2018 (11) TMI 1764 - Commissioner - Customs

Valuation of imported goods - rejection of declared value - reliance placed on the NIDB data for redetermining the value - Confiscation - redemption fine - penalty - HELD THAT - In this case the undeclared cargo was noticed at the time of examination and the appellant has paid the entire duty on the declared goods. There is no corroborative material brought on record to reflect any mala fide intention on the part of the appellant. The circumstances of the case discussed above suggest that wrong shipment of the goods by the foreign supplier, was not on account of any intention on the part of the appellant and there is nothing to prove the incident other than a genuine mistake. Considering the facts and circumstances of the case, it can be said that appellant had no mala fide intention to misdeclare the goods and evade the customs duty. Hence, it is not a fit case to impose penalty under Section 112(a) of the Customs Act, 1962. Since, the appellant is now not claiming the goods and the appellant submits that the supplier vide letter dated 27-8-2018 above informed the appellant that it had no choice but to relinquish title to the goods, the department is left with no option but to order absolute confiscation of the imported goods. As the goods are absolutely confiscated the question of redemption fine does not arise. Further, since the goods are absolutely confiscated there is no question of payment of duty by the appellant. Instead of the option of redemption given in Order-in-Original, now the goods imported under Bill of Entry No. 6002022, dated 16-4-2018 are absolutely confiscated - penalty set aside. Appeal disposed off.

Summary

Issues Involved:
1. Confiscation of goods under Section 111(l) and 111(m) of the Customs Act, 1962.
2. Redetermination of value.
3. Imposition of penalty under Section 112(a) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Confiscation of Goods under Section 111(l) and 111(m) of the Customs Act, 1962:
The appellant, M/s. Dhruv Trading, filed a Bill of Entry for clearance of "Stock Lot of Mix Paper of poly coated, mix colour, metalized, kraft in tear sheets & end reels." Upon examination, undeclared consumer goods were found in the containers, which led to the confiscation of the goods under Section 111(l) and 111(m) of the Customs Act, 1962. The Original Authority (OA) held that the undeclared goods found in the import consignment had different values than the declared value, leading to the rejection of the declared values under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and redetermination under Rule 5 of the same rules. The appellant argued that the mistake was on the supplier's part, who admitted the error and requested re-export of the goods. The Commissioner of Customs (Appeals) found no evidence of complicity or intent to misdeclare by the appellant, concluding that the wrong shipment was due to a genuine mistake by the supplier.

2. Redetermination of Value:
The OA redetermined the value of the goods at ?38,91,000/- based on NIDB data, which was not provided to the appellant. The appellant contested this, stating that the valuation process was not followed as per the law. The Commissioner of Customs (Appeals) did not delve into the valuation aspect since the goods were ordered to be absolutely confiscated, rendering the valuation issue irrelevant to the appellant.

3. Imposition of Penalty under Section 112(a) of the Customs Act, 1962:
The OA imposed a penalty of ?2,50,000/- on the appellant under Section 112(a) of the Customs Act, 1962, for misdeclaration of goods. The appellant argued that there was no intent to evade customs duty and that the mistake was solely on the supplier's part, who admitted the error and relinquished the title of the goods. The Commissioner of Customs (Appeals) found no evidence of mala fide intention on the part of the appellant and concluded that the penalty was unwarranted. Therefore, the penalty imposed under Section 112(a) was set aside.

Conclusion:
The Commissioner of Customs (Appeals) upheld the OA's order with modifications. The goods were ordered to be absolutely confiscated, and the penalty imposed on the appellant was set aside. The appeal filed by M/s. Dhruv Trading was disposed of accordingly.