Cus - Factory employee acts on behalf of employer & appellant has to take blame for any irregularity done by him - law does not stipulate that only differential quantity which has been misdeclared is to be confiscated - entire quantity to be confiscated: CESTAT
By TIOL News Service
MUMBAI, APR 07, 2014: THE appellant had filed two shipping bills for export of dyed printed fabric made from 100% polyester filament yarn under DEPB scheme. On examination, it was found that there was shortage of 5 mtrs. in each pack of 25 mtrs. in both the shipping bills. Thus there was shortage of 12335 mtrs. valued at FOB Rs.6,48,255/- in respect of the first shipping bill and 12689 mtrs. valued at FOB Rs.6,46,870/- in respect of the second shipping bill.
It appeared that due to the misdeclaration in the quantity of the goods, the appellant would have got the benefit of Rs.1,07,831/- under DEPB scheme.
The appellant's explanation to the shortage is that some worker in the factory by mistake has cut the saree pieces in the width of 4 mtrs. instead of 5 mtrs and that is how this misdeclaration has happened.
Be that as it may, on the appellant, redemption fine and penalty was imposed and which totals Rs.3,67,831/-.
Having failed to convince the Commissioner(A) that it was the ‘mistake by the worker' that resulted in shortage of dyed printed fabric in the export consignment, the appellant is before the CESTAT and parrots the same argument. It is also submitted that in view of the Larger Bench decision in Shiv KripaIspat Pvt. Ltd. 2009-TIOL-388-CESTAT-MUM-LB there cannot be any order of confiscation and redemption fine as the so-called excess goods were not available for confiscation at any point of time.
The Revenue representative submitted that having admitted the misdeclaration the justification offered by the appellant for not imposing RF/penalty that it was the fault of the worker cannot be accepted sinceall cases of misdeclaration are either due to some employee of the exporting company or an employee of the sender of the goods. Moreover, in the facts of the case, the redemption fine &penalty have been correctly imposed.
The Bench observed -
"4. … There is no dispute that the goods found at the time of examination were 20% less than what was declared. The explanation given by the appellant is that it is due to mistake on the part of the factory employee. The factory employee acts on behalf of the appellant and the appellant has to take the responsibility for any irregularity done by the employee. Since the quantity of goods being exported was misdeclared, the goods are liable to confiscation and redemption fine is imposable. I have gone through the Larger Bench decision of this Tribunal in the case of Shiv KripaIspat Pvt. Ltd. (supra). The facts of that case are entirely different. In the present case, the goods were very much available at the time of export and in fact were released only after payment of redemption fine. The argument that the so called excess misdeclared quantity was not available and hence the goods cannot be confiscated is not acceptable. The law does not stipulate that only the differential quantity which has been misdeclared is to be confiscated. Once there is a misdeclaration with respect to the quantity, the entire consignment is liable to be confiscated. In view of this position, confiscation and redemption fine are upheld. However, I find substance in the argument of the learned Advocate that the benefit that would have accrued to the appellant would have been approximately Rs.1.07 lakhs and in view of this position, redemption fine and penalty imposed are on the higher side. Accordingly, I reduce the redemption fine to Rs.1,50,000/- (Rupees one lakh fifty thousand only) and penalty to Rs.1,07,000/- (Rupees one lakhs seven thousand only) with consequential relief…."
The appeal was disposed of in above terms.
(See 2014-TIOL-521-CESTAT-MUM)
