2013 (9) TMI 944 - AT - Customs

Mis declaration of goods enhancement of value confiscation of goods u/s 111(m) redemption fine penalty u/s 112(a) Held that - The order passed by the lower appellate authority was contradictory in terms - On the one hand, the appellate authority records a finding that confiscation u/s 111(m) of the Customs Act was not sustainable and consequently redemption fine and penalty was not applicable - At the same time the appellate authority also gives a finding that the appellant had to pay appropriate duty as applicable on the enhanced value as per the final assessment - Section 111(m) deals with mis-declaration of value or any other material particulars - If there was no mis-declaration Section 111(m) was not applicable and consequently the question of payment of duty on enhanced value does not arise at all - there was no application of mind by the appellate authority while passing the order order was not sustainable matter remanded back for fresh consideration decided in favour of assessee.

Summary

Issues:
1. Misdeclaration of value in import of polyester fabrics.
2. Confiscation of goods and imposition of penalty.
3. Appeal against Order-in-appeal No. 388/389/MCH/JC/CFS(M)/2012.
4. Contradictory findings by lower appellate authority.
5. Application of Section 111(m) of the Customs Act, 1962.
6. Consideration of market enquiry report.

Analysis:
The case involves a dispute regarding the import of polyester fabrics where the Revenue alleged misdeclaration of value by the importer, leading to an enhancement of value, confiscation of goods, and imposition of penalties. The lower appellate authority held that confiscation under Section 111(m) of the Customs Act was not sustainable and directed the importer to pay appropriate duty on the enhanced value. However, the authority also allowed the option for re-exporting the goods, creating a contradictory situation.

Upon review, the Appellate Tribunal found the lower authority's order to be contradictory and lacking proper application of mind. Section 111(m) pertains to misdeclaration of value, and if no misdeclaration exists, the section is inapplicable, thereby negating the need for payment of duty on an enhanced value. The Tribunal emphasized that the option for re-exporting the goods was provided to the importer, rendering the lower authority's decision unsustainable.

As a result, the Tribunal set aside the impugned order and remanded the matter back to the original adjudicating authority for a fresh consideration. The Tribunal directed the authority to provide a copy of the market enquiry report to the importer for verification and submissions, followed by issuing a reasoned order in accordance with the law.

Ultimately, the appeal was disposed of by way of remand, and the stay application was also resolved accordingly. The case highlights the importance of proper application of relevant provisions and ensuring a fair opportunity for parties to present their case based on all available information.