Customs penalty for abetting fraudulent exports upheld in principle, but reduced after considering prior consequences.

Misdeclaration of inferior goods as ladies nightwear, use of blank signed shipping bills, and circuitous container movement supported a finding that the exporters and facilitators knowingly enabled fraudulent exports. Those acts and omissions were treated as abetment, bringing the goods within confiscability and attracting penalty under the Customs Act. The penalty was maintained in principle because the record showed participation and awareness of the suspicious export arrangement, but the quantum was reduced in view of the exporter's existing consequences, including denial of DEPB benefit and cancellation of licences.

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Issues: Whether the appellants were liable to penalty for abetting fraudulent export and misdeclaration of goods, and whether the penalty imposed under the Customs Act required reduction.

Analysis: The exports were found to involve misdeclaration of inferior goods as ladies nightwear and the declared value was rejected. The record showed that the appellants facilitated the export process by arranging the circuitous movement of containers, procuring and using blank signed shipping bills, and enabling customs clearances through employees shown as CHA staff. Their own statements indicated knowledge of the suspicious nature of the exports and participation in the arrangement that enabled the fraudulent exports. Such acts and omissions brought the goods within the scope of confiscability and attracted penalty for abetment. At the same time, the exporter had already suffered denial of DEPB benefit and cancellation of the licences.

Conclusion: The appellants were held liable for penalty, but the quantum was reduced to Rs.5,00,000 each.

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