2004 (12) TMI 238 - AT - Customs

Tribunal Rules Section 113 Inapplicable to Exported Goods; Confiscation and Penalty u/s 114 Deemed Unlawful.

The Tribunal determined that Section 113 of the Customs Act is inapplicable to goods already exported, as it pertains to goods 'attempted to be exported.' ... Levy of penalty u/s 114 - Misdeclaration of goods and export price - declared 'Cassia Oil' as 'Cassia' - DEEC scheme - duty-free - benefit of exemption - HELD THAT:- We have no doubt in our mind that, when the above provision was enacted, Parliament was conscious of the fact that goods already exported out of Indian territory was incapable of being confiscated. A significant contrast is noticeable in Section 111. Thus, we hold that the provisions of Section 113 cannot be invoked for confiscation of goods already exported. Section 113 can be pressed into service only to confiscate goods which are 'attempted to be exported' in violation of any of the prohibitions mentioned in the various clauses thereof. The confiscation order in respect of the subject goods is, therefore, bad in law. Consequently, the order of penalty on the exporter u/s 114 is not sustainable. In the result, we set aside the order of the Commissioner and allow the assessee's appeal with consequential reliefs if any. Consequently, the Revenue's appeal seeking enhancement of penalty gets dismissed. Issues involved: Appeals against penalty imposed under Section 114 of the Customs Act for misdeclaration of goods and export price.Summary:1. The appeals pertain to exports of 'Cassia Oil' declared by the assessee through Tuticorin Port to fulfill export obligation for 'Cassia' imports under DEEC scheme. Department suspected misdeclaration, leading to a penalty imposed under Section 114. 2. Assessee challenges the order of confiscation and penalty, arguing that exported goods were not liable for confiscation under Section 113. Revenue seeks higher penalty, contending the gravity of misdeclaration warrants more than the imposed Rs. 1 lakh penalty.3. Assessee's counsel argues that since import dispute was settled, the penalty on export goods is unjustified. Revenue asserts misdeclaration admission during settlement justifies penalty. Tribunal notes Section 113 pertains to goods 'attempted to be exported,' not already exported, rendering the confiscation order invalid and penalty unsustainable.4. Tribunal finds Section 113 inapplicable to goods already exported, as it focuses on goods 'attempted to be exported.' Consequently, confiscation and penalty on exported goods are deemed unlawful. The Commissioner's order is set aside, allowing the assessee's appeal, while dismissing the Revenue's appeal for increased penalty.