2006 (2) TMI 368 - AT - Customs

Summary

Issues:
1. Confiscation of consignment for under-valuation.
2. Imposition of redemption fine and personal penalty.
3. Discrepancy in declaration of goods.
4. Enhancement of value based on fabric stretch type.
5. Classification of goods as stock lot.
6. Contemporaneous imports comparison.
7. Legality of Commissioner's order.

Analysis:
1. The Commissioner of Customs confiscated a consignment of Synthetic Warp Knitted Pile Fabrics due to under-valuation, offering redemption on payment of a fine. Additionally, a personal penalty was imposed under Section 112 (a) of the Act.

2. The dispute arose from the declaration of goods as "Synthetic Warp Knitted Pile Fabrics" without specifying whether they were two way stretch or four way stretch. The examination revealed a mix of 80% two way stretch and 20% four way stretch fabrics, leading to a proposed value enhancement for the latter. The appellant argued that as the goods were stock lot with varied characteristics, the value of the four way stretch fabrics could not be increased based on exclusive consignments of such fabrics.

3. The appellant's contention was supported, highlighting that in a mixed lot consignment, the value of specific types cannot be enhanced by comparing with exclusive consignments of that type. The Tribunal agreed with this argument, setting aside the Commissioner's order and granting relief to the appellants.

4. The judgment emphasized the importance of accurately declaring goods and the need for proportionate valuation adjustments based on the actual composition of mixed consignments. The legality of the Commissioner's decision was questioned and subsequently overturned by the Tribunal, providing a significant ruling on valuation practices in customs cases.

5. The case also underscored the relevance of contemporaneous imports in determining values, clarifying that comparisons should be made considering the nature of the imported goods and not merely based on isolated characteristics. The decision offered clarity on the treatment of mixed lot consignments and the limitations on value enhancements in such scenarios, ensuring fair and justified customs assessments.