2007 (8) TMI 152 - AT - Customs

Confiscation of goods Appellant appeal against the decision of the Commissioner though which confiscate the goods of appellant without giving the option of the redemption on the ground that the good is restricted only not prohibited and imported with a valid license Appeals allowed by way of remand

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery in respect of penalty
2. Out-of-turn disposal of the appeal
3. Confiscation of imported goods under Customs Act
4. Redemption of confiscated goods under Section 125 of the Act

Waiver of Pre-deposit and Stay of Recovery:
The Tribunal had two applications in each appeal for waiver of pre-deposit and stay of recovery in relation to penalty. After reviewing the records and hearing both sides, the Tribunal decided that the appeals themselves needed final disposal at that stage. Consequently, the Tribunal dispensed with pre-deposit, granted the prayer for out-of-turn disposal of appeals, and proceeded to take up the appeals.

Confiscation of Imported Goods Under Customs Act:
The appellants had imported second-hand photocopiers without the required import license, leading to an undervaluation of goods as per the valuation reports by Chartered Engineers. The Customs authorities found gross undervaluation and proposed to enhance the value, which was accepted by the importers. The Commissioner confiscated the goods covered by two Bills of Entry under Sections 111(d) and (m) of the Customs Act and imposed penalties on the importers under Section 112(a) of the Act. The importers contended that the goods were 'restricted' and not 'prohibited,' thus should have been given the option to redeem the goods under Section 125 of the Act.

Redemption of Confiscated Goods Under Section 125 of the Act:
In the appeals against the Commissioner's orders, the importers argued that the goods were not 'prohibited' but 'restricted,' warranting the option for redemption under Section 125. The Tribunal noted that the confiscation was under Sections 111(d) and (m) of the Customs Act, and based on Supreme Court precedent, considered the goods as imported in breach of a prohibition. The Tribunal held that the adjudicating authority should have allowed the importer to redeem the confiscated goods under Section 125, especially considering the goods were 'restricted' for importation. The Tribunal set aside the impugned orders, directing the Commissioner to give the appellants an option to redeem the goods under Section 125 against payment of a reasonable fine, to be determined after hearing the party.

Conclusion:
The Tribunal allowed the appeals by remanding the matter to the Commissioner for providing the appellants with the opportunity to redeem the goods under Section 125 of the Customs Act. The Tribunal emphasized that the determination of the fine and penalty was at the discretion of the adjudicating authority, to be exercised fairly and justly, without a fixed formula.