2017 (1) TMI 1741 - AT - Customs

Valuation of imported goods - unbranded mobile phones - goods which were declared as unbranded mobile phones were found with the brand names of Arise and Tiger brands - enhancement of declared value - confiscation - redemption fine - penalty - HELD THAT - The enhancement of value has not been challenged by the appellant and hence the same is not being discussed in this order. The case of Revenue is that the import goods have been declared as unbranded mobile phones; however the goods on examination were found to be mobile phone bearing the brand names of Arise and Tiger . Accordingly, the goods have been held to mis-declared and hence liable for confiscation under Section 111(m) of the Customs Act, 1962. The goods received were with a brand name. To this extent mis-declaration stands established. However, we note that the mobile phones brands names of Arise and Tiger are not well known in the Indian market. These brand names are not even registered with Custom IBR Rules, 2007. The appellant has also submitted that these brand names are not even registered in China. The redemption fine reduced from 8 lakhs to 1 lakh and the penalty from 2,12,623/- to ₹ 25,000/- - appeal allowed in part.

Summary

Issues: Mis-declaration of imported goods, confiscation under Section 111(m) of the Customs Act, 1962, imposition of redemption fine, imposition of penalty under Section 114 A of the Customs Act, 1962

In this case, the appellant imported a consignment of mobile phones declaring them as unbranded, but Customs examination revealed the presence of branded phones. The Customs authorities alleged mis-declaration and enhanced the value of the goods based on local market prices. The adjudicating authority ordered confiscation under Section 111(m) of the Customs Act, 1962, and imposed a redemption fine of ?8 lakhs along with a penalty of ?2,12,632. The appellant contested the confiscation and penalties, claiming they ordered unbranded phones but received branded ones due to the overseas supplier. The appellant argued that the brand names were not well-known and not registered with Customs IPR, 2007. The Departmental Representative supported the original findings. The Tribunal acknowledged the mis-declaration but considered the obscure brand names and lack of registration in India and China. Consequently, the redemption fine was reduced to ?1 lakh and the penalty to ?25,000, showing leniency based on the brand's limited recognition in the market. The appeal was disposed of with the modified penalties.