2003 (3) TMI 612 - AT - Customs

Summary

Issues:
1. Validity of import license for goods
2. Interpretation of goods as per import license description
3. Enhancement of goods value
4. Imposition of penalty for non-compliance

Issue 1: Validity of import license for goods
The appeal was filed against the order-in-appeal upholding the confiscation of goods under Section 111(m) of the Customs Act, 1962. The appellant's Advance Licence permitted the import of 'ACRYLIC PLASTIC SCRAP CUT PIECES CUTTINGS OFF CUTS WITH IMPURITIES,' but the physical examination revealed the goods were new acrylic plastic sheets cut to various sizes, not covered by the license. The Addl. Commissioner correctly rejected the license, and the goods were to be assessed to normal customs duty.

Issue 2: Interpretation of goods as per import license description
The appellants argued that the goods were off cuts, not sheets, but the examination report confirmed the goods as new acrylic plastic sheets cut to various sizes. The term 'sheet' under Chapter 39 has a wide connotation, covering various shapes and sizes, not limited to specific dimensions. The Addl. Commissioner justified the enhancement of goods' value based on invoices and Bills of Entry, comparing them with identical goods imported from Japan, which was deemed fair and reasonable.

Issue 3: Enhancement of goods value
The appellants contested the arbitrary increase in goods' value from $400 to $500 per metric ton (PMT). However, the Addl. Commissioner based the value adjustment on similar goods' prices imported from Japan, justifying the enhancement with adequate reasoning. The Tribunal found the adopted value fair and proper, with no grounds for interference.

Issue 4: Imposition of penalty for non-compliance
The appellants claimed no penalty should be imposed due to the absence of mens rea. However, the Tribunal cited a Supreme Court decision stating that proving a default in complying with the statute is sufficient, without requiring mens rea. As the appellants misdeclared and undervalued the goods, leading to confiscation under Section 111 of the Customs Act, penal action was deemed appropriate. Ultimately, the Tribunal set aside the confiscation and penalty, allowing the appeal based on the findings that the goods were not liable for confiscation, values were not misdeclared, and the goods were covered by the license.