2008 (3) TMI 196 - AT - Customs

Imported Patterns Fixtures Samples Units etc. Valuation - Since the appellants had in their own contract agreed to pay fees for the patterns fixtures and samples and had also contracted for payment of technical know how fee we find that the appellants had mis-declared the value - Since the value has been mis-declared confiscation of goods is justified allegation that old & used goods were shown as new to obtain benefit under EPCG scheme is not proved penalty is reduced

Summary

Issues involved:
1. Mis-declaration of the value of imported goods.
2. Violation of provisions of Customs Act, Customs Valuation Rules, and Export & Import Policy.
3. Imposition of penalty on the appellant.

Analysis:

Issue 1: Mis-declaration of the value of imported goods
The appellant imported "Patterns, Fixtures, Samples Units and its Accessories" from Germany under an invoice. The lower authorities found that the appellant attempted to clear old and used capital goods as new ones by suppressing material particulars. The adjudicating authority concluded that the goods were old and used, leading to contravention of Customs Act sections. The appellant argued that the value of goods was correctly declared, emphasizing the agreement with the foreign party. However, the Tribunal found that the value was mis-declared as the patterns, fixtures, and samples were essential for manufacturing products in India. The mis-declaration justified confiscation of goods under Section 111(m) of the Customs Act.

Issue 2: Violation of provisions of Customs Act, Customs Valuation Rules, and Export & Import Policy
The penalty was imposed on the appellant for violating Customs Act provisions, Customs Valuation Rules, and Export & Import Policy. The Tribunal noted that while the goods were liable for confiscation, the allegation of violating the Export & Import Policy was not established. It was highlighted that second-hand goods can be imported under specific licenses. The penalty was deemed excessive, leading to a reduction to Rs. 5,000 to ensure justice in the case.

Issue 3: Imposition of penalty on the appellant
The penalty was imposed for manifold violations of Customs Act provisions, Customs Valuation Rules, and Export & Import Policy. The Tribunal acknowledged the mis-declaration of goods but found the penalty excessive due to the nature of the violations. Consequently, the penalty was reduced to Rs. 5,000 to align with the circumstances of the case. The appeal was disposed of based on these findings, providing a balanced resolution to the legal issues at hand.