2007 (3) TMI 136 - AT - Customs

Confiscation and penalty - Alleged that appellants for the purpose of claiming assessment at lower rate split the consignment s in two different parts - Held that reclassification and revaluation ordered by adjudicating authority was correct and allowed but set aside the confiscation and penalties imposed

Summary

Issues:
1. Re-classification and revaluation of imported goods.
2. Confiscation, redemption fine, and penalty on provisionally assessed goods.
3. Valuation of electronic items under the Customs law.

Analysis:
1. The judgment addressed the issue of re-classification and revaluation of imported goods, specifically a 5-in-1 advanced multi-player system. The appellants had split the consignments into main units and speakers to claim a lower rate of duty. The tribunal upheld the adjudicating Commissioner's decision to assess the main units and speakers together as single units due to deliberate splitting to claim lower duty rates. The declared values were rejected as the transaction was artificially split, and a different valuation method was adopted based on comparable unbranded goods' value. The tribunal approved the reclassification and revaluation ordered by the Commissioner.

2. The judgment also dealt with the confiscation, redemption fine, and penalty imposed on provisionally assessed goods. The appellants argued that no penalties could be imposed before final assessment, citing relevant case law. The tribunal set aside the confiscation, redemption fine, and penalties as they were imposed before finalizing the assessment, highlighting the need for the department to reconsider its practice of allowing provisional release and assessment before finalization in light of the cited case law.

3. The judgment further discussed the valuation of various electronic items under the Customs law. The tribunal noted that the appellants had agreed to the value enhancement based on comparable import prices, which aligned with the WTO Valuation Agreement and Indian Customs Valuation Law. However, the tribunal emphasized that when the transaction value method is discarded, confiscation and penalties are not justified unless there is sufficient material to support such actions. Therefore, in these cases, the tribunal set aside the confiscation and penalties, as they were deemed unwarranted based on the facts and circumstances.

In conclusion, the judgment addressed the issues of reclassification, revaluation, confiscation, redemption fine, penalty on provisionally assessed goods, and valuation of electronic items under the Customs law, providing detailed analysis and legal reasoning for each issue.