Exporter’s loading and sealing lapses justified a penalty for attempted export of prohibited red sanders.

The appellant, a 100% Export Oriented Unit, filed a shipping bill describing the consignment as polished granite slabs for export to Singapore. On examination, the container was found to contain 416 red sander logs weighing 12.620 MT. The Commissioner confiscated the logs as prohibited goods and imposed a penalty of ₹5,00,000 on the appellant. The appellant appealed, maintaining that it had intended to export granite and was not responsible for the substitution

The Tribunal found discrepancies between the purchase order produced on appeal and the shipping-bill particulars, and noted several departures from the appellant’s usual export and container-sealing procedures

Whether the appellant’s explanation and evidence established that it was not responsible for the attempted export of red sander logs in a container declared to contain granite slabs

Whether the penalty imposed on the appellant was justified and, if so, whether its amount warranted reduction

The judgment does not identify or discuss a specific statutory provision governing confiscation or penalty.

It applies the principle that a penalty may be sustained where the exporter’s conduct and procedural lapses support responsibility for an attempted export of prohibited goods; the amount may nevertheless be reduced after considering the overall circumstances

The appellant cited Ramesh Kumar v. State of Chhattisgarh, State of Haryana v. Jaswinder Singh, and Maheshwari Rocks India Pvt. Ltd. v. CC, Chennai, but the Tribunal did not set out or apply any specific rule from those decisions

The Tribunal rejected the appellant’s claim that it had bona fide intended to export granite. The purchase order submitted with the appeal differed from the shipping bill in both quantity and value, and the appellant had filed a free shipping bill valued below ₹10 lakh, which the Tribunal noted was less likely to be selected for examination under the instructions then in force

The Tribunal also relied on the fact that the granite was loaded at another premises, the appellant’s usual company OTL was not used to seal the container, and the appellant’s Marketing Manager had admitted the relevant circumstances

These matters supported the finding that the appellant’s lapses justified a penalty, though the overall factors warranted reducing its amount

The confiscation of the red sander logs was not disturbed. The appeal was partially allowed