No redemption fine can be imposed on goods which were exported without furnishing bond

In the instant case, General Export Enterprises (Appellant) had exported consignment of manmade fabrics. During the course of the investigation, the gram per square meter (GSM) values declared by the Appellant were found to be mis­declared but the goods were allowed to be exported without executing any bond. On adjudicating, it was held that there was a misdeclaration of the goods in question. Therefore, the goods were liable for confiscation and redemption fine of Rs. 8,00,000/- was imposed on the Appellant. The said order was challenged by the Appellant before the Hon’ble Mumbai Tribunal.

The Hon’ble Tribunal asked the Revenue to ascertain the fact whether any bond or undertaking was executed by the Appellant before the goods were exported. This query was not answered by the Department. The Hon’ble Tribunal observed that the goods are not liable for confiscation as the same are not available and also observed that the Appellant has not executed any bond or undertaking before the goods were cleared for export. Consequently, the Hon’ble Tribunal reduced the redemption fine from Rs. 8,00,000/- to Rs. 6,00,000/-. This part of the order was challenged by the Appellant before the Hon’ble High Court, which remanded the matter to the Hon’ble Tribunal to reconsider the issue.

The Larger Bench of the Hon’ble Mumbai Tribunal in the case of Shiv Kripa Ispat Pvt. Ltd. vs. Commissioner of Central Excise, Nasik [2009 (235) ELT 623 (Tri-LB)] (“Shiv Kripa Ispat Case”) had held that if the goods were allowed to be exported without executing any bond or the goods are not available for confiscation, in that situation redemption fine cannot be imposed. In the instant case, the Revenue had failed to produce the evidence as to whether the subject goods were cleared for export under bond. Therefore, it was concluded that the goods in question were cleared for export without furnishing any bond. Therefore, it was held that although the goods were liable for confiscation; no redemption fine can be imposed in the light of Shiv Kripa Ispat Case.