G.P. JAISWAL, Vs. CC

JUDGEMENT

(1.) THE three appeals filed by the appellants viz. Shri G.P. Jaiswal (CH No. 13/86), Shri Rakesh Srivastava, Sr. Supdt. of Central Excise and Shri Rakesh Mishra and directed against a common order -in -original No. 4/COMM/LKO/2002 Dated 29.4.2002 passed by the Commissioner of Customs, Lucknow. In the said order, the Commissioner has imposed a penalty of Rs. 25,000/ - each on Shri G.P. Jaiswal and Shri Rakesh Srivastava and Rs. 50,000/ - on Shri Rakesh Kumar Mishra, under Section 114(i) of the Customs Act. In the impugned order, the Commissioner ordered confiscation of 57,000 pairs of PVC soles which were cleared for export by M/s Yash Exports and the penalty imposed on the three appellants was with reference to the violations of customs law relating to the said exports under the DEPB Scheme. It was alleged that the exporter indulged in massive over valuation of the export goods and the appellants through their actions facilitated the said export so as to enable the exporter to fraudulently claim DEPB benefits in excess than permissible on the basis of correct price.

(2.) THE order -in -original, elaborately enumerates the role played by the three appellants in facilitating the shipment of the said consignment of PVC soles with the inflated value declaration. It is alleged that, as against the market price of Rs. 8 to 15 per pair the export value was stated at Rs. 380/ - per pair. The order -in -original proceeds that each of the three appellants had conspired together to help the exporter in effecting the shipment containing the inflated value declaration. The export goods (PVC soles) have been held liable for confiscation under Section 113(d) of the Customs Act and consequently the aforesaid penalties have been imposed on the appellants.

(3.) WE not that the respective penalties have been imposed under Section 114(i) of the Customs Act. The penalty can be imposed only in the even export goods are held liable for confiscation under Section 113 of the Act. In the impugned order, it has been held that the goods are liable for confiscation under Section 113 (d) of the Act. The said sub -section (d) of Section 113 provides confiscation in a case where "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." Declaration of higher PMV is stated to be contravention of provisions of para 7.36A of the Public Notice No. 10/97(PN) -1997 -2000 dated 21.5.97. While the contravention of the P.N. is alleged, it is not established as to whether or not such an act amounts to export contrary to any prohibition imposed under the Customs Act or any other law for the time being in force. In the order itself is has been concluded that the export is in contravention of para 6.37A the Exim Policy which does not necessarily mean that the export is contrary to any prohibition imposed by the Exim Policy. It is only in the Finance Act 2003 (vide Clause 109 of the Finance Bill, 2003) that sub -section (i) of Section 113 of the Customs Act has been amended to render the export, the value of which is misdeclared, liable for confiscation. This amendment being prospective, and confiscation having been ordered under Section (d), we note that the grounds for imposing penalty under Section 114(i) do not arise. We find that the Hon'ble Supreme Court in their judgment reported in : 2003 (155) ELT 4 (SC) in the case of Commissioner of Customs (EP) Mumbai Vs. Prayag Exporters Pvt. Ltd., has held that the export goods (showing inflated value) cannot be confiscated under Section 113(d) of the Customs Act. Following the said judgment, we held that the penalties imposed cannot be sustained and are required to be set aside. Accordingly, we allow the appeals and the penalties imposed on the appellants are set aside.