Misdeclared export value can make goods prohibited, sustaining confiscation and leaving fine and penalty unchanged.

Gross over-invoicing of export goods and misdeclaration of export value were treated as prohibited for customs purposes because export without full value declaration was barred under the applicable foreign exchange and foreign trade controls. On that basis, the goods fell within section 113(i) of the Customs Act, 1962 and confiscation was sustained. The redemption fine and penalty were also left undisturbed, as the extent of over-invoicing justified the adjudicating authority's view and no ground for reduction was shown. The appeal therefore failed, with confiscation, redemption fine, and penalty maintained.

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Issues: (i) Whether over-invoiced export goods, whose value was misdeclared, constituted prohibited goods so as to attract confiscation under section 113(i) of the Customs Act, 1962; (ii) whether the redemption fine and penalty imposed on the appellants called for reduction.

Issue (i): Whether over-invoiced export goods, whose value was misdeclared, constituted prohibited goods so as to attract confiscation under section 113(i) of the Customs Act, 1962.

Analysis: Section 2(33) of the Customs Act, 1962 treats as prohibited goods those whose import or export is subject to prohibition under the Customs Act or any other law in force. Export of goods without declaration of the full export value was prohibited under section 18(1a) of the Foreign Exchange Regulation Act, 1973, and the requirement of correct declaration of export value was also recognised under the Foreign Trade (Development and Regulation) Act, 1992. On the admitted facts, the goods were grossly over-invoiced and the misdeclaration brought them within the category of prohibited goods for customs purposes.

Conclusion: The confiscation under section 113(i) of the Customs Act, 1962 was sustained.

Issue (ii): Whether the redemption fine and penalty imposed on the appellants called for reduction.

Analysis: The extent of over-invoicing and the high value of the goods justified the view taken by the adjudicating authority. The fine and penalty were already fixed on a lenient basis, and no ground was made out for interference.

Conclusion: The redemption fine and penalty were not reduced.

Final Conclusion: The appeal failed in full, and the confiscation, redemption fine, and penalty were maintained.

Ratio Decidendi: Misdeclaration of export value in violation of prohibitory legal requirements renders the goods prohibited for customs purposes and attracts confiscation under section 113(i) of the Customs Act, 1962.

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