TaxTMI 
TaxTMI 
TaxTMI 
2001 (7) TMI 607
X X X X Extracts X X X X
X X X X Extracts X X X X
....or alternatively for home consumption on payment of a fine of Rs. 1,10,000/- (Rupees one lakh and ten thousand only). I also imposed a penalty of Rs. 22,000/- (Rupees twenty two thousand only) under Section 114(i) of Customs Act, 1962 on the exporter in respect of Shipping Bill No. 1367, dated 16-10-1995. I hold the goods under cover of Shipping Bill Nos. 3293/31-7-1995, 3294/31-7-1995, 758/9-8-1995, 759/9-8-1995, 1861/21-8-1995, 879/11-9-1995, 2387/27-9-1995, 385/6-10-1995, 386/6-10-1995, 710/10-10-1995, 2246/20-10-1995 and 316/4-11-1995 totally valued at Rs. 30,18,009/- (FOB) as liable for confiscation under Section 113(i) of Customs Act, 1962 read with Section 50(2) of Customs Act, 1962 and also under Section 113(d) of Customs Act, 1962 read with Sections 18(1)(a) and 67 of Foreign Exchange Regulation Act, 1973 as also read with Section 3(3) of Foreign Trade (Development and Regulation) Act, 1992. I, however, note that the above offending goods in respect of which the exporters succeeded in their attempt of export are not physically available for confiscation and as such as I take into account this aspect also while imposing penalty and I impose a sum of Rs. 3,50,000/- (Rupee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e powers conferred to the Central Government under Section 19 of the Foreign trade (Development and Regulation) Act, 1992, no person shall employ any corrupt and fraudulent practice for the purpose of obtaining any licence or importing or exporting any goods. In the instant case there is a clear-cut and deliberate attempt on the part of the exporter/Advance Licence applicant to manipulate the Shipping Bills for duty free import benefit of polypropylene granules under Advance Licence to be issued under DEEC Scheme on completion of Export obligation. Therefore, all the exports made by the exporter manipulating the description of goods as "Articles made of Polypropylene" will not qualify for discharge of Export obligation, as per para 49 of EXIM policy which is deemed to have been issued under Section 5 of Foreign Trade (Development and Regulation) Act, 1992 and which stipulates that, it is obligatory on the part of the Advance Licence applicant to achieve both quantity and value and as per para 59 of the said policy the responsibility to fulfil the export obligation lies solely on the applicant exporter, and in this case the exporter has attempted to discharge Export obligation by ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9-1995, 385/6-10-1995, 386/6-10-1995, 710/10-10-1995, 1367/16-10-1995, 2246/20-10-1995 and 316/4-11-1995 totally valued at Rs. 34,75,075/- should not be disallowed for discharge of Export obligation for violation of Section 50(2) of Customs Act, 1962 read with Rules 11 and 14(2) of Foreign Trade (Regulation) Rules, 1993 issued under Section 19 of Foreign Trade (Development and Regulation) Act, 1992 and also Sections 18 and 67 of Foreign Exchange Regulation Act, 1973 and further as to why they should not be held liable for confiscation under Section 113(d) and 113(i) of Customs Act, 1962 also read with Section 3(3) of Foreign Trade (Development and Regulation) Act, 1992 for the arforesaid violation. (iii) Why penalty should not be imposed on M/s. M.M. Exports, who have resorted to misdeclaration in value, material of manufacture and also sought to export more quantity than even what was applied for under the Advance Licence application with an intention to obtain excessive benefits by resorting to misdeclaration in weight and material of make, in addition under Section 114(i) of Customs Act, 1962. (iv) Why penalty should not be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ho had shown their working indicating an import price of US $ 2248 per metric tonne in their advance licence application for issue of a value based advance licence, however claimed that the import price is only US $ 800 per MT. CIF, hence they are charged with an offence of seeking to obtain undue import duty benefit. He has noted in page-21 of his order after quoting the para-49 of the Advance Licence that "on the one hand, this looks paradoxical while on the other, a plausible inference could be drawn that the likely inflation of import price of input in the advance licence application for obtaining a VBAL for a like value is to seek the benefit of additional gains by way of flexibility admissible to VBAL in terms of para 49. 5. He has further observed in his order impugned as follows :- The above trend of over-valuation of import item in VABAL application for obtaining excess gains by way of entitlement to import both sensitive and non-sensitive items in terms of flexibility criteria has already been cautioned vide public notice No. 106/96, dated 18-6-1996 of Mumbai Custom House, a relevant extract of which is reproduced below :- "(1) Attention of all i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he input/output and value addition norms in force on the date of receipt of the application by the licensing authority in proportion to the provisional exports already made till any amendment in the norms is notified. For the remainder of the exports, the policy/procedure in force on the date of issue of the licence shall be applicable. The conversion of duty free shipping bills to drawback shipping bills may also be permitted by the Customs authorities in case the application is rejected or modified by the licensing authority. The exports/supplies made in anticipation of the grant of a duty free licence shall be entirely on the risk and responsibility of the exporter". The exporters in this case preferred an application dated 21-6-1995 for a VBAL in relation to their export of articles made of polypropylene seeking duty free import entitlement of polypropylene as per input-output norms. The application was made specifically for polypropylene and not for HDPE. The exporters had in fact indicated polypropylene conspicuously in their application scoring out HDPE originally seen to have been typed. When the facts of excess declaration in weight of goods under attempt of export and th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sis where the mistake arises not an account of fraudulent means adopted by the exporter. In the instant case, the goods are prima facie not sent on consignment basis, but under a claim for issue of a VBAL under DEEC Scheme which would procure considerable export duty free entitlement benefits to the exporters. It has already been pointed out that owing to a misdeclaration of weight and material of make of the goods attempted to be exported under Shipping Bill No. 1367, dated 16-10-1995 alone, there arises an undue import duty-free benefit of Rs. 4,46,421/-. This is apart from such undue benefits in respect of their past and a few subsequent exports. The mistake in declaration in this case is not at all to be deemed minor and bona fide. Moreover, Rule 11 of Foreign Trade (Regulation) Rules, 1993 stipulates that the owner of the goods under exportation shall state the value, quality and description of the goods and certify as to the correctness of the details in the documents. Besides as per Rule 14(2) ibid, no person shall employ any corrupt and fraudulent practice for the purpose of obtaining any licence. In the instant case, there is a clear-cut and deliberate attempt on the part ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llector indicating the provisions of law under which the export was prohibited. Moreover in the case law under reference, the difference in weight came to be known subsequent to passing of the Shipping Bill and at the stage where the air way bill for export was amended regarding weight based on actual weighment of the goods. Whereas in the instant case, the Department detected the excess declaration of weight well in time before the goods could be shipped. This apart, the goods sought to be exported were different from the ones declared being of HDPE make as against polypropylene declared in the documents. Due to these various differential features as pointed out above, besides the basic aspect of not indicating the reasons for deeming the goods as prohibited in particular, the claim of the exporter that the case of their present export is on all force with the case law under reference is not sustainable. Moreover it is of significance to note that the exporters have since shifted their claim to one of drawback on the goods in question in lieu of DEEC. I observe herein that Section 113(i) of Customs Act, 1962 invoked in the instant case refers inter alia to goods under claim for d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....quer and such committal of offences are due to 'inadvertence', therefore there has to be no penalty in the matter. 8. On being confronted with the Larger Bench judgment of Om Prakash Bhatia v. CC Delhi of five members of the Tribunal reported in 2001 (127) E.L.T. 81 (Tri.-LB) where in a similar circumstances, the Tribunal upheld the offences and also as a consequence upheld the confiscation and imposition of RF & penalty; and also on being confronted with the judgment of the Tribunal rendered in Ratan Exports & Others - 2000 (123) E.L.T. 808 (T) = 1999 (80) ECR 677 wherein the Tribunal upheld the confiscation of goods and imposition of fine and penalty on similar misdeclaration in the export shipping bill and allowed Revenue appeal enhancing the penalty from Rs. 1 lakh to Rs. 10 lakhs on the manufacturer and Rs. 1 lac to Rs. 5 lakhs on the merchant-exporter and also it was pointed out that these judgments have since been confirmed by the Apex Court, ld. Counsel points out in the cited case of Ratan Exports & Indus. Ltd. & Ors. v. CC Chennai reported in 2000 (123) E.L.T. 808 (T) = 1999 (80) ECR 677 (T), the intention to evade was manifest and clear inasmuch the goods required ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the order. He further points out that appellants are not contesting on merits but are only taking the plea of mis-declaration having been taken place due to 'inadvertence'. He submits that under the Customs Act, once there is a misdeclaration, the question of "guilty" or "inadvertence" does not arise at all and the goods become tainted and confiscable goods. Under Sec. 111 read with Sec. 125 of the Customs Act, the officer has got powers to confiscate and also release the same on payment of fine which could be appropriate and it can be even five times the value. He submits that in the present case, a very lenient view has been taken. He refers to the judgment of the Apex Court in Jain Exports Pvt. Ltd. v. U.O.I. - 1993 (66) E.L.T. 537 (S.C.), wherein the Apex Court has laid down that bona fide action of assessee by itself cannot entitle him to claim full waiver of fine. He, therefore, submits that appellants do not have any case viewed from any angle and hence appeals are required to be dismissed. 11. On a very careful consideration of all the pleas raised by the ld. Counsel both orally as well as appellants arguments both written and oral raised before the Commissioner and a....