Export misdeclaration penalty fails where deliberate intent is unproved and the discrepancy is treated as a clerical error.

Penalty for export misdeclaration cannot be sustained unless deliberate wrongdoing is proved by cogent evidence. The Department failed to produce the relevant register or any satisfactory explanation for its non-production, while the shipping bill description was supported by the export promotion copy and other documents. On that material, the alleged discrepancy was treated as a clerical error, and mere suspicion or the loss of the original shipping bill was held insufficient to establish mala fides. The penalty was therefore set aside.

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Issues: Whether the exporter had misdeclared the description of the goods in the shipping bill so as to attract action under the Customs Act and the Export (Control) Order, and whether the penalty imposed for the alleged misdeclaration was justified.

Analysis: The record showed that the Department did not produce the relevant register bearing the shipping-bill entries and gave no satisfactory explanation for its non-production. The goods had been examined and cleared on the documents available, the export promotion copy and other supporting papers were consistent with the exporter's version, and the description in the disputed shipping bill was corroborated by the other documents produced. In these circumstances, the Department failed to discharge the burden of proving that the exporter had acted with a deliberate intention to misdeclare the goods. Mere suspicion, including the coincidence of loss of the shipping bill and the subsequent filing of a duplicate, was held insufficient to establish mala fides. The alleged discrepancy was accepted as a clerical error, and a penalty for a venial breach could not be sustained on such material.

Conclusion: The allegation of misdeclaration was not proved, and the penalty order was set aside in favour of the assessee.

Ratio Decidendi: Penalty for export misdeclaration cannot be sustained unless deliberate wrongdoing is proved by cogent evidence; suspicion and uncorroborated inference cannot replace proof, and a bona fide clerical error does not justify penal action.

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