CESTAT Reduces Penalty Imposed for Attempt to Export Red Sander Wood in Form of Pillar Tops on ground of Contravention of provisions of Customs Act and Foreign Trade Act [Read Order]

The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reduced the penalty imposed for the attempt to export red sander wood in the form of pillar tops on the ground of contravention of provisions of the Customs Act,1962, and Foreign Trade (Development and Regulation) Act, 1992. 

Artisan’s Welfare Society, the appellant assessee was a registered society which was registered under the Societies Registration Act, 1960 and the assessee appealed against the order passed by the Commissioner for imposing penalty for the export of wooden pillars by the assessee. 

S. Murugappan, the counsel for the assessee contended that the assessee exported the pillars to his customer in China; that at the time of purchase itself, these pillars were painted black and the assessee did not make any alteration and these pillars were to be exported as such. 

Further submitted that the show cause notice does not attribute any knowledge on the assessee as to the species of the wood and the notice also does not allege that the assessee with such knowledge had deliberately attempted to export the goods. 

Also stated that the assessee did not know that the goods were made of red sanders and only after verification by the officers came to know that the pillars are made of red sanders. 

R. Rajaraman, the counsel for the department relied on the decisions made by the lower authorities and contended that it cannot be concluded that the assessee had no role in the attempt to smuggle red sanders and the incident would not have come to light but for the inspection conducted by the officers of the department that too based on specific intelligence. 

Also contended that it was clear that there was an attempt to export Red Sander Wood in the form of pillar tops which were painted black in contravention of the prohibition imposed under the provisions of the Customs Act and the Foreign Trade (Development Regulation) Act. 

The Bench observed that the investigation could not prove that the exporter knowingly or intentionally made any false declaration statement or produced documents and all along the assessee had been pleading that he was ignorant and was not aware that these goods are prohibited for export.

The two-member bench comprising Sulekha Beevi (Judicial) and Vasa Seshagiri Rao (Technical) held that the penalty imposed was disproportionate and excessive as the confiscated goods were valued less than that and reduced the penalty imposed under section 114(i) of the Customs Act. 

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