2002 (1) TMI 1236 - AT - Customs

Summary

Issues: Alleged attempt to export ineligible materials, DEEC benefits claim, penalty imposition under Customs Act

Issue 1: Alleged attempt to export ineligible materials

The appellant was issued a show cause notice for allegedly attempting to export cotton mats instead of silk and claiming DEEC benefits. The Commissioner found the appellant and another individual liable for fraudulent transactions involving the export of cotton mats instead of Mulberry Raw Silk Sarees. The Commissioner imposed a penalty of Rs. 2,00,000 on the appellant under Section 114(1) of the Customs Act, 1962.

Issue 2: DEEC benefits claim

The show cause notice proposed a penalty under Section 112(B)(ii) of the Customs Act for possessing, carrying, and selling Chinese silk yarn imported under the DEEC Scheme. However, the Commissioner concluded that the matter regarding duty levy on the goods imported through Chennai should be initiated by the Madras Customs House. Therefore, the provisions of Section 112 were not applicable to the charge of selling goods imported in contravention of the DEEC scheme.

Issue 3: Penalty imposition under Customs Act

Regarding the penalty proposed under Section 114(ii) of the Customs Act, it was noted that such penalty is applicable only to dutiable goods other than prohibited goods. In this case, the goods for export, Mulberry Silk products, and cotton mats were not dutiable. Hence, penalty under Section 114(ii) could not be imposed in this scenario. The appellant was found to have abetted another entity in violating the Customs Act, but no specific details on how the violation occurred were provided. The Commissioner concluded that the appellant did not conduct any overt acts after the preparation for export was completed. As preparation for export is not an offense under Section 113, no penalty could be imposed under Section 114 for abetting such preparation.

In conclusion, the appellate tribunal found that the penalty imposed on the appellant under Section 114 of the Customs Act could not be sustained. Therefore, the penalty was set aside, and the appeal was allowed with consequential relief to the appellant.