2015 (4) TMI 201 - AT - Customs

Confiscation of goods - Imposition of redemption fine - Undervaluation - Import of old and used CRT monitors - requirement of licence under foreign trade policy 2004-2009 - Difference of opinion - Majority order - Held that - There is no dispute that the import of the second hand capital goods required an import license and this import is without any import licence and, thus, in violation of EXIM policy. The goods, therefore, have been correctly confiscated under section 111 (d) of Customs Act, 1962 - appellant have placed on record a detailed calculation regarding the landed cost of the imported goods, their sale price and margin of profit according to which the margin of profit after taking into account the detention charges would be 2.5% of the value. In these circumstances, I am of the view that the redemption fine of 10% of the value and penalty of 5% of the value as ordered by Hon ble Member( Judicial) would be correct. Whether declared transaction value of Rs . 5,81,005/-is acceptable or whether the same should be enhances to Rs . 6,91,711/-based on the Chartered Engineer s report - Held that - goods imported are of assorted brands and of different country origin and year of manufacture of goods is from 1999-2004. The goods thus are 4 to 8 year old and may be even obsolete models. There is no evidence of contemporaneous import of identical goods imported from the same suppliers at higher price. There is also no evidence placed on record to indicate that the appellant had paid any amount over and above the declared invoice value to the foreign suppliers. It is also not the allegation of the department that any of the conditions mentioned In proviso to Rule 3(2) of the customs valuation rule 2007 are present. In this situation merely on the basis of Chartered Engineer s report, which is based on the enquiry conducted behind the appellant s back and which had not even been supplied to the appellant, the declared transaction value cannot be rejected. - Decided partly in favour of assessee.

Summary

Issues Involved:
Difference of opinion between Member (Judicial) and Member (Technical) regarding the assessable value of imported goods, confiscation of goods, redemption fine, and penalty.

Analysis:
The appellant imported 980 old and used CRT computer monitors and filed a bill of entry without an import license. The department enhanced the value of the goods based on a Chartered Engineer's report, leading to confiscation and imposition of a redemption fine and penalty. The Commissioner (Appeals) upheld the order, resulting in an appeal. The Division Bench had a difference of opinion, leading to the matter being referred for decision.

The appellant argued that the declared value of the goods was correct, emphasizing the conditions specified in the Customs Valuation Rules. They cited precedents where the Tribunal set aside orders based on Chartered Engineer's reports. The department contended that the goods were imported without a license and defended the enhanced value determination. The Member (Judicial) reduced the redemption fine and penalty based on profit margin calculations provided by the appellant.

The Tribunal examined the import of second-hand goods without a license and the confiscation under the Customs Act. The dispute centered on the quantum of redemption fine and penalty. The Member (Judicial) reduced these amounts based on profit margin calculations. The Tribunal also evaluated the declared transaction value, considering the age and origin of the goods, absence of evidence for higher payments, and compliance with Customs Valuation Rules.

The final decision upheld the appeal regarding the assessable value, while confirming the confiscation and penalty, with a reduction in the redemption fine. The Tribunal agreed with the Member (Judicial) on the justification for the assessable value and the revised redemption fine and penalty percentages.

In conclusion, the Tribunal's decision balanced the legal requirements for assessing imported goods, considering the circumstances of the case and relevant precedents. The judgment clarified the application of Customs Valuation Rules and upheld the appeal on the assessable value while affirming the confiscation and penalty with reduced amounts.