2015 (4) TMI 560 - AT - Customs

Confiscation of goods - Redemption fine - Classification of goods - Provisional assessment - antique goods - Held that - When the goods were examined in the presence of the importer, the appellant-importer provided the information and the goods were segregated as more than 100 years old and less than 100 years old . - appellant Sri. Farokh S. Todywala has clearly admitted that he is in the business of procuring the old coins and medals from collectors and these are put to auctions - From these evidences available on record, it is difficult to accept the plea that the goods merit classification under Chapter 71 or 74. Goods falling under these chapter are traded by dealers in these goods and are for use as such. They are not sold by numismatists of through auctions and they also do not have any historic or numismatic interests. Therefore, the classification of these goods under Chapter 71 or 74 based on the metal content is clearly ruled out. In any case, Chapter Note 3(p) to Chapter 71 and Chapter note to 74 clearly exclude these items from the scope and coverage of the articles falling under the said chapters. As regards goods which are less than 100 years old, they do not qualify as antiques because of the age factor and therefore, they would more appropriately fall under heading 97.05. As regards goods of age more than 100 years, only goods which are not covered under CTH 97.01 to 97.05 merit classification under CTH 97.06 as is clear from the HSN Explanatory Notes. - As per the statement of the appellant importer, the goods imported by him are old and used items and would be sold through auction to collectors who have numismatic or historic interest in collections. From these evidences available on record and the coverage of CTH 97.05 as given in the HSN explanatory notes, we are of the considered view that the goods imported by the appellant merit classification under CTH 97.05. - Since the goods falling under CTH 97.05 are restricted items, they need a licence for importation. In the present case, it is a fact on record that the appellant did not have the requisite licence and the goods are liable to confiscation under section 111(d) of the Customs Act. In view of this legal position, the confiscation and the option to redeem the goods on payment of fine ordered by the adjudicating authority cannot be faulted at all. The last issue is regarding the direction given in the impugned order to keep the assessments provisional since the value declared is notional and not the real transaction value. However, in the show cause notice issued to the appellant, there is no such proposal and the show cause notice specifically proposes to levy the goods to duty on a value of ₹ 9,62,713/- at the rate applicable to goods falling under CTH 9705. Thus, the direction to keep the assessment provisional is contrary to the proposal in the show cause notice and therefore, cannot be sustained and accordingly, we set aside the same. - Thus while we uphold the classification of the goods under CTH 9705 and the consequent confiscation with option for redemption and imposition of penalty, we set aside the direction to keep the assessment provisional on account of valuation - Decided partly in favour of assessee.

Summary

Issues: Classification of imported goods under CTH 9705, Confiscation under Section 111(d) of the Customs Act, Imposition of penalty under Section 112(a), Provisional assessment of goods, Redemption of goods, Re-export of goods, Direction to keep assessments provisional

Classification of Goods under CTH 9705:
The appellant imported various items and claimed classification under different Customs Tariff Headings (CTH). The Revenue argued for classification under CTH 9705 as "collections and collector's pieces." The Tribunal analyzed the descriptions of competing tariff entries and noted that goods falling under Chapter 71 or 74 were not appropriate due to their trade nature. The Tribunal found that the imported goods, described as old and used collector's items, were more suitable for classification under CTH 9705 as collector's pieces based on the HSN Explanatory Notes. The Tribunal upheld this classification, emphasizing the need for a license for importing such restricted items, leading to confiscation under Section 111(d) of the Customs Act.

Confiscation under Section 111(d) and Imposition of Penalty:
The Tribunal justified the confiscation of goods and the imposition of a fine of &8377; 90,000 for redemption, considering the nature of the imported items and the lack of a required import license. Additionally, a penalty of &8377; 10,000 under Section 112(a) was deemed reasonable, as no mens rea was necessary for its imposition. The Tribunal found these actions lawful and appropriate given the circumstances of the case.

Provisional Assessment and Redemption of Goods:
The Tribunal addressed the issue of keeping the assessment provisional due to the declared value being notional. It noted that the show cause notice did not propose provisional assessment, contradicting the subsequent order. Consequently, the Tribunal set aside the direction for provisional assessment while upholding the classification, confiscation, and penalty decisions.

Re-export of Goods and Further Directions:
The appellant's plea for re-exporting the goods was not considered at the appellate stage as it was not raised before the lower authorities. The Tribunal directed the appellant to present this plea to the lower authorities for proper consideration. Any such new plea should be evaluated and decided in accordance with the law by the lower authorities.

Conclusion:
The Tribunal upheld the classification of goods under CTH 9705, the confiscation with redemption option, and the penalty imposition. It set aside the provisional assessment direction due to valuation discrepancies. The appellant was advised to address any re-export requests to the lower authorities for appropriate consideration. The judgment was pronounced on 30.12.2014, concluding the appeal in the mentioned terms.