2015 (3) TMI 1073 - AT - Customs

Confiscation of goods - Misdeclaration of goods - adoption of MRP before clearance - Held that - Misdeclaration of description became patent upon detection by Customs. It was misdeclaration when there was concealment of other goods by plastic toys. Such material fact established the goods to be smuggled goods under section 2 (39) of the Customs Act, 1962. Accordingly, confiscation of the goods was bound to be ordered. - appellant lost its entire right to ask Customs to adopt the value suggested by it when it smuggled the goods into India. Confiscation was warranted under law. Reasonable valuation of goods was adopted by Customs in the case which cannot be ruled out. It was left open to the appellant to adduce evidence to dispel the value adopted by Customs. But that was not done. There is no dispute by appellant with regard to the demand of duty. Therefore, that is confirmed. It may be stated that the appellant is in trade and it is well within its knowledge about MRP of the goods. Therefore, plea of post-clearance for MRP fails to stand. - Misdeclaration being patent upon concealment and deliberate misdeclaration of description and value of the goods, the amount of penalty imposed by Authority below is justified since interest of Revenue is prejudiced - Decided partly in favour of assessee.

Summary

Issues: Misdeclaration of goods, market enquiry valuation, confiscation of goods, imposition of penalty and redemption fine

In this judgment by the Appellate Tribunal CESTAT CHENNAI, it was established that 144 items entered into India, declared as plastic toys in the bill of exchange, but upon inspection, it was found that majority of the goods were different items like maps, clocks, photo frames, and vacuum flasks, with only 31 items being actual toys. This misdeclaration led to the concealment of other goods as toys, resulting in the confiscation of the imported goods and imposition of penalties. The misdeclaration was considered a basis for confiscation under section 2(39) of the Customs Act, 1962.

Regarding the market enquiry valuation, the appellant argued that Customs adopted a higher value for the plastic toys after a market enquiry, causing prejudice in duty levy, penalty, and redemption fine. However, the Tribunal held that the appellant lost the right to object to the valuation as the goods were smuggled into India. The Customs' valuation was deemed reasonable, and the appellant failed to provide evidence to challenge it. The Tribunal also dismissed the plea that MRP cannot be fixed before clearance, stating that as a trader, the appellant should have knowledge of the MRP of the goods.

The judgment also addressed the quantum of redemption fine and penalty. The Tribunal found the redemption fine of Rs. 1,50,000 justified based on the goods' value but reduced it to Rs. 1,00,000 considering a reasonable margin in the trade of plastic toys. The penalty imposed by the lower authority was upheld as the deliberate misdeclaration and concealment prejudiced the revenue's interest. The Tribunal allowed the appeal partly by adjusting the redemption fine but maintained the penalty amount imposed by the lower authority.