Imposition of redemption fine and penalty not justified when there was no mis-declaration of exported goods.

PJ/Case Law/2012-13/2035

Case:- TRADE WIDE EXPORTS V/S COMMISSIONER OF CUSTOMS, MANGALORE

Citation:- 2013 (297) E.L.T. 405 (Tri.-Bang.)

Brief Facts:- The appellant filed a shipping bill for export of 1900 pieces of casuarina wood poles (central poles for building construction). They also indicated the size of each pole on 12 feet and diameter 3.5 inches and above at one end. The consignment was examined and allowed to be stuffed in the container and the officer examining the consignment did not indicate any difference of opinion as regards the declaration given by the appellant as far as the description as well the classification of the poles which was indicated by them as CTH 4403 20 20 was also accepted. After ‘Let Export’ was given, the consignment was intercepted by the DRI and consequently, proceedings were initiated which has resulted in confiscation of the goods and imposition of redemption fine of Rs. 50,000/- and penalty of Rs. 50,000/- taking a view that the item which was presented for export has to be considered as “fresh cut casuarina wood in rough logs with bark”. The appellant is seeking stay against recovery of the penalty and is in appeal against the impugned order. Both sides were heard for considerable time and the matter was also considered in sufficient depth. Both sides agree that the matter can be decided finally at this stage itself. Accordingly, the requirement for pre-deposit is waived and the appeal is taken for final decision.

Appellant’s Contention:-The appellant contended that there was a NOC issued by Deputy Conservator of Forest Department, Mangalore Division who after taking note of the item being exported and considering the law as applicable has issued NOC for export. Further, he pointed out the clarification issued by DGFT who has also taken a view that the items proposed to be exported are not covered by the Foreign Trade Policy.

Respondent’s Contention:-The Respondents relied upon the test report, according to which the samples were considered as wood and containing bark to an extent of 3-5% and species was identified as casuarina. They submitted that the report indicating that the sample of wood goes against the assessee because wood in primary form is classifiable under 4401 of ITC (HS) and according to Foreign Trade Policy, the wood classified under 4401 are prohibited for export. Further, they contended that the clarification was received by the appellants by making an application under RTI Act and accordingly, reply given under RTI Act cannot be considered as valid.

Reasoning of Judgment:- The Hon’ble Tribunal held that it is not in dispute that the appellant had exported four consignments earlier which were allowed by the customs authorities. Further, the facts discussed above clearly shows that the Forest Department did not consider the items as prohibited. It also shows that the examining authorities of customs and the assessing officers also did not consider the goods as prohibited. It is not even the case of the Revenue that the goods were allowed without examination, which can happen in the case of exports on many occasions. After considering the shipping bill and the documents and the records, they also find that the description furnished by the appellant also cannot be considered as inapplicable to the goods proposed to be exported. In fact, the casuarina poles can be fresh cut wood with some bark also depending upon the age of the tree and the nature, quality of the tree. Under these circumstances, it cannot be said that appellant have mis declared the description. They do not agree with the submissions that a reply given under RTI Act cannot be given any authenticity or value. If that is the case, there is no use for seeking information under RTI Act. If the Government Departments are going to give wrong information under RTI and information given under RTI Act cannot be relied upon, it will be totally against the concept under which the RTI Act was brought out in statute book. Under these circumstances, they consider that the opinions given by the DGFT and the NOC issued by the Forest Department also support the case of the appellant that there was no intention to export the prohibited goods and there was no misdeclaration. The appellant at this stage fairly submitted that he does not want any decision as to whether the goods are prohibited or not. Therefore they are not going into the question as to whether the subject goods are prohibited ones or not. The question of law is therefore kept open.
The above discussion clearly shows that even if the goods were prohibited, the customs authorities as well as the appellants genuinely believed that the same was not prohibited. In the absence of any misdeclaration or deliberate attempt to export goods which are prohibited without having any ground for a belief that the same are not prohibited, imposition of fine and penalty cannot be sustained. Accordingly, the confiscation is set aside and redemption fine and penalty are also consequently set aside. The goods shall be allowed to be taken back into the country by the customs authorities without any further delay. Thus, the stay application and appeal are allowed in above terms.

Decision:- The appeal along with stay application was allowed.

Comment:-It was held in this decision that the clarification issued by the DGFT and information obtained under RTI Act, 2005 that the item proposed to be exported is not prohibited under Foreign Trade Policy cannot be simply rejected as invalid evidence without giving proper reasons for the same. Further, since the Custom authorities and the exporter genuinely believed that the goods were not prohibited, in the absence of any misdeclaration, imposition of redemption fine or penalty cannot sustain.

Comments

PJ/Case Law/2012-13/2035

Post a Comment

Query