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2016 (11) TMI 303 - AT - CustomsConfiscation - Notification No. 31/97 dated 1.4.1997 - Penalty - Held that - the said imports were not intended to be used for the export in respect of which the licence was obtained. Thus the goods are to be treated as imports made other than under advance licence - Notification 34(RE-98) (supra) regarding floor price restriction becomes applicable to import. Regarding valuation - merely because floor price has been fixed under ITC Policy the value of goods cannot be enhanced - The only ground for enhancing the value is the public notice issued by DGFT - enhancement of value is without any authority - Demand set aside - Decided in favor of assessee.
Issues Involved:
1. Confiscation of imported goods under Section 111(d) and 111(o) of the Customs Act, 1962. 2. Imposition of penalty under Section 112 of the Customs Act, 1962. 3. Enhancement of the declared value of imported goods. 4. Role and penalties of individual noticees. Detailed Analysis: 1. Confiscation of Imported Goods: The appellant, M/s. Metalman Industries Ltd., imported tin plate waste under an advance licence exempt from the floor price restriction imposed by DGFT Notification No. 34(RE-98). The Revenue issued a notice seeking confiscation under Section 111(d) of the Customs Act, 1962, as the imported goods were below the floor price of US$ 545 per MT. The appellant argued that the goods were imported under a valid advance licence and thus not subject to the floor price restriction. However, the Tribunal found that the appellant imported material of 0.45 mm thickness, which could not be used for the export items specified in the advance licence, indicating an intention to bypass import restrictions. Consequently, the goods were deemed liable for confiscation under Section 111(d) and 111(o) of the Customs Act, 1962. 2. Imposition of Penalty: The Tribunal upheld the penalty under Section 112(a) of the Customs Act, 1962, on the grounds that the appellant imported goods in violation of the floor price restriction and misused the advance licence. The appellant's failure to fulfill the conditions of the advance licence and the subsequent disposal of the goods in the domestic market further justified the penalty. 3. Enhancement of Declared Value: The appellant declared the value of the imported goods at US$ 288 per MT, which was enhanced to US$ 300 per MT by Customs. The show cause notice proposed further enhancement to US$ 545 per MT based on the DGFT floor price. The Tribunal found that the enhancement from US$ 300 to US$ 545 was without authority, as the value of goods cannot be increased merely based on the floor price set by the ITC Policy. The impugned order did not provide valid reasons for rejecting the declared value, leading the Tribunal to set aside the further enhancement. 4. Role and Penalties of Individual Noticees: The Tribunal examined the roles of Shri Vijay Soni, Shri Rajiv L. Soni, and Shri Mohan Jaykar. It was found that Shri Vijay Soni, Joint Managing Director, signed the application for the advance licence and his statement was recorded. No specific roles were identified for Shri Rajiv L. Soni and Shri Mohan Jaykar. Consequently, the penalties on Shri Rajiv L. Soni and Shri Mohan Jaykar were set aside, while the penalty on Shri Vijay Soni was upheld. Conclusion: The Tribunal upheld the confiscation of goods under Section 111(d) and 111(o) of the Customs Act, 1962, and the penalty under Section 112(a) against the appellant and Shri Vijay Soni. The proposed enhancement of the declared value to US$ 545 per MT was set aside. Penalties on Shri Rajiv L. Soni and Shri Mohan Jaykar were also set aside. The appeals were disposed of accordingly.
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