2007 (4) TMI 107 - AT - Customs

Valuation (Custom) Department contended that appellant has declare the value of imported car is less than their actual value and accordingly redemption fine and penalty imposed on him Held that the intention is not mala fide, so that penalty amount reduced

Summary

Issues:
1. Valuation of imported car.
2. Compliance with Foreign Trade Policy regulations.
3. Confiscation, fine, and penalty imposed.

Issue 1: Valuation of imported car:
The appellant imported a Mercedes Benz car and declared its value at Rs. 3 lakhs. The Commissioner rejected this value and determined the assessable value at Rs. 35,17,452 under Rule 8 of the Customs Valuation Rules, 1988. The appellant contested this valuation and produced various evidences to support a lower value. However, the adjudicating authority rejected these evidences and justified the valuation based on the list price. The authorized dealer confirmed a list price of Euro 107,100, which was considered for assessment purposes. The Commissioner added amounts for extra fitting and refurbishment without proper justification, leading to their exclusion. The assessment was finally based on Euro 107,100, with reductions in fine and penalty due to the circumstances. The appellant's failure to produce the correct value at the time of import affected the outcome, despite citing relevant case laws.

Issue 2: Compliance with Foreign Trade Policy regulations:
The Foreign Trade Policy required the importer to possess the car abroad for at least one year before import, a condition not met in this case. As a result, the car was held liable for confiscation under Section 111(d) of the Customs Act read with Section 3(3) of the F.T. (D&R) Act, 1992. The appellant's liability for penalty under Section 112(a) of the Customs Act was justified based on this non-compliance.

Issue 3: Confiscation, fine, and penalty imposed:
The Commissioner ordered confiscation of the car, imposition of a redemption fine of Rs. 9 lakhs, and a penalty of Rs. 5 lakhs on the appellant. The appellant challenged these decisions, arguing that the value paid was the transaction value and contesting the arbitrary nature of the fine and penalty. The Tribunal reduced the redemption fine to Rs. 5 lakhs and the penalty to Rs. 50,000 due to the circumstances and absence of mala fides. Other issues raised by the appellant, such as demurrage charges and post-import conditions, were not addressed as they were not part of the adjudication.

In conclusion, the Tribunal partially allowed the appeal by adjusting the valuation based on the authorized dealer's confirmation, reducing the fines and penalties, and addressing specific issues raised by the appellant. The judgment highlighted the importance of accurate valuation, compliance with regulations, and the impact of evidence presented in customs cases.