2019 (11) TMI 1612 - AT - Customs

Mis-declaration of imported goods - LG Chem brand - goods were declared as unbranded - branded goods or not - HELD THAT - The case put up by the appellant is that the goods were unbranded were and part of the trial production and may not meet the SET standard for Reverse Osmosis Element -Nano H2O (LGTWRO-1812-80), does not appear to be believable in view of the goods found with sticker of LG Chem brand and also found packed in cartons bearing LG Chem brand. Thus, there appears to be collusion between the appellant importer and the Shipper with regard to mis-declaration of the goods as regards the description. The impugned order does not suffer from any impropriety and any illegality - Appeal dismissed - decided against appellant.

Issues Involved:
1. Mis-declaration of imported goods.
2. Undervaluation of goods.
3. Liability for confiscation under Section 111 of the Customs Act, 1962.
4. Provisional release and warehousing of goods.
5. Penalties under Section 112(a) and 114A of the Customs Act, 1962.
6. Redemption fine under Section 125 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Mis-declaration of Imported Goods:
The appellant imported goods declared as "Reverse Osmosis Element 80 GPD" without any brand. However, upon examination, the goods were found to be of the "LG Chem" brand. The appellant's representative confirmed that the goods were branded, contrary to the declaration. The Commissioner (Appeals) noted that the goods were found with LG Chem stickers and packed in LG Chem branded cartons, confirming mis-declaration. The Tribunal upheld this finding, indicating collusion between the appellant and the shipper regarding the mis-declaration of the goods.

2. Undervaluation of Goods:
The declared value of the goods was ?13,90,663/- at USD 1.4 per piece, whereas the actual value, as confirmed by LG Electronics India (P) Ltd., was USD 6 per piece. The differential duty was calculated based on the re-determined value of ?52,90,077/-. The Commissioner (Appeals) set aside the enhancement of the assessable value, stating that the Department failed to provide reasonable and cogent evidence to reject the declared price. The Tribunal upheld this decision, restoring the assessment at the declared value.

3. Liability for Confiscation under Section 111 of the Customs Act, 1962:
The goods were found to be mis-declared and undervalued, making them liable for confiscation under Section 111(m) of the Customs Act, 1962. The Commissioner (Appeals) confirmed the liability for confiscation due to mis-declaration of the brand name. The Tribunal upheld this finding, dismissing the appellant's argument that the goods were part of a trial production and not intentionally mis-declared.

4. Provisional Release and Warehousing of Goods:
The appellant requested provisional release and warehousing of the goods, citing their perishable nature. The jurisdictional authority initially denied the request, suspecting the goods to be counterfeit. However, the goods were later provisionally released upon modified conditions as per the order of the Commissioner (Appeals), which included a bank guarantee and a bond equivalent to the CIF value.

5. Penalties under Section 112(a) and 114A of the Customs Act, 1962:
Penalties were imposed on the appellant company and its representatives under Sections 112(a) and 114A of the Customs Act, 1962. The Commissioner (Appeals) set aside the penalty under Section 114A on the appellant company but upheld the penalty under Section 112(a) on the Director and the Authorised Signatory. The Tribunal agreed with the Commissioner (Appeals), setting aside the penalties on the individuals.

6. Redemption Fine under Section 125 of the Customs Act, 1962:
The Adjudicating Authority imposed a redemption fine of ?10,00,000/- under Section 125 of the Customs Act, 1962. The Commissioner (Appeals) reduced this fine to ?1,00,000/-, considering the declared assessable value. The Tribunal upheld this reduction, dismissing the appellant's appeal for complete waiver of the redemption fine.

Conclusion:
The Tribunal concluded that the appellant's mis-declaration and undervaluation were evident, justifying the confiscation of goods and the imposition of a redemption fine. The penalties on the appellant company were set aside, but the penalties on the individuals were upheld. The declared value was restored, and the appeal was dismissed, affirming the findings of the Commissioner (Appeals).

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