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Issues: Misdeclaration of goods, Classification of goods, Valuation of goods, Confiscation under Section 111(m) of the Customs Act, Penalty under Section 112, Reduction of redemption fine and penalty
Misdeclaration of goods: The case involved an order placed for import embroidery pieces declared as 'embroidery strips on visible ground' for classification under 5810.99 of the Customs Tariff. However, upon examination, it was discovered that the goods in certain cartons were 'embroidery on visible base' and in others 'embroidery without visible base' classifiable under 5810.90. The misdeclaration led to a deliberate attempt to evade customs duty, resulting in the confiscation of the goods under Section 111(m) of the Customs Act. Classification of goods: The imported consignment consisted of both 'embroideries without visible base' and 'embroideries with visible base,' with a higher rate of duty applicable to the former under sub-heading 5810.10. The misdeclaration of the goods' description under import led to the incorrect classification and valuation, justifying the confiscation under Section 111(m) of the Customs Act. Valuation of goods: Due to the misdeclaration, the declared transaction value could not be accepted, and the valuation was done with reference to the valuation rules. The comparative prices were considered by the proper officer since the transaction value was not accepted. The lack of evidence to prove that the value of both types of goods was the same further supported the decision to uphold the revised valuation. Confiscation under Section 111(m) of the Customs Act: The deliberate misdeclaration of the goods' description and the consequent evasion of customs duty justified the confiscation of the goods under Section 111(m) of the Customs Act. The misdeclaration resulted in an admitted excess levy of duty, indicating a clear case of non-compliance with customs regulations. Penalty under Section 112: The importers were held liable for penalty under Section 112 for misdeclaration of goods. The penalty amount imposed by the lower authorities was deemed excessive, considering the circumstances of the case. The penalty was subsequently reduced to a more appropriate amount of Rs. 75,000 based on the benefit gained by the importers through the misdeclaration. Reduction of redemption fine and penalty: After thorough consideration of the case, the appellate tribunal found that the redemption fine imposed by the lower authorities was excessive. The redemption fine was reduced from Rs. 3,00,000 to Rs. 1,50,000, taking into account additional factors such as demurrage costs incurred by the importers. Similarly, the penalty amount was also reduced to Rs. 75,000, considering the overall circumstances and the benefit derived by the importers from the misdeclaration.
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