1995 (4) TMI 169 - AT - Customs

Summary

Issues Involved:
1. Dispensation of pre-deposit of penalties.
2. Confiscation of goods under Section 113(d) of the Customs Act.
3. Liability to penalty under Section 114(i) of the Customs Act.
4. Interpretation of prohibition under Section 113(d) and Section 11 of the Customs Act.
5. Compliance with Section 50(2) of the Customs Act and Section 18(1)(a) of the Foreign Exchange Regulation Act.
6. Role and culpability of various applicants in the attempted export.

Detailed Analysis:

1. Dispensation of Pre-Deposit of Penalties:
The applicants sought dispensation of pre-deposit of penalties levied under the impugned order. The penalties ranged from Rs. 50,000 to Rs. 50,00,000 for different applicants. The Tribunal considered the financial hardship and the role of each applicant in the attempted export while deciding on the pre-deposit requirements.

2. Confiscation of Goods under Section 113(d) of the Customs Act:
The lower authority confiscated 136 packages declared to contain video cassettes, audio cassettes, and ballpoint pens, valued at Rs. 11,48,44,574. Upon examination, the goods were found to be either scrap or not conforming to the declared quality, valued at Rs. 3,38,480. The confiscation was based on gross over-valuation under Section 113(d) of the Customs Act, 1962.

3. Liability to Penalty under Section 114(i) of the Customs Act:
The applicants were held liable to penalty under Section 114(i) of the Customs Act, 1962, for the gross over-valuation and misdeclaration of the goods. The Tribunal noted that the applicants sought to export inferior goods by grossly over-valuing them to obtain import entitlements under the D.E.C. Scheme. The penalties were considered in light of the value ascertained by the authorities.

4. Interpretation of Prohibition under Section 113(d) and Section 11 of the Customs Act:
The learned Consultant argued that the goods could not be confiscated under Section 113(d) as there was no prohibition imposed under the Customs Act or any other law. The Tribunal, however, interpreted the prohibition to include violations of Section 18(1)(a) of the Foreign Exchange Regulation Act, 1973, which requires a true declaration of the export value. The Tribunal held that the goods were prohibited under the Foreign Exchange Regulation Act, making them liable to confiscation under Section 113(d).

5. Compliance with Section 50(2) of the Customs Act and Section 18(1)(a) of the Foreign Exchange Regulation Act:
Section 50(2) of the Customs Act requires the exporter to declare the truth of the contents of the shipping bill. The Tribunal observed that the applicants' declaration was false, violating Section 18(1)(a) of the Foreign Exchange Regulation Act. This violation was deemed a restriction under Section 11 of the Customs Act, making the goods liable to confiscation and the applicants liable to penalty.

6. Role and Culpability of Various Applicants in the Attempted Export:
The Tribunal examined the role of each applicant in the attempted export. M/s. Exotic Fashions and M/s. Galaxy International, along with Shri Javed Alam, were found to have played major roles. They were directed to pre-deposit Rs. 10,00,000 each for the firms and Rs. 5,00,000 for Shri Javed Alam. Other applicants, including partners and certain individuals, were granted waiver of pre-deposit due to the lack of specific discussion about their roles. Shri Munilal Mehra and Shri Prasad R. Sawant were required to pre-deposit Rs. 20,000 each due to their significant involvement.

Conclusion:
The Tribunal directed specific pre-deposit amounts for various applicants based on their roles and involvement in the attempted export. The goods were held liable to confiscation under Section 113(d) of the Customs Act, and the applicants were liable to penalty under Section 114(i) due to the violation of the declaration requirements under the Customs Act and the Foreign Exchange Regulation Act. The matter was scheduled for compliance reporting on 29th June, 1995.