2016 (12) TMI 1030 - AT - Customs

Misdeclaration of value of imported goods - confiscation - Revision of Redemption Fine and Penalty - Held that - the wrong declaration of value was on account of a mistake by the supplier sending in giving the wrong invoice. However, no mala fide intention can be attributed to the importer - the Bill of Entry was filed declaring the value as 35 Euro Rs 2583/-However, the goods were found to be valued at Euro 1628. It is also a fact that but for the /customs opening the consignment, the mistake in declaration of value would have gone unnoticed - even though the goods are liable for confiscation under Section 111(m), there is no justification for imposing any redemption fine and penalty - appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
1. Confiscation of goods due to undervaluation
2. Imposition of redemption fine and penalty
3. Justification for confiscation and penalty

Analysis:
The case involved an appeal against an Order-ln-Appeal where the importer faced issues regarding the declared value of imported goods. The importer initially indicated a nominal charge of 35 Euro [Rs. 2,583/-] for a pump supplied free of charge. Customs raised doubts about the value, leading to the importer submitting the correct invoice valuing the goods at Euro 1628 [Rs 1.20 lakh]. Consequently, proceedings were initiated, and the goods were confiscated, with redemption allowed against a fine and penalty. The appellant sought revision of the redemption fine and penalty, arguing that the goods were sent as a free replacement, not intended for sale.

The original authority imposed a redemption fine of &8377; 60,000/- and a penalty of &8377; 30,000/-, which was reduced in the impugned order to &8377; 19,000/- and &8377; 10,000/-, respectively. The appellant contended that there was no intention to mis-declare the value, attributing the error to the supplier's incorrect invoice. They relied on case law to argue against confiscation, emphasizing the absence of mala fide intent.

During the hearing, the Departmental Representative argued that confiscation was justified under Section 111(m) due to the discrepancy in the declared value. The Customs examination revealed the undervaluation, leading to the correct invoice being provided by the appellant. The tribunal considered both sides' submissions and the records, acknowledging the mistake in the declared value but noting the lack of malicious intent. While the goods were liable for confiscation under Section 111(m), the tribunal found no justification for imposing a redemption fine and penalty. Consequently, the impugned order was modified, and the appeal was disposed of without imposing additional penalties.

In conclusion, the judgment addressed the issues of confiscation, redemption fine, and penalty in the context of undervaluation of imported goods, emphasizing the absence of fraudulent intent and the corrective actions taken by the importer. The tribunal balanced the legal provisions with the factual circumstances to arrive at a decision that upheld the confiscation while waiving the additional financial penalties.