1999 (6) TMI 113 - AT - Customs

Export proceeds - Repatriation of export proceeds - Misdeclaration of quantity - Valuation - Redemption fine

Summary

Issues Involved:
1. Non-repatriation of export proceeds in full.
2. Mis-declaration of the quantity of goods submitted for export and shipping bill.
3. Mis-declaration of their value on the shipping bill.

Detailed Analysis:

1. Non-repatriation of Export Proceeds:
The learned Consultant argued that the delay in repatriation of export proceeds was due to the foreign buyer and the Syndicate Bank's failure to take effective steps. A Civil Suit was filed by the appellants against both the foreign buyer and the Syndicate Bank. The Consultant contended that this issue falls under Section 18(2) of the Foreign Exchange Regulation Act (FERA), which is outside the jurisdiction of the Customs Act. Section 50 of FERA specifies that such matters should be adjudicated by the Director of Enforcement. The Tribunal agreed, noting that the Customs authority lacks jurisdiction over issues governed by Section 18(2) of FERA.

2. Mis-declaration of Quantity of Goods:
The Consultant explained that the appellants discovered tampering with the goods' packaging after they were moved to the Air Cargo Complex. They reported this to Customs and filed an FIR with the police. Upon request, a 100% examination of the goods was conducted, revealing a discrepancy between the declared and actual quantities due to tampering. The Assistant Collector of Customs allowed amendments to the shipping bills to reflect the correct quantity and value. The Tribunal found that the appellants' actions to ensure accurate documentation negated any charge of misdeclaration.

3. Mis-declaration of Value:
The Consultant argued that the allegation of overvaluation was unfounded, as the goods were examined 100% by Customs, and no discrepancies were noted at that time. The appellants had provided a letter of undertaking valid for three months, which had expired long before the Customs raised the issue of valuation. The Tribunal concurred, citing the case of J.G. Exports, which held that declared values on export goods cannot be challenged long after the fact. Additionally, the market enquiries conducted by Customs were found to be unrelated to the actual exported goods, as the cash memos referred to branded items, whereas the exported goods were unbranded. Therefore, the charge of overvaluation was not substantiated.

Redemption Fine:
The Consultant argued that imposing a redemption fine of Rs. 2.89 lakhs was illegal since the goods were not available for confiscation, having been exported years ago. The Tribunal agreed, noting that redemption fines can only be imposed when the goods are available for confiscation or if a bond with security is in place, which was not the case here.

Conclusion:
The Tribunal found that the Customs authority lacked jurisdiction over the issue of non-repatriation of export proceeds, there was no misdeclaration of quantity or value, and the redemption fine was imposed without legal basis. Consequently, the order was set aside, and the appeal was allowed with consequential relief as per law.