Over-invoicing in export declarations does not by itself constitute a foreign exchange offence or justify customs confiscation.

Over-invoicing in an export declaration was treated as distinct from under-invoicing and from cases involving incorrect particulars in declarations under earlier foreign exchange law. The Tribunal held that over-invoicing by itself does not constitute an offence under Section 18(1)(a) of the Foreign Exchange Regulation Act, 1973. As no foreign exchange offence was made out, the deeming provision in Section 67 of that Act did not convert the conduct into a prohibition under Section 11 of the Customs Act, 1962. Confiscation of goods and the penalty imposed under the Customs Act were therefore unsustainable.

---

---

Issues: Whether over-invoicing in an export declaration constitutes an offence under Section 18(1)(a) of the Foreign Exchange Regulation Act, 1973, and whether such alleged contravention can sustain confiscation and penalty under the Customs Act, 1962 by virtue of Section 67 of the Foreign Exchange Regulation Act, 1973.

Analysis: The Tribunal noted that the controversy concerned over-invoicing, not under-invoicing. It distinguished the authorities relied upon by the Revenue, including decisions dealing with incorrect particulars in declarations and cases under the older foreign exchange law, and treated them as not governing the present facts. Accepting the authority relied upon by the appellant, it held that over-invoicing by itself does not amount to an offence under Section 18(1)(a) of the Foreign Exchange Regulation Act, 1973. Since no offence under the foreign exchange law was made out, the deeming provision in Section 67 of that Act did not convert the conduct into a prohibition under Section 11 of the Customs Act, 1962.

Conclusion: The alleged over-invoicing was not an offence under Section 18(1)(a) of the Foreign Exchange Regulation Act, 1973, and the confiscation of goods and penalty imposed under the Customs Act, 1962 were unsustainable.

---