ALLAHABAD, JAN 19, 2015: THE appellant filed a shipping bill for
the export of a consignment of 125.00 MT of "Indian Pusa 1121 Parboiled
Rice", which was valued at Rs.67.82 lacs (FOB). When the customs
department carried out an inspection and examination it was revealed that the
goods were non-basmati rice and were not of the description contained in the
shipping bill.
The authorized signatory in his
statement admitted that the goods presented for examination were non-basmati
rice though basmati rice was declared.
As the export of non-basmati rice is
prohibited by DGFT, the matter was adjudicated and the Commissioner ordered
confiscation of the goods u/s 113(d)/113(i) but allowed redemption of the same
on payment of redemption fine of Rs.14 lakhs. A penalty of Rs.8 lakhs was also
imposed.
Before the CESTAT the appellant
urged that the value which had been declared in respect of the mis-declared
goods should not be taken but the value of the actual goods while deciding the
quantum of RF and penalty.
The Tribunal dismissed the appeal by
taking a view that no court has power to legalise an illegality by reducing the
mis-declared value to the actual market value of goods in the container, which
was attempted to be exported. However, having due regard to the mis-declared
value, the Tribunal came to the conclusion that the redemption fine of Rs.14
lakhs was on the higher side and, accordingly, reduced it to Rs.10 lakhs. The
penalty was also reduced from Rs.8 lakhs to Rs.5 lakhs.
The appellant is before the High
Court and inter alia raises
the following questions of law:
"(i) Whether the Hon'ble
Tribunal is justified in holding that the misdeclared value of the goods cannot
be reduced to the actual market value of the goods attempted to be exported
specially when the Act and the rules do not whisper so.
(ii) Whether the Hon'ble Tribunal is
justified in imposing redemption fine and penalty when they do not doubt the
submission of the appellants that the goods in question was loaded by mistake
of the labourers and the consignment for export was lying as such in the
factory."
The High Court extracted the
provisions of section 125 of the Customs Act, 1962 and observed that there is
no merit in the submission made inasmuch as -
+ Under Section 125, the
adjudicating officer may, in the case of goods, the importation or exportation
of which is prohibited, and shall, in the case of any other goods, give to the
owner of the goods an option to pay in lieu of confiscation, such fine as the
officer thinks fit.
+ On a plain reading of the language
of the substantive part of sub-section (1) of Section 125, it is clear that the
legislature has not imposed a restriction of the kind which has been sought to
be implied on behalf of the appellant. What the proviso to sub-section (1),
however, stipulates is a ceiling on the fine in lieu of confiscation, insofar
as it stipulates that such fine shall not exceed the market price of the goods
confiscated.
The High Court noted that
non-basmati rice confiscated was valued at Rs.18,000/- to Rs.20,000/- per MT
and as the consignment sought to be exported was 125 MT, the total market value
would be between Rs.22.50 lakhs to Rs.25 lakhs. Further, the proviso to
sub-section (1) to Section 125 stipulated a ceiling of redemption fine as being
not exceeding the market price. Moreover, the adjudicating authority had
imposed a redemption fine of Rs.14 lakhs.
The High Court, therefore, observed-
The grievance of the appellant is that the
redemption fine of Rs.14 lakhs was founded on the mis-declared value of
Rs.67.82 lakhs, as reflected in the shipping bill. We find no reason or
justification to interfere with the order of the adjudicating officer (as
reduced by the Tribunal insofar as quantum of fine is concerned) so long as the
quantum of redemption fine was not in excess of the stipulation contained in
the proviso to subsection (1) to Section 125.
In fact, before the Tribunal, it was sought to
be urged, that the value declared in respect of the mis-declared goods must be
reduced to the extent of the value of the actual goods in the consignment. The
Tribunal was justified in holding that no such exercise could be carried out
and the Court has no jurisdiction to do so, so as to legalize a patent
illegality.
The order of the Tribunal, on a
considered view of the matter, reducing the redemption fine and the penalty to
the extent indicated in the order, is fair and does not call for interference
in the appeal by the exporter.
The appeal was dismissed.
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