condition for re-export.

Judgment:

The court concluded that paragraph No. 17.4 of the impugned order, which made the payment of penalty a condition for re-export, was without basis and required modification. The court ordered that the petitioner is permitted to re-export the goods on payment of the redemption fine only, without the requirement to pay the penalty. The petition was partly allowed, and the respondent authorities were directed to permit the re-export of goods without insisting on the payment of the penalty. The court did not express any opinion on the merits of the matter pending before the Appellate Authority.

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