TMI Blog2015 (10) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the order passed by the Customs, Excise and Service Tax Appellate Tribunal are admitted by this Court on the following substantial questions of law: 1. Whether the Tribunal is correct in holding that Section 113 cannot be invoked for confiscation of goods already exported? 2. Whether the Tribunal is correct in the interpretation of law i.e. interpretation of Section 113, which reads: Confiscation of goods attempted to be improperly exported... . Whether 'successful attempt' of the improperly exported goods does cease to be 'attempted to be improperly exported'? 2. After hearing the arguments of both sides, on the previous occasion, we thought it fit to re-frame the questions of law. Accordingly, the questions of law admitted by this Court are reframed as follows: 1. Whether the Tribunal was correct in holding that Section 113 of the Customs Act cannot be invoked for confiscation of goods already exported? 2. Whether the Tribunal was justified in setting aside the order of penalty on the exporter under Section 114 of the Customs Act? 3. We have heard both sides at length on the re-framed questions of law. 4. The brief facts leading t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 19 of the Foreign Trade (Development and Regulations) Act, 1992, no person shall employ any corrupt or fradulent practice for the purpose of obtaining any licence or importing or exporting any goods. In the present case, there is a clear cut and deliberate attempt on the part of the exporter that 73.476 Mts. of Cassia valued at ₹ 26,71,587 cleared duty free under Bill of Entry No.24969 dated 16.7.93; 27046 dated 30.7.93, 29539 dated 18.8.93 and 29579 dated 18.8.93 against advance licence No.P/K 3528067 dated 17.3.92 were not used in the process of extracting Cassia Oil for export. Instead 735 Kgs of cheap castor oil mixed with synthetic oil under the guise of cassia oil had committed. This appears to operate as a prohibition under section 113(d) of Customs Act, 1962 read with section 3(3) of Foreign Trade (Development and Regulation) Act, 1992 and the rules made there under by virtue of powers conferred on Central Government under Section 19 of Foreign Trade (Development Regulation) Act, 1992; d. that the exporters M/s.K.Kamala Bai, Madras, its proprietrix Mr.K.Kamala Bai, a. there is a clear misdeclaration of the description of the goods entered for exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92 and also Foreign Exchange Regulation Act, such acts abets ultimately led to the successful attempt of exporting goods which were liable for confiscation as aforesaid and are consequently liable for a penalty under Section 114(i) of Customs Act, 1962; and e. that the Custom House Agent M/s. S. Ukkirapandian Pillai Sons, Tuticorin attempted to export the goods improperly representing M/s. K. Kamala Bai, Madras - 1 and hence they are liable for penal action under section 114(i) of Customs Act, 1962 also read with Section 147 of the Customs Act, 1962 wherein there is an inherent liability on the agent on behalf of the exports. 8. Now therefore, M/s. K. Kamala Bai, Madras, the proprietrix Mrs. K. Kamala Bai, Shri. C. Kantilal, M/s. Sha Devi India, Madurai, Shri. K.R. Ramesh Babu K.R. Ravi Shankar Babu, M/s.Deluxe Road lines, Madras Lalith D.Shah and M/s. S. Ukkirapandian Pillai Sons, Tuticorin are hereby required to Show Cause to the Commissioner of Customs, No.4A, Dindigul Road, Trichy within 30 (thirty) days of receipt of this notice as to why; i) the goods covered by the shipping Bill No:1758 dated 19.1.94 valued at ₹ 42,51,030 should not be held liable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 114(1) of the Customs Act, 1962 read with Section 147 of the Customs Act, 1962. 123. Though the Castor Oil has been exported under the Shipping Bill No.1755 dated 19.1.94 in the guise of Cassia Oil, inspite of the fact liability for confiscation exists, under Section 113(i) read with Section 50(2) of the Customs Act, 1962 read with Section 18(1)(a) and Section 67 of the Foreign Exchange Regulation Act, 1973 read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992 in as much as these goods are not available for confiscation, there is no point in ordering confiscation of the same. However the liability for penal action on the exporter is warranted for this misdeclaration. 8. Aggrieved by the order of the Adjudicating Authority, the appellant as well as the first respondent herein preferred appeal before the Tribunal. 9. The Tribunal, after considering the submissions made on both sides held that once the goods were exported, confiscation under Section 113 of the Customs Act would not arise and as as result, the penalty also would be set at naught. For better clarity, we extract below the relevant portion of the order of the Tribunal: 4. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty gets dismissed. 10. Aggrieved by the order of the Tribunal, the Revenue is before this Court. 11. Learned Standing Counsel appearing for the Revenue submitted that misdeclaration of goods exported prima facie makes such goods prohibited in terms of Sections 18(1)(a) and 67 of the Foreign Exchange Regulations Act, 1973. He further submitted that there is a clear misdeclaration of the description of the goods entered for exportation in the Shipping Bill, the goods are liable for confiscation under Section 113 of the Customs Act. 12. Learned counsel appearing for the respondent/assessee submitted that the goods already exported were not liable for confiscation under Section 113 of the Customs Act. Consequently, the exporter could not be penalised under Section 114 of the Customs Act. 13. Heard learned Standing Counsel appearing for the Revenue and the learned counsel appearing for the assessee and perused the materials placed before this Court. 14. It is seen from the facts narrated that in this case, the exporter had furnished false material particulars in the prescribed form for the export of Cassia Oil. In fact, the investigation clearly proved that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of merit. An attempt to commit suicide is indeed an offence and the act of committing suicide resuling from the successful attempt may not be considered to be an offence. This is so for the simple reason that once a person attempting to commit suicide succeeds in his attempt he places himself beyond the reach of law and no punishment is intended to be inflicted on the dead person or his heirs and legal representatives by imposing any fine or penalty, as they may in no way be liable or responsible for the said act. As we have earlier observed the liability of the goods to confiscation arises under Section 113 (d), as soon as the goods are attempted to be exported and the attempt to export the goods necessarily precedes the actual export of the goods. Goods become liable to confiscation as soon as the attempt is made. There is no provision in the Act to suggest that this accrued liability is wiped out or extinguished with the exportation of the goods. It may be that after the goods had in fact been exported the liability of the goods to be confiscated may not be enforceable by actual confiscation of the goods. Personal penalty of any person who, in relation to the goods, does or omit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to prohibition under the above Notification No.G.S.R. 2641 dated 14-11-1969. By virtue of Section 23A the prohibition also falls, under Section 11 of the Customs Act, 1962, and hence the goods were liable to confiscation under Section 113(d) and (1) of the Customs Act, 1962. M/s. Euresian Equipments and Chemicals Ltd., Calcutta, S/Sri Laxmi Prasad Jajodia, Manick Chand Jajodia and Jugal Kishore Jajodia were the persons concerned for the mis-declaration of the goods and values of the goods exported and hence liable for penal action u/s 114(1) of the Customs Act, 1962, 110. M/s. Euresian Equipments and Chemicals Ltd., Calcutta and its directors S/Sri Laxmi Prasad Jajodia, Manick Chand Jajodia and Jugal Kishore Jajodia were called upon to explain the matter in writing and to show cause to the Collector of Customs, Calcutta, why penal action under Section 114 of the Customs Act, 1962 should not be taken against them. 16. The validity of the above-said show cause notice was challenged by the exporter in a Writ Petition. Learned single Judge dismissed the Writ Petition holding that if the export is made on the basis of incorrect declaration under Section 12(1) of the Foreign Exch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be an offence.This is so for the simple reason that once a person attempting to commit suicide succeeds in his attempt he places himself beyond the reach of law and no punishment is intended to be inflicted on the dead person or his heirs and legal representatives by imposing any fine or penalty, as they may in no way be liable or responsible for the said act. As we have earlier observed the liability of the goods to confiscation arises under Section 113 (d), as soon as the goods are attempted to be exported and the attempt to export the goods necessarily precedes the actual export of the goods. Goods become liable to confiscation as soon as the attempt is made.There is no provision in the Act to suggest that this accrued liability is wiped out or extinguished with the exportation of the goods. It may be that after the goods had in fact been exported the liability of the goods to be confiscated may not be enforceable by actual confiscation of the goods. Personal penalty of any person who, in relation to the goods, does or omits to do any act which act or omission renders the goods liable to confiscation under Section 113 or abets the doing or omission of such an act has been pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (19) of the Act. Actual export of the goods, as a result of the attempt succeeding subsequent to the stage of the attempt, is not indeed of any material consequence. The goods are export goods as defined in Section 2(19) of the Customs Act, 1962 at the time the goods incur the liability to confiscation under Section 113 of the said Act. We accordingly answer the second question which came up for consideration before the Division Bench and which has been referred to the Full Bench in the manner indicated above. (Emphasis Supplied) 18. The Full Bench has clearly held that even in respect of goods already been exported, the provisions of Section 113(d) of the Customs Act would stand attracted and Penalty under Section 114 is justified. 19. Section 113(d) provides that any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force shall be liable to be confiscated. 20. The reasoning of the Full Bench of the Calcutta High Court is that the goods are liable for confiscation as soon as an attempt is made. We are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igence or default of the exporter his agent or employee, or which after having been loaded for exportation are unloaded without the permission of the proper officer; (l) any specified goods in relation to which any provisions of Chapter IV-B or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened. 114. Penalty for attempt to export goods improperly, etc. Any person, who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 113 or abets the doing or omission of such an act shall be liable,- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding five times the value of the goods or one thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding five times, the duty sought to be evaded on such goods or one thousand rupees, whichever is the greater; (iii) in the case of goods under claim for drawback, to a penalty not exceeding five times the amount of drawback, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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