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2024 (3) TMI 1424 - AT - CustomsConfiscation of the seized goods redemption fine and the penalty - contravention of provisions of Section 113(i) of the Customs Act 1962 by exporting goods that did not correspond in respect of value or material particulars - abetment in the contravention of the EPCG license - HELD THAT - It is found from the records that the EPCG licence holder was M/s. Print Zone and we are given to understand that against the penalties imposed and duty confirmed on Print Zone no further appeal was filed by them. In the present case the EPCG licence holder is Print Zone who has definitely contravened the provisions by not disclosing the details of supporting manufacturer. It is further found that the appellant has exported the goods under proper Shipping Bills and they have also realised the export proceeds. There is no allegation from the Revenue s side that the exports have not taken place or realization has not come back to the appellant. In such a case it is not found that the appellant could be fastened with any allegation towards contravention of Section 113 (i) of the Customs Act 1962. Confiscation of the goods - penalty - HELD THAT - The goods are already exported and hence they are not available physically for confiscation. The ratio of cited case law of COMMISSIONER OF CUSTOMS CENTRAL EXCISE SERVICE TAX HYDERABAD II VERSUS G.M.K. PRODUCTS PVT LTD. 2020 (2) TMI 234 - CESTAT HYDERABAD squarely apply to the facts of the present case. Consequently confiscation of the exported goods is not justified and so also the Redemption fine imposed. As there is not contravention on the part of M/s. Rup Exports they are not liable to penalty under Section 114 (iii) 114AA 117 of the Customs Act 1962. Conclusion - The appellant did not violate Section 113(i) and thus the confiscation of goods redemption fine and penalties were unwarranted. Appeal allowed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents The primary legal framework involves Section 113(i) of the Customs Act, 1962, which pertains to the confiscation of export goods that do not correspond in respect of value or material particulars with the entry made under the Act. The judgment also references Section 111(m) of the Customs Act, which is similar in context but pertains to the import of goods. The case law of Northern Plastic Ltd. vs. Collector of Customs & Central Excise was cited, which discusses the burden of proof on the Department to demonstrate misdeclaration of goods. Court's interpretation and reasoning The Tribunal examined whether the appellant's export actions violated Section 113(i). It interpreted the provision to require a clear discrepancy in the declared and actual particulars of the goods for confiscation to be justified. The Tribunal found that the exports were conducted under proper shipping bills, and the proceeds were realized, indicating no misdeclaration or discrepancy in the export process. Key evidence and findings The investigation revealed that M/s. Print Zone, the EPCG license holder, outsourced manufacturing to M/s. Snehraj Notebook Industries without disclosing this in the license. However, there was no evidence that the appellant was involved in or aware of this arrangement, beyond their role as an exporter. The Tribunal noted the absence of any allegation that the exports did not occur or that proceeds were not realized. Application of law to facts The Tribunal applied the legal principles from the cited case law, determining that the burden of proof was on the Revenue to show misdeclaration or discrepancy, which was not established in this case. The goods were already exported, rendering physical confiscation moot, and the Tribunal found no basis for imposing redemption fines or penalties on the appellant. Treatment of competing arguments The appellant argued that Section 113(i) was inapplicable as there was no discrepancy in the export particulars, supported by the Northern Plastic Ltd. precedent. The Revenue contended that the appellant failed in due diligence regarding the manufacturing capacity of M/s. Print Zone. However, the Tribunal sided with the appellant, emphasizing the lack of evidence for contravention or abetment. Conclusions The Tribunal concluded that the appellant did not contravene Section 113(i) and that the confiscation, redemption fine, and penalties were unjustified. The appeal was allowed, and the impugned order was set aside. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning The Tribunal referenced the Supreme Court's reasoning in Northern Plastic Ltd.: "The charge of misdeclaration of goods was based upon Section 111(m) of the Customs Act... Therefore, if the description of the imported goods given to the customs authorities does not correspond in respect of value or in any other particular including its description as mentioned in the Entry made under the Act, then only they can be said to have been misdeclared and, therefore liable to confiscation." Core principles established The Tribunal reaffirmed that the burden of proof lies with the Revenue to demonstrate any discrepancy or misdeclaration in the export particulars. It also established that goods already exported cannot be confiscated, and penalties cannot be imposed without evidence of contravention. Final determinations on each issue The Tribunal determined that the appellant did not violate Section 113(i), and thus, the confiscation of goods, redemption fine, and penalties were unwarranted. The appeal was allowed, and the appellant was granted eligibility for any consequential relief as per law.
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