Export misdeclaration and scope of show-cause notice govern penalty, with agent's penalty set aside for lack of specific allegations.

Export misdeclaration was upheld where the shipping bill and weighment record showed a substantial mismatch between the declared and actual quantity of goods; penalty remained imposable, though reduced in view of the circumstances and the duty benefit said to have accrued. Penalty on the customs house agent was set aside because the show-cause notice was confined to proposed licence suspension and did not specifically allege the factual basis for penalty. Adjudication must stay within the scope of the notice, and penalty cannot be sustained without clear allegations supporting it.

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Issues: (i) Whether the finding of misdeclaration in the shipping bill and the resulting liability to confiscation and penalty were sustainable. (ii) Whether the penalty on the customs house agent was sustainable when the show-cause notice did not contain a specific allegation for penalty.

Issue (i): Whether the finding of misdeclaration in the shipping bill and the resulting liability to confiscation and penalty were sustainable.

Analysis: The export documents and the weighment record showed a substantial discrepancy between the declared and actual quantity of goods. The legal position on misdeclaration in export matters had already been settled, and the violation was treated as established for the purpose of penalty. The appellants did not seriously contest the merits, and the finding of misdeclaration was maintained. The only relief granted on this aspect was reduction of the quantum of penalty in view of the circumstances and the duty benefit stated to have accrued.

Conclusion: The finding of misdeclaration was affirmed, and penalty was held imposable, but the penalties on the exporter and manufacturer were reduced.

Issue (ii): Whether the penalty on the customs house agent was sustainable when the show-cause notice did not contain a specific allegation for penalty.

Analysis: The notice against the customs house agent was confined to the proposed suspension of the licence and did not expressly allege facts forming the basis for penalty. Adjudication must remain within the scope of the notice, and in the absence of a penalty allegation, penalty could not be imposed on the customs house agent.

Conclusion: The penalty on the customs house agent was set aside.

Final Conclusion: The order was modified by confirming the misdeclaration finding, reducing the penalties on the exporter and manufacturer, and cancelling the penalty imposed on the customs house agent.

Ratio Decidendi: Adjudication cannot travel beyond the allegations contained in the show-cause notice, and penalty cannot be sustained where the notice does not specifically allege the factual basis for such penalty.

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