2006 (1) TMI 499 - AT - Central Excise

Summary

Issues: Valuation of imported goods, misdeclaration of value, confiscation of goods, imposition of redemption fine and penalty, challenge against the quanta of fine and penalty.

In this case, the appellant imported VCD players and declared a value of HKD 47 without producing the supplier's invoice. Customs records indicated a contemporaneous price of USD 18 per set of VCD players, leading to valuation under Rule 8 of the Customs Valuation Rules, 1988. The Commissioner confiscated the goods under Section 111(m) of the Customs Act due to misdeclaration, offering redemption on payment of Rs. 5 lakhs and imposing a penalty of Rs. 2.5 lakhs. The appellant challenged the enhancement of value but accepted it for benefit claim, arguing against the imposition of redemption fine and penalty, or for a reduction in the imposed amounts.

Upon hearing both parties, the Tribunal noted the appellant's initial agreement to clear the goods at the Customs-recorded price but later admission of declaring lower value and willingness to accept the proposed enhancement to USD 18. This statement, never retracted, significantly impacted the case, leading the Tribunal to differ in applying a previous decision that vacated redemption fine and penalty. The Tribunal found the challenge against the imposed fine and penalty valid, considering the circumstances. The fine of Rs. 5 lakhs and penalty of Rs. 2.5 lakhs were deemed excessive, leading to a reduction to Rs. 1 lakh and Rs. 50,000, respectively, considering the nature of the offense as a declaration of lesser value for duty payment without unauthorized importation.

In conclusion, the Tribunal modified the impugned order, reducing the fine and penalty amounts accordingly. The appeal was disposed of with the revised terms, emphasizing the importance of considering the case's circumstances in determining the appropriate quanta of fine and penalty.