2015 (10) TMI 2441 - AT - Customs

Valuation Copper scrap of Birch and Dream variety Appellant contends that value of goods is not based upon the contemporaneous import and no reason to suspect that one of country of origin is correct and other one is fake Redemption fine not based on market inquiry but arbitrarily and same is on the higher side along with penalty Revenue contends that goods were mis-declared - Clove variety described as scraps of Dream variety Country of origin is fake and redemption fine and penalty are not on higher side. Held That - Certificate relating to country of origin was found as fake as it was confirmed by Sri Lanka Authorities that it has not been issued by them Confiscation of goods in order. Since matter is old and getting details of market inquiry is not possible, imposition of redemption fine is not interfered with Decided in favour of Revenue. Imposition of penalty is found to be on higher side and same is reduced from ₹ 2 lakhs to Rs. ₹ 50,000/- - Decided in favour of assessee.

Summary

Issues: Mis-declaration of goods, Country of origin certificate authenticity, Imposition of redemption fine, Imposition of penalty

In this case, the appellant imported Copper Scrap claiming concessional duty rates based on the country of origin being Sri Lanka. However, it was discovered that the Copper Scrap declared as Dream variety was actually of Clove variety, which has a higher copper content and value. The authenticity of the country of origin certificate was also questioned. The assessable value of the goods was re-assessed based on chemical analysis and prevailing prices, and the benefit of exemption for goods of Sri Lanka origin was denied. The goods were confiscated under the Customs Act, and a redemption fine of Rs. 5 lakhs and a penalty of Rs. 2 lakhs were imposed.

The appellant argued that they imported two varieties of copper scrap in good faith and were unaware of any misrepresentation. They claimed that the value of the goods was not accurately determined and that the redemption fine was imposed arbitrarily. They cited a Supreme Court judgment to support their argument that redemption fines should be based on market surveys. The appellant contended that the penalty imposed was excessive compared to the duty evaded.

The Revenue contended that the appellant mis-declared the goods and submitted a fake country of origin certificate, potentially gaining an ineligible duty benefit. They argued that the redemption fine and penalty were justified considering the misrepresentation and duty implications.

The Tribunal acknowledged the mis-declaration of goods and the fake country of origin certificate, leading to the confiscation of the goods. They noted the higher value of the Clove variety scrap and upheld the confiscation. Regarding the redemption fine, the Tribunal found no grounds to interfere with the original order, as market inquiry details were not provided due to the age of the case. The penalty imposed was deemed excessive in relation to the duty evaded, and it was reduced from Rs. 2 lakhs to Rs. 50,000. The appeal was dismissed, except for the modification in the penalty amount.