Material misdeclaration in export documents supports confiscation for improper export, while condition-based import confiscation fails on these facts.

A material mismatch between the declared gold content and the actual composition of exported bangles constituted a false export declaration, bringing the goods within confiscation for attempted improper export under Section 113(i); confiscation of the 244 bangles was therefore upheld. Confiscation of gold ornaments recovered from the premises and the untraced balance gold under Section 111(o) was not sustained because the scheme's duty consequence for non-export had already operated and the provision was not otherwise attracted on those facts. The misdeclaration justified penal action, but only the Section 114 penalty was retained and reduced, redemption of the bangles on payment of fine was permitted, and the remaining penalties were set aside.

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Issues: (i) Whether the 244 gold bangles exported with a declaration of gold content were liable to confiscation under Section 113(i) of the Customs Act, 1962; (ii) Whether the gold ornaments recovered from the appellant's premises and the untraced balance gold were liable to confiscation under Section 111(o) of the Customs Act, 1962; (iii) Whether the penalties imposed under the Customs Act, 1962 were sustainable and whether redemption of the confiscated bangles could be permitted.

Issue (i): Whether the 244 gold bangles exported with a misdeclaration of gold content were liable to confiscation under Section 113(i) of the Customs Act, 1962.

Analysis: The export declaration showed 5268.600 gms of gold, but examination disclosed only 2733.34 gms of gold with the balance consisting of enamel. Such a mismatch in a material particular brought the goods within the scope of attempted improper export. The duty-free procurement under the import scheme did not cure the false declaration made in the shipping bill.

Conclusion: The confiscation of the 244 gold bangles under Section 113(i) was upheld, and the finding was against the assessee.

Issue (ii): Whether the gold ornaments recovered from the appellant's premises and the untraced balance gold were liable to confiscation under Section 111(o) of the Customs Act, 1962.

Analysis: Section 111(o) applies where goods exempted subject to a condition are imported in breach of that condition. The imported gold in question had already been subjected to the scheme's consequence for non-export, namely payment of duty by the nominated agency. The recovered ornaments were not goods whose confiscation could be sustained on the footing adopted in the order, and the untraced balance gold also could not be brought within Section 111(o) on those facts.

Conclusion: The confiscation of the recovered ornaments and the alleged balance gold under Section 111(o) was set aside, in favour of the assessee.

Issue (iii): Whether the penalties imposed under the Customs Act, 1962 were sustainable and whether redemption of the confiscated bangles could be permitted.

Analysis: The misdeclaration justified penal consequences, but the goods were not treated as absolutely non-redeemable. In the overall circumstances, the Tribunal restricted the penal liability and allowed redemption fine in place of absolute confiscation, while setting aside the other penalties.

Conclusion: Only penalty under Section 114 was sustained, reduced to Rs.1,00,000, redemption of the 244 bangles on payment of fine was permitted, and the remaining penalties were set aside, in favour of the assessee.

Final Conclusion: The appeal succeeded in part: the confiscation under Section 113(i) stood, but relief was granted against the other confiscations and most of the penalties, with redemption allowed and penalty substantially reduced.

Ratio Decidendi: A material misdeclaration in export documents renders the goods liable to confiscation for attempted improper export, but confiscation under a condition-based import provision cannot be sustained where the scheme's duty consequence has already been triggered and the provision is not otherwise attracted to the facts.

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