AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 1037
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....rmission from the Deputy Commissioner to export them using dummy IEC. It did not receive any letter permitting it to export the helicopters using dummy IEC. 2. The respondent filed the two shipping bills with dummy IEC as it had no IEC in its name. It waived the requirement of show cause notice and the Commissioner issued the impugned Spot Assessment Order. He found that the attempted export was in contravention of para 2.05 of Section (II) of Foreign Trade Policy and Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 as the helicopters could not have been exported without obtaining IEC from the DGFT. Consequently, he found that the helicopters were liable to confiscation under Section 113(d) of the Customs Act,1962 which reads as follows:- "SECTION 113. Confiscation of goods attempted to be improperly exported, etc. -The following export goods shall be liable to confiscation: (a).... (b).... (c).... (d) any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in ....
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....rected to refer to OM No. 7.12.2019-IPP dated 05.08.2019 on the subject cited above. 2. In this regard, it is stated that the matter has been examined and it is decided that IDERA holders re-exporting the aircraft under Rule 32A of Aircraft Rules, 1937 may be exempted from having IEC as the aircrafts are not actually exported from India." 7. It is his submission that there was no violation of law at all in view of the clarification by the DGFT. Learned amicus curiae assisting the court in this matter has also submitted that after the clarification has been issued by the DGFT, nothing survives in this case as the alleged violation is no longer so. The submissions by the learned counsel and learned amicus curiae deserve to be accepted. In view of the clarification issued by the DGFT, we find that there was no violation of the Foreign Trade Policy at all. 8. Learned Authorised Representative for the Revenue submits that this clarification was issued subsequent to the attempted export and can only have prospective effect and cannot be applied to the exports in question. This submission cannot be accepted. In our view, the clarification by the DGFT does not say that it sh....
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....ing is liable to, i.e., likely to or be exposed to. It suggests a likelihood of something happening. Section 113 states "the following goods attempted to be exported are liable to confiscation" and lists various types of goods under different clauses. This only means that such goods which fall under one of the clauses under this section are likely to be confiscated and can be confiscated. The section cannot be read to mean that such goods shall be confiscated. 11. The reason for this is simple. On confiscation, the property of the goods will vest in the Central Government and the individual or entity is deprived of its property which is a very serious punishment. The Adjudicating Authority has to, in the first place, decide if the goods attempted to be exported fell under one of the clauses of section 113. If they do not, this section does not apply at all. If the goods fall under one of the clauses under section 113, the goods will be liable to confiscation but the adjudicating authority must use his discretion to decide whether or not to confiscate them. Even if the adjudicating authority finds that the goods fall under one of the clauses of section 113, he does not find the o....
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....ases: 109. In Shah Rikhabdas Bharwanlal v. The Collector of Customs. (1961) (II) M.L.J. 443, identical facts situation was present. The goods of the appellants were confiscated while some other merchant for the same offences were let off with a warning. Rajmanner C.J., speaking for the Division Bench of Madras High Court, held: "It should not be overlooked that here we have the case of deprivation of property because confiscation is just that. It is idle to say that it is not, because on payment of a fine which is equal to the value of the goods, the importer can take delivery of the goods. It only means that the appellants having been deprived of their goods are given an offer to purchase such goods" (Page 4). The learned Chief Justice further observed "the language (of old Section 167 of the Sea Customs Act) does necessarily imply that there is a discretion because the language is not 'such goods shall be confiscated'. On the other hand the language is 'such goods shall be liable to be confiscated'. The Collector of Customs while enacting under Section 167 is obviously acting as a quasi judicial Tribunal, such discretion must be exercised judicially and not arbitrarily. ....
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....rson concerned in any such offence shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees. The third column says that if an offence under Item 8 is committed, the goods concerned ''shall be liable to confiscation". The learned Government Pleader had to concede that the Customs Authorities have got the discretion either to confiscate or not in a particular case. In this very case reference has been made to two other cases in which in spite of an offence having been committed, the party in each case has been let off with a warning, and without the goods being confiscated. The language does necessarily imply that there is a discretion because the language is not "such goods shall be confiscated". On the other hand the language is "such goods shall be liable to confiscation". The Collector of Customs when acting under Section 167 obviously acting in a quasi-judicial capacity. When discretion is vested in such a quasi-judicial tribunal, such discretion must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call for the drastic....