Legal principle

A let export order under Section 51 does not oust the jurisdiction of Customs at the gateway/exit port to seize the goods and initiate confiscation proceedings, since confiscation is an action in rem that depends on the conditions in Sections 111/113 rather than on clearance of the goods for export.

Court decision

The Tribunal (Jyoti Balasundaram, Vice-President) upheld the impugned order, holding that the Commissioner of Customs, Chennai had jurisdiction to issue the show-cause notice, and rejected the appeal in favour of the Revenue, following Madanlal Steel Industries (Madras HC) and Vikram Jain (Karnataka HC) and distinguishing the appellants' case law.

Facts

Rare Crafts Overseas, a partnership exporter, attempted to ship cargo declared as handicrafts (items made of 'Padak') to Singapore, which was found to be red sanders wood, prohibited for export under the Customs Act read with Schedule II of the Export Policy (value-added products restricted under DGFT licence subject to State Chief Conservator of Forests certificate and CITES requirements). The shipping bill was filed at Bangalore and the proper officer there granted a let export order under Section 51, but the goods were seized at Chennai, the gateway port, before shipment, on specific intelligence. The Commissioner of Customs (Export-Seaport), Chennai issued a show-cause notice dated 27.3.2007 under Section 124 proposing confiscation and penalties on the exporter, its partners and others. The exporter appealed to the CESTAT against the Commissioner's order upholding his own jurisdiction.

Key provisions

• Section 51, Customs Act, 1962 — Clearance of goods for exportation
• Section 47, Customs Act, 1962 — Clearance of goods for home consumption
• Section 113, Customs Act, 1962 — Confiscation of goods attempted to be improperly exported
• Section 124, Customs Act, 1962 — Issue of show cause notice before confiscation of goods etc
• Section 4, Customs Act, 1962 — Appointment of officers of customs
• Section 50, Customs Act, 1962 — Entry of goods for exportation