2002 (8) TMI 789 - AT - Customs

Summary

Issues Involved:

1. Valuation of the goods.
2. Liability for confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962.
3. Penalty imposition under Section 112(a) of the Customs Act, 1962.
4. Permission for re-export of the confiscated goods.

Issue-wise Detailed Analysis:

1. Valuation of the Goods:

The Commissioner did not clearly determine how the value of the goods was arrived at. The estimated price of Rs. 24,83,830/- was stated as the landed cost of the impugned goods without clear reasons. The Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 should have been followed to determine the value once the declared value of Rs. 10 lakhs was not accepted. As such an exercise was not conducted, the valuation and the corresponding redemption fine of Rs. 5 lakhs cannot be upheld.

2. Liability for Confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962:

The goods were in commercial quantities and should have been cleared by filing necessary Bill of Entries. The Tribunal referenced the case of Irfan Abdul Haque, concluding that the policy does not restrict the import of freely importable goods by passengers. Thus, the confiscation under Section 111(d) for breach of import Trade Control Laws prohibitions cannot be upheld. The Commissioner also cannot uphold confiscation under Section 111(d) for violations of the Drugs and Cosmetics Act, 1940 and then direct compliance with the same provisions post-confiscation.

However, there was a clear mis-declaration of the contents of the two checked-in suitcases by Sri Parmar, making them liable for confiscation under Section 111(m). Smt. Parmar, who declared her baggage contents as Rs. 10,000/-, cannot be held liable for the mis-declaration of her husband's suitcases. Thus, she is not liable for confiscation under Section 111(m).

3. Penalty Imposition under Section 112(a) of the Customs Act, 1962:

Sri Parmar is liable for a penalty under Section 112(a) due to the mis-declaration of the contents in his checked-in suitcases. However, Smt. Parmar, who did not perform any act rendering the goods liable for confiscation, is not liable for a penalty under Section 112(a). The penalty imposed on Sri Parmar was reduced from Rs. 3 lakhs to Rs. 50,000/-, and the penalty of Rs. 1 lakh on Smt. Parmar was set aside.

4. Permission for Re-export of the Confiscated Goods:

The Tribunal found merit in allowing the re-export of the subject goods. Citing precedents like Groves Overseas Pvt. Ltd. and Mrs. Patel. N, the Tribunal concluded that re-export could be permitted under Section 125 of the Customs Act, 1962, even for mis-declared baggage. The Tribunal reduced the redemption fine from Rs. 5 lakhs to Rs. 1.50 lakhs and ordered that the re-shipment be made under Customs supervision within three months.

Conclusion:

The appeals were disposed of with the following orders:
- The valuation of Rs. 24,83,830/- was not upheld due to improper determination.
- Confiscation under Section 111(d) was set aside, but confiscation under Section 111(m) was upheld for Sri Parmar.
- The penalty on Sri Parmar was reduced to Rs. 50,000/-, and the penalty on Smt. Parmar was set aside.
- Re-export of the goods was allowed with a reduced fine of Rs. 1.50 lakhs, to be completed under Customs supervision within three months.