2010 (12) TMI 1140 - AT - Customs

Summary

Issues Involved:
1. Misdeclaration of goods.
2. Valuation of imported goods.
3. Confiscation of goods.
4. Imposition of penalties.
5. Liability of legal heirs for penalties.

Detailed Analysis:

1. Misdeclaration of Goods:
The appellants contested that they did not misdeclare the goods imported as postal parcels. They argued that the foreign supplier correctly described the goods by their chemical names for parcels Nos. 10568 and 10690 and that the misdescription of parcel No. 10963 as '2-Nitro Imidazole' was due to a clerical error. They provided the supplier's invoices with the correct description and value when requested. The Tribunal noted that two of the three parcels were correctly described, while the third parcel had a misdescription. The adjudicating authority needs to re-examine whether the appellants misdeclared the description of the goods, especially considering the customs procedures and regulations.

2. Valuation of Imported Goods:
The appellants argued that the declared value of US $ 6,000 per kg, based on the supplier's invoice, should be accepted as the transaction value. The adjudicating authority enhanced the value without providing valid reasons for rejecting the transaction value, which contradicts the apex court's judgment in Eicher Tractors Limited (2000 (122) E.L.T. 321 (S.C.)). The Tribunal directed that the value of the goods should be reassessed afresh, giving the appellants an opportunity to be heard, and the reasons for rejecting the transaction value should be clearly stated.

3. Confiscation of Goods:
The Commissioner ordered the confiscation of the goods under Section 111(m) of the Customs Act due to misdeclaration of description and value. The Tribunal found that there was no misdescription for parcels Nos. 10568 and 10690, but there was a misdescription for parcel No. 10963. The adjudicating authority needs to re-examine the confiscability of the goods under Section 111(m) in light of the correct description and value provided by the appellants.

4. Imposition of Penalties:
The Commissioner imposed penalties on LCPL and its Director under Section 112(a) of the Customs Act. The Tribunal noted that the penalties were based on the findings of misdeclaration and incorrect valuation, which need to be re-examined. The penalties should be reconsidered after the reassessment of the description and value of the goods.

5. Liability of Legal Heirs for Penalties:
The Tribunal mentioned that the legal heirs of the deceased Director, N.P. Jajodia, took over the prosecution of the appeal. The adjudicating authority should examine whether the legal heirs can be held liable for penalties under Section 112 of the Customs Act, in case the deceased is found liable for such penalties.

Conclusion:
The Tribunal set aside the impugned order and remanded the case to the Commissioner of Customs for a fresh examination of all issues. The Commissioner should pass a speaking order after re-evaluating the description, value, confiscability, and penalties, giving the appellants a reasonable opportunity to be heard. The question of the legal heirs' liability for penalties should also be addressed. Both appeals were allowed by way of remand.