2004 (3) TMI 607 - AT - Customs

Summary

Issues: Misdeclaration of goods, Classification under Customs Tariff, Examination of goods, Value determination, Confiscation, Penalty imposition

Misdeclaration of Goods:
The appellants imported articles of Zinc described as Zinc Die Scrap (saves) under Customs Tariff heading 7902.00, but the goods were found to be new articles of zinc like door handles, lock knobs, and bathroom fittings. M/s. SGS Pvt. Ltd. conducted examinations and found the goods to be new and serviceable, not scrap as claimed by the appellant. The department's contention that the imported goods were serviceable was supported by the examination results.

Classification under Customs Tariff:
The department engaged M/s. Upadhyay and Associates to determine the value of the goods by contacting dealers of sanitary fittings. The surveyors concluded that the fittings were not of Indian origin and were parts of a whole sanitary fitting. The value of the imported consignment was determined to be Rs. 68,17,235, which was accepted by the department.

Examination of Goods:
M/s. SGS and the surveyors conducted examinations, including visual inspections and market surveys, to ascertain the nature and value of the imported goods. They found that the goods were new, serviceable, and not available in the market in loose condition, supporting the department's findings.

Value Determination:
The Commissioner adjudicated the case based on reports from examination agencies, holding that the description and value of the goods were misdeclared with an intent to evade. The value determined by the surveyors was accepted, and the misdeclaration led to confiscation of the goods under Section 111(m) of the Customs Act.

Confiscation and Penalty Imposition:
The Commissioner confiscated the goods, redetermined their value, and imposed a penalty on the Proprietary firm and its proprietor for misdeclaration. The appellant argued that the goods were imported under a sales contract for scrap, but the tribunal upheld the confiscation, value determination, and penalty imposition under the Customs Act. The penalty on the Proprietor was set aside, partially allowing the appeal.

This judgment highlights the importance of accurate declaration of goods, proper examination procedures, and value determination in customs cases. The tribunal emphasized that misdeclaration can lead to confiscation and penalties under the Customs Act, even if the goods were imported under a sales contract with a different understanding of their nature.