2007 (7) TMI 505 - AT - Customs

Issues Involved:
1. Correct valuation of imported items.
2. Rejection of transaction value.
3. Enhancement of value under Rule 5 of Customs Valuation Rules, 1988.
4. Confiscation of goods under Section 111(m) of the Customs Act, 1962.
5. Imposition of penalties under Section 114A of the Customs Act.

Detailed Analysis:

Issue 1: Correct Valuation of Imported Items
The appeals focused on the correct valuation of anamorphic lenses, Jimmy Jib Cranes, and Angenieux HR 25-250mm lens imported by the appellants. The declared values of the lenses were significantly lower than comparable imports, prompting an investigation by customs authorities. The declared values were 775 Euro, 895 Euro, 1050 Euro, and 1200 Euro for different lenses, which were contested by the department based on evidence of higher prices for similar goods imported by other entities.

Issue 2: Rejection of Transaction Value
The customs department proposed rejecting the transaction value of Rs. 2,50,245.43 under Rule 10A of the Customs Valuation Rules, 1988, suggesting it be enhanced to Rs. 44,51,752/- (Euro 92,360) FOB. The appellants argued that the goods were old stock from 1990, sold at a lower price due to defects and age. However, the department found contradictions in the statements of the appellants regarding the age and condition of the goods and noted that the importers did not declare the goods as old stock at the time of import.

Issue 3: Enhancement of Value under Rule 5 of Customs Valuation Rules, 1988
The Commissioner enhanced the value of the lenses based on the price of similar goods imported by M/s. Ushakiron Movies Pvt. Ltd. The department's investigation revealed that the appellants had imported identical lenses earlier at much higher prices, and expert opinions confirmed the lenses were in good condition. The Tribunal upheld the Commissioner's decision to enhance the value of the lenses imported on 20-12-2002 and 9-10-2002, rejecting the appellants' claim that the goods were from a stock lot.

Issue 4: Confiscation of Goods under Section 111(m) of the Customs Act, 1962
The Commissioner ordered the confiscation of the imported goods under Section 111(m) of the Customs Act, 1962, with a redemption fine of Rs. 15 lakhs. The Tribunal upheld the confiscation but reduced the redemption fine to Rs. 5 lakhs, considering the prolonged detention of the goods by the department.

Issue 5: Imposition of Penalties under Section 114A of the Customs Act
Penalties were imposed on M/s. VCS and M/s. VCSPL under Section 114A of the Customs Act for the undervaluation of goods. The Tribunal upheld the imposition of penalties but reduced the amounts: M/s. VCS's penalty was reduced to Rs. 5,00,000/- from Rs. 53,69,216/-, M/s. VCSPL's penalty was reduced to Rs. 4,50,000/- from Rs. 45,38,394/-, and Ms. Nivedita V. Parab's penalty was reduced to Rs. 50,000/-.

Conclusion:
The Tribunal upheld the Commissioner's findings on the undervaluation and enhancement of the value of the imported lenses, the confiscation of goods, and the imposition of penalties, with some reductions in the amounts of penalties and the redemption fine. The appeals were disposed of accordingly.

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