2023 (7) TMI 841 - AT - Customs

Confiscation - penalty - Attempt to smuggle (export) red sanders - Restricted/prohibited goods or not - HELD THAT - The Ld. adjudicating authority has ordered the confiscation of 6.78 MTS of red sanders valued at Rs.33, 90, 000/-- under Section 113(d) of the Customs Act 1962 which were attempted to be exported out of India in contravention of the provisions of the Customs Act 1962 read with the Foreign Trade (Development Regulation) Act 1992. That there is no dispute that Mr. Ramesh Treasurer of M/s. Artisan s Welfare Society has rendered the goods under export liable for confiscation by his various acts of omission and commission. In any case the exporter is not challenging the confiscation of the impugned goods. As such he is liable for penal action under Section 114(i) of the Customs Act 1962. However regarding penal action under Section 114 AA of the Customs Act 1962 investigation could not prove that the exporter knowingly or intentionally have made any false declaration statement or produced documents. All along he has been pleading that he is ignorant and is not aware that these goods are prohibited for export. The penalty imposed is disproportionate and excessive as the confiscated goods were valued at Rs.33, 90, 000/-- only. In order to meet the ends of justice in this case we feel it appropriate that the penalty imposed is reduced to Rs.5, 00, 000/-- under Section 114(i) of the Customs Act - Appeal allowed in part.

Summary

Issues Involved:

1. Confiscation of goods under Section 113(d) of the Customs Act, 1962.
2. Imposition of penalties under Section 114(i) and 114AA of the Customs Act, 1962.
3. Whether the appellant had knowledge of the prohibited nature of the goods.
4. Proportionality of the penalty imposed.

Summary:

1. Confiscation of Goods:
The appellant attempted to export wooden items, including red sanders, which were detained based on specific intelligence. The original authority confiscated the red sanders valued at Rs.33,90,000/- under Section 113(d) of the Customs Act, 1962, and allowed redemption of other goods upon payment of a fine.

2. Imposition of Penalties:
The original authority imposed a penalty of Rs.30,00,000/- on the appellant under Sections 114(i) and 114AA of the Customs Act, 1962, and a separate penalty of Rs.2 lakhs on the CHA. The appellant contested only the penalty imposition.

3. Knowledge of Prohibited Nature:
The appellant argued that they were unaware the wooden pillars were made of red sanders, believing them to be country wood. The adjudicating authority found no evidence of deliberate intent to export prohibited goods, noting that the appellant did not know the species of the wood.

4. Proportionality of Penalty:
The Tribunal found that the penalty imposed was disproportionate and excessive given the value of the confiscated goods. The penalty was reduced to Rs.5,00,000/- under Section 114(i) of the Customs Act, 1962, as the investigation did not prove intentional false declarations by the appellant under Section 114AA.

Conclusion:
The appeal was partially allowed, reducing the penalty to Rs.5,00,000/- while maintaining the confiscation order.