Order date – 29 November 2022

Facts –

• The Appellant, M/s Euro International, is a manufacturer and exporter of readymade garments falling under Chapter 61 and 62 of Customs Tariff Act.
• DGFT has issued four (04) Focus Market Licenses scrip to the appellant against their exports covered under 17 fraudulently amended shipping bills, but only three FML scrip were subsequently registered with the Customs EDI System at ICD, Tughlakabad. The fourth FML scrip No. 0519032887 dt. 04.08.2017 was not registered with the Customs. As against the other three shipping bills where goods were shipped through M/s IAL Logistics, no license / scrip had been issued by DGFT.
• Show cause notice dated 09.10.2017 was issued proposing to confiscate the goods exported vide twenty shipping bills, further, proposed to demand the ineligible amount of Focus Market licenses obtained alongwith interest. Further, proposed to demand the amount of drawback given to the appellant under Section 75A of the Act read with Rule 16 of the Drawback Rules and penalty was also imposed.

Issue –

• Whether the goods which have actually been exported can be confiscated under Section 113 and further penalty have been rightly imposed under Section 114(iii) and 114AA, although the amount was reduced?

Order –

• The Tribunal observed that the goods were not available for confiscation at the time of passing the order, hence the order of confiscation is bad and accordingly order of confiscation is set aside. 
• Further, it was held that penalty under Section 114(iii) is also liable to set aside, as this penalty is not imposable in absence of confiscation.
• So far penalty under Section 114AA is concerned, the Tribunal found that the appellant have resorted to unauthorised modification /alteration in the shipping bill after the same was passed by the proper officer of the Customs, which amounts violation of provisions of Section 114AA. However, in view of the facts and circumstances, upholding the penalty under this Section, reduce the penalty to Rs.2,00,000/- (Two lakhs only).
• Thus, the appeal is allowed and the impugned order is modified in the aforementioned terms.