M/s. General Export Enterprises v. The Commissioner of Customs

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CUSTOMS APPEAL NO.11 OF 2011 M/s. General Export Enterprises ..Appellant. vs. The Commissioner of Customs (Exports) …. ..Respondents. Mr. R.V. Shetty i/b Mr. Ashok D. Shetty for the Appellant. Mr. Pradeep S. Jetly for the Respondents. .... CORAM : DR.D.Y.CHANDRACHUD & A.A. SAYED, JJ. 20 October 2011 P.C. :

This appeal is directed against an order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dated 14 December

2010. By the order of the CESTAT, the confiscation of the goods under Section 113(I) of the Customs Act 1962 has been upheld on the ground that the GSM (i.e. grams per square meter) was misdeclared by the exporter.

The Commissioner imposed a redemption fine of Rs.8 lacs and a personal penalty of Rs.4 lacs. In appeal before the Tribunal, the Tribunal initially made the following observations in paragraph 3 of its order :

I have heard the learned JDR also on this aspect. The goods in question were allowed to be cleared for export without requiring PNP 2 CUAPP11-20.10 the exporter to furnish any bond or under taking. They were not physically available for confiscation when the impugned order was passed. On these facts, the Larger Bench decision is squarely applicable and consequently, the fine imposed by the Commissioner in lieu of confiscation of the goods is liable to be set aside. It is ordered accordingly.

However, while passing its final order in paragraph 7 the Tribunal observed as follows :

The total FOB value determined by the Commissioner is over Rs. 41 lakhs. A fine of Rs.8 lakhs and a penalty of Rs.4 lakhs do not appear to be reasonable. The impugned order does not indicate the basis for such high fine and penalty. In the facts and circumstances of this case, I reduce the quantum of fine to Rs.6,00,000/- (Rupees Six Lakhs Only) and that of penalty to Rs.1,00,000/- (Rupees One Lakh Only).

Counsel appearing on behalf of the Appellant submits that the ultimate finding in paragraph 7 is not consistent with what is stated by the Tribunal in paragraph 3. Counsel appearing on behalf of the Revenue fairly cannot dispute this position. In that view of the matter, we set aside the order of the CESTAT dated 14 December 2010 and remit the proceedings back to the Tribunal for a fresh decision in accordance with law. Since we have set aside the order of the Tribunal because of the inconsistency in the finding, we do not express any opinion on the question of law raised. The Appeal is accordingly disposed of. (Dr. D.Y. Chandrachud, J.) (A. A. Sayed, J.)