Full Judgment
2. Appellant No.- Shri Himanshu N. Gandhi, was working in the Exporter's appellant No-1's firm at Banaglore and looking after the work of Export of Silk after processing the goods at Bangalore.
3. The Collector of Customs after hearing the parties ordered the confiscation under the proviso of Section 113(d) of the Customs Act 1962 of the goods found mis-declared and attempted to be exported. He imposed a penalty of Rs 5 lakhs on Shri N.M. Mehta, proprietor of M/s N. Mehta & Co; Rs 1 lakh on Shri Himanshu N. Gandhi, appellant No-2 and Rs 25,000/- on M/s Sanco Trans (P) Ltd., the Custom House Agents, under the proviso of section 114(11) of the Customs Act 1962.
(a) The learned Advocate for appellants at SI No. 1 & 2, only contests the penalty imposed and submitted that there is no evidence of knowledge on part of his client at SI No.1 since he was always at Bombay and the entire work of Export at Bangalore, was looked after by his client A-2. The cartons containing the correct goods were examined by the Silk Board Officers and sealed by them. The goods as procured, were found at Brindavan Hotel and no allegations established of any tampering of the export sealed Cartons by his clients. This was a genuine case of mix up of export consignments and heavy penalties are not called for.
(b) We find that the learned Collector has taken cognizance of the Dismissal of the case filed by Shri N. Mehta as regards penal action by the Divsion Bench of Hon'ble Karnatka High court and held him therefore liable for penal action. The order of the Division Bench in C.P. No. 644/92 held as "Therefore even on merit there is no substance in the review petition. However, the petition stands dismissed for default." Therefore, we do find a case for penalty on merits on the person incharge for exports i.e. Shri Himanshu Gandhi and the proprietory fir, the exporter in this case, attempting to export "cotton sarees other cotton goods instead of declared 968 pieces of Silk Sarees declared at FOB value of Rs 6,56,852/-. The declared value of goods found was to be only Rs 89,250/- for 357 silk sarees and Rs 1,658/92 for cloth ie.
about Rs 91,000/- amounting to of Rs 5,65,000/- approximately.
Therefore, we find that penalty of Rs 5,00,0001- imposed on the proprietor and Rs 1 lakh i.e. total Rs 6 lakhs is very high, for the alleged misdeclaration as found and established of Rs 5.65 lakhs approximately only. We would therefore, reduce the same to Rs 1.50 lakhs on the proprietor considered adequate by the Bench of this Tribunal to be adequate while fixing pre-deposit as adequate penalty in the facts and circumstances of this case. Penalty on Shri N.M. Mehta is reduced to Rs 1.5 lakhs keeping in view that no direct knowledge or act of/or pre-concert, with the misdeclaration was established by the adjudicator as regards Shri N.M. Mehta who was not at the scene of Export. As regards Shri Himanshu N. Gandhi, we find that he has admitted to have knowledge and was actively involved and reasonable for the attempt to export misdeclared goods while he was responsible to ensure that the export of correct goods should take place. Therefore penalty of Rs 1,00,00/- imposed on him is found to be adequate and justified as imposed and confirmed.
5. In view of our findings, The appeal of Shri N.M. Mehta is partly allowed by reducing the penalty imposed on him under Section 114 of Customs Act 1962 to Rs 1.5 lakh. The confiscation of the goods and redemption fine on the goods belonging to his firm which was not contested before us is confirmed. The appeal of Shri Himanshu Gandhi is dismissed, as we find no reason to interfere with the penalty of Rs 1 lakh imposed on him.