Untrue export value declaration can trigger confiscation and penalty where goods remain under customs control and export is incomplete.

An attempted export remained within customs control because the goods had not been finally cleared under Section 51 of the Customs Act, so later interception and seizure were within jurisdiction. The evidence supported a finding, on preponderance of probability, that the export contract was fictitious and antedated, and that the declared export value was understated. Contravention of Section 18(1)(a) of the Foreign Exchange Regulation Act, read with Section 67, was treated as attracting Customs Act restrictions, making the goods liable to confiscation under Section 113(d) and the persons concerned liable to penalty under Section 114. Active involvement in the transaction justified the penalties.

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Issues: (i) whether the show cause notices and seizure proceedings were without jurisdiction after the earlier presentation of the shipping bills, (ii) whether the alleged export contract was genuine and whether the export value was correctly declared, and (iii) whether confiscation and penalties under the Customs Act and the Foreign Exchange Regulation Act were sustainable.

Issue (i): whether the show cause notices and seizure proceedings were without jurisdiction after the earlier presentation of the shipping bills

Analysis: The goods were not shown to have been finally cleared for export under Section 51 of the Customs Act, 1962 when the matter was re-presented for shipment. The earlier processing of the shipping bills did not conclude the matter, and the later presentation brought the export attempt back within the reach of the proper officer. On the facts found, the interception and seizure were based on material giving rise to a reasonable belief that the goods were liable to confiscation.

Conclusion: The proceedings were not without jurisdiction and this contention failed.

Issue (ii): whether the alleged export contract was genuine and whether the export value was correctly declared

Analysis: The evidence showed that the contract relied upon by the appellants was unsupported by ordinary commercial correspondence, was not satisfactorily signed, was received much later than its stated date, and bore erased dates and other suspicious alterations. The surrounding circumstances, including the telex messages and the admitted price at which the goods were actually sold, supported the finding that the contract was fictitious and antedated. In adjudication proceedings, the standard is one of preponderance of probability, and the appellants failed to discharge the burden on facts within their special knowledge.

Conclusion: The finding of fictitious and antedated contract and consequent under-valuation was upheld.

Issue (iii): whether confiscation and penalties under the Customs Act and the Foreign Exchange Regulation Act were sustainable

Analysis: Contravention of Section 18(1)(a) of the Foreign Exchange Regulation Act, 1973 attracted the deeming effect of Section 67 of that Act, so that the restrictions were treated as restrictions under the Customs Act, 1962. The attempted export with an untrue declaration of full export value therefore attracted confiscation under Section 113(d) and penalty under Section 114 of the Customs Act, 1962. The role of the appellants in the transaction, including their active involvement in the contract and shipment, justified the penalties imposed.

Conclusion: Confiscation and penalties were rightly sustained.

Final Conclusion: The appeals failed on all substantive grounds, and the adjudication order was affirmed in full.

Ratio Decidendi: In an attempted export, an untrue declaration of full export value in violation of Section 18(1)(a) of the Foreign Exchange Regulation Act, 1973, read with Section 67 of that Act, renders the goods liable to confiscation and the persons concerned liable to penalty under the Customs Act, 1962, even where the goods had earlier been processed for export but had not finally left customs control.

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