False export declaration and overvaluation can trigger prima facie confiscation and penalty under customs law.

Grossly inflated export value and an incorrect goods description were treated as prima facie non-compliance with the truthful declaration requirement in the shipping bill. The export-value restriction under FERA, read with the relevant notification and section 67 of FERA, was treated as a prohibition for customs purposes, bringing the goods within the scope of prohibited goods. On that basis, the goods were held prima facie liable to confiscation under section 113(d) of the Customs Act and the appellants prima facie liable to penalty under section 114(i). The applications for stay were disposed of by directing only partial pre-deposit, with different amounts fixed according to the apparent role of each appellant.

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Issues: (i) Whether goods exported with grossly inflated value and incorrect description were prima facie liable to confiscation under section 113(d) of the Customs Act, 1962 and to penalty under section 114(i) of that Act; (ii) what pre-deposit, if any, should be directed in respect of the penalties imposed on the appellants.

Issue (i): Whether goods exported with grossly inflated value and incorrect description were prima facie liable to confiscation under section 113(d) of the Customs Act, 1962 and to penalty under section 114(i) of that Act.

Analysis: The export declarations were found prima facie incorrect as to both description and value. The statutory obligation under section 50(2) of the Customs Act, 1962 required a truthful declaration in the shipping bill. The restriction on export value under section 18(1)(a) of the Foreign Exchange Regulation Act, 1973, read with the notification issued thereunder, was treated as a prohibition for the purposes of section 11 of the Customs Act, 1962 by virtue of section 67 of the Foreign Exchange Regulation Act, 1973. On that basis, the goods were treated as prohibited goods for customs purposes.

Conclusion: The goods were held prima facie liable to confiscation under section 113(d) of the Customs Act, 1962, and the appellants were held prima facie liable to action under section 114(i) of the Customs Act, 1962.

Issue (ii): What pre-deposit, if any, should be directed in respect of the penalties imposed on the appellants.

Analysis: The order assessed the relative role of the different appellants in the attempted export and granted different levels of waiver accordingly. Substantial pre-deposit was directed only for the entities and individual found to have played a major role, while full waiver was granted to certain partners against whom no specific role was recorded. A limited pre-deposit was fixed for the remaining appellants with waiver of the balance pending appeal.

Conclusion: Pre-deposit of Rs. 10,00,000 each was directed for M/s. Exotic Fashions and M/s. Galaxy International, Rs. 5,00,000 for Shri Javed Alam, full waiver was granted to Shri Shane Alam, Smt. Noorjahan Nawas Alam, Shri Ahteshram Alam and Smt. Zarine Alam, and Rs. 20,000 each was directed for Shri Munilal Mehra and Shri Prasad R. Sawant, with waiver of the balance pending appeals.

Final Conclusion: The applications were disposed of by granting only partial waiver of pre-deposit, while sustaining the prima facie view that the export misdeclaration attracted confiscation and penalty provisions.

Ratio Decidendi: A false export declaration involving gross overvaluation and incorrect description can, where the export restriction is deemed to be a prohibition under customs law, render the goods prima facie liable to confiscation and the exporter liable to penalty.

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