Customs, Excise and Gold Tribunal - DelhiM/S Udal Organics (P) Ltd. vs Cce, Kanpur on 20 March, 2001Equivalent citations: 2001(132)ELT147(TRI-DEL)ORDERP.G. Chacko1. The brief facts of the case are that the appellants, who were engaged in the manufacture and exports of Zinc Oxide, filed Shipping Bill No. 1490 dated 26.11.98 for export of 205500 Kgs. of Zinc Oxide (in 600 bags) under claim for duty drawback, that they claimed a total amount of Rs.2,46,000/- as drawback @Rs.12 per Kg., that, on 100% weighment, only 9082 Kgs. (in 400 bags) of Zinc Oxide were found to have been produced for exportation as against the declared  quantity of 20500 Kgs., that the said quantity of 9082 Kgs. of the goods was seized by the Customs officers who believed that the goods were attempted to be improperly exported and hence liable to confiscation, that the appellants waived show-cause notice and presented themselves for personal hearing on 30.11.98, that upon such hearing, the Dy. Commissioner of Customs passed order dated 7.12.98 confiscating the confiscating the aforesaid 9082 Kgs. of Zinc Oxide underSection 113(i)of the Customs Act with option for redemption on payment of fine of Rs.1.5 lakhs ans also imposing on the party a penalty of Rs.5 lakhs underSection 114(iii)of the Act, and that order of the Dy. Commissioner was upheld by the Commissioner (Appeals) in the appeal filed by the party. Hence the present appeal before the Tribunal.2. Carefully examined the records and heard both sides.3. Arguing for the appellants, 1d. Advocate Sh. Bipin Garg submits that the lower authorities finding of mis-declaration of quantity of export goods in Shipping Bill is unsustainable. He explains that the appellants had, in their invoice issued on 26.11.98 at the time of clearance of the goods from their factory, clearly stated Registration Number of two trucks for transportation of the goods; that Sh. R.K. Yadav, Director of the Company had, in his statement recorded by the Customs officers, explained that 400 out of the 600 bags were transported in truck No. UP 78 N-2082 and remaining 200 bags were transported in the other truck No. UHH 98; that he had further explained that the  latter truck carrying 200 bags of Zinc Oxide could not reach along with the former truck at the Inland Container Depot (ICD) on account of a break-down of the vehicle on its way and that, at the time of weighment of the goods, only the 400 bags of Zinc oxide were available. Ld. Advocate further submits that the aforesaid 200 bags of Zinc Oxide were also brought to the ICD on the next day (27.11.98). These facts and circumstances, according to counsel, would clearly indicate that there was no attempt on the part of the appellants to mis-declare the quantity of export goods for fraudulent purpose of higher drawback. Regarding the finding of the lower authorities that the appellants had even mis-declare the weight of Zinc Oxide contained in the 400 bags, the Counsel submits that the weight of the goods in their factory could not be taken on account of their weighbridge being out of order and the same was, therefore, taken on a weighbridge outside the factory as evidenced by copies of the certificates dated 26.11.98 issued by M/s Eastern Dharam Kanta available on record. Counsel submits that the appellants were willing for reconciling any such difference in weight found at the ICD by accepting weighment results and that such willingness was duly intimated to the officers by Sh. Yadav in his statement. In these facts and circumstances, there was no warrant for concluding that the appellants had mis-declared the quantity of the goods with fraudulent intention to claim drawback against a quantity of 20500 kgs. He, therefore, submits that the confiscation of the 9082 Kgs. of the goods and the imposition of penalty on the  party were not justifiable. He further submits that the quantum of redemption fine imposed is dis-proportionate to the value of the quantity of 9082 Kgs. of Zine Oxide. He has a further case that the quantum of penalty imposed is also exorbitant. He, therefore, prays for setting aside the orders of the lower authorities and allowing the appeal.4. Ld. JDR, Sh. Swatantra Kumar opposes the above arguments. He submits that the appellants were at the material time operating under the self Removal Procedure and that they filed the Shipping Bill under drawback claim themselves and not though any CHA. It was their liability to produce the declared quantity of goods for exportation. They produced only 400 bags containing 9082 Kgs. of Zinc Oxide. Their conduct indicated a clear intention to export 9082 Kgs. of Zinc Oxide and get away with drawback of duty on the basis of the value of the declared quantity of 20500 Kgs. Ld. JDR further submits that the remaining quantity of goods for exportation. They produced only 400 bags containing 9082 Kgs. of Zinc Oxide. Their conduct indicated a clear intention to export 9082 Kgs. of Zinc Oxide and get away with drawback of duty on the basis of the value of the basis of the value of the declared quantity of 20500 Kys. Ld. JDR further submits that the remaining quantity of Zinc Oxide contained in the 200 bags was attempted to be diverted to the domestic market and that it was only when their fraudulent intention are exposed by physical examination and weightment of the goods at the ICD that they tried to cover up the matter by bringing the 200 bags to the ICD on the next day. There was no satisfactory answer to the charge of mis-declaration of quantity of export goods in the Shipping Bills. Therefore, 1d. JDR submits, the confiscation of the goods and imposition of penalty on the appellants were quite justifiable. He prays for rejecting the appeal.5. I have carefully examined the submissions.Section 50of the Customs Act requires presentation, by exporter, of a Shipping Bill for the purpose of exportation of his goods in any vessel or aircraft. While presenting such Shipping Bill, the exporter shall make and subscribe to a declaration as to the truth of the contents of the Shipping Bill. In the instant case,admittedly, the appellants presented their Shipping Bill for exportation of a quantity of 20500 Kgs. of Zinc Oxide valued at Rs.4,85,445/- claiming drawback of duty to the extent of Rs.2,46,000/-. The quantity of Zinc Oxide presented at the time of filing of the Shipping Bill at the ICD was admittedly only 9082., on which the drawback as worked out by the adjudicating authority was only to the extent of Rs.1,08,984/-. These facts are not disputed. The appellant's case is that the remaining quantity of Zinc Oxide could not be produced at the ICD along with the above quantity of 9082 Kgs. at the time of filing of the Shipping Bill on account of breakdown of the truck.That quantity was produced only on the next day. I find that the same was done only after the Customs authorities proposed to take action for confiscation of the aforesaid quantity of 9082 Kgs. of goods and for imposition of 9082 Kgs. of goods and for imposition of penalty on them. The requirement of law was to produce the export goods, of the quantity and value declared in the Shipping Bill, before the Customs authorities at the time of filing of the Shipping Bill. Had the appellants any intention to export the entire quantity of 20500 Kgs. of Zinc Oxide declared in the Shipping Bill, they would have presented the Shipping bill only after the entire quantity of the goods reached the ICD. It, therefore, appears that the appellants had no intention to produce the 200 bags of Zinc Oxide for exportation against the Shipping Bill. In other words, a fraudulent attempt to claim higher drawback to the extent of Rs.1,37,016/- by mis-declaring the quantity of Zinc Oxide in the Shipping Bill is manifest on the fact of even the admitted facts of the case. Sh. Yadav's statement does not appear to have cleared the position any better. I am, therefore, not able to find fault with the decision of the lower authorities to confiscate the aforesaid quantity of 9082 Kgs. of Zinc Oxide and to penalise the exporter. Further, having regard to the provisions ofSection 125of the Customs Act, I find that the quantum of redemption fine imposed i lieu of confiscation is only reasonable. However, a penalty of Rs. 5 lakhs appears to be harsher than what is warranted in the facts and circumstances of the case. I, therefore, reduce the quantum of penalty from Rs.5 lakhs to Rs.3 lakhs having regard to the facts and circumstances.The orders of the lower authorities will stand modified to this extent only.6. The appeal is disposed of in the above terms.