Jatin And Company vs C.C. (ICD), New Delhi

The only point for consideration in this appeal is whether there was misdeclaration of goods admitted to be exported. The non-basmati rice was

admitted to be exported from 29.01.2009 to 02.02.2009. Customs detected such goods mis-declared as Basmati rice on preliminary examination.

Sample drawn was also sent for testing. The test result dated 12.02.2009 proved the goods to be non-basmati rice misdeclared as basmati rice. In

such circumstances the original authority confiscated consignment of non-basmati rice and imposed redemption fine of Rs.20.00 Lakhs under section

125 of Customs Act 1962 and also imposed penalty of Rs.20.00 Lakhs under section 114(i) of the said Act. Ld. Counsel for the appellant submits that

it was by mistake the non-basmati rice packets were loaded in the container and as soon as the appellant came to know that such goods were loaded

intimation was sent to the ld. Commissioner on 18.02.2009 stating the difficulty of the workers who loaded basmati rice in place of basmati rice.

Therefore, there cannot be any presumption that the appellant deliberately misdeclared the non-basmati rice to be basmati rice. Accordingly, penalty is

not imposable. So also redemption fine not imposable.

According to appellant, the penalty if any warranted to be deposited should have been examined in the light of section 114AA of the Customs Act

1962 without governing the case under section 114(i) of the said Act. Mens-rea is essential for invoking penal provision of section 114AA which came

to the statute book on 13.07.2006. Therefore, in absence of mens-rea no penalty is leviable.

Revenue supports the adjudication stating that only upon detection by preliminary examination the appellant wrote to explain about the fault of the

workers. When the appellant waived service of the show cause notice on it, the authority adversely passed order on 02.03.2009.

Heard both sides and also perused the records.

Attempt to export non-basmati rice came to record, when the preliminary examination was conducted, that was corroborated by the testing

laboratory report dated 12.02.2009. 6 days there after when the appellant would apprehend that the proceeding shall be initiated under section 111 and

114 of Customs Act 1962, it sent a letter to the Commissioner pleading ignorance and finding fault with the workers. Such plea does not have basis,

since the appellant did not come out with clean hands to inform the authority before 12.02.2009. That proved misdecaration of the description of

goods. Once such misdeclaration is established section 113 shall apply for confiscation of the goods. The authority accordingly, granted redemption

option to the appellant. But the said authority has not recorded the value of the non-basmati rice attempted to be exported for determination of

redemption fine and penalty. Therefore, we ascertain from the appellant as to the value of the said goods. It is explained that the value shall be

Rs.1,50,16,320/-. Considering 10% profit margin, the redemption fine is reduced to Rs.15.00 Lakhs.

So far as the penalty of Rs.20.00 Lakhs under section 114(i) is concerned, invoking of the said section is proper. That rules out applicability of

section 114AA of Customs Act 1962. It may be stated that the appellant took a risk in attempting to export non-basmati rice and there shall be no

sympathy for any reduction in penalty. However, considering that the appellant has admitted the misdeclaration, to reduce the litigation, the penalty is

reduced to Rs.15.00 Lakhs. With the aforesaid concession appeal is partly allowed to the extent indicated above.

[Dictated & Pronounced in the open Court].