2008 (10) TMI 180 - AT - Customs

Goods imported in the guise of Blister copper in violation of advance license were held liable for confiscation - held that Blister copper merits classification under chapter heading no. 74.02 - initially at time of provisional clearance duty paid on basis of proforma invoice of supplier - as per the contract, value re-determined was far more then value arrived at by adjudicating authority, hence there is no undervaluation or mis-declaration of value - so confiscation is not sustainable - held that the imported consignments are covered by the advance license, demand & penalty not justified

Issues Involved:
1. Classification of imported goods.
2. Alleged mis-declaration of the goods.
3. Valuation of the goods.
4. Validity of the advance license.
5. Imposition of customs duty.
6. Confiscation of goods.
7. Imposition of penalties.

Detailed Analysis:

1. Classification of Imported Goods:
The primary issue was whether the imported goods should be classified under Chapter Heading 74.02 (Blister Copper) or 74.03 (Refined Copper). The adjudicating authority classified the goods as refined copper based on the Deputy Chief Chemist's report, which indicated a copper content of 99.90%. However, the Tribunal found that blister copper can have up to 99% copper content and still not be considered refined copper. The Tribunal concluded that the goods were indeed blister copper and should be classified under Chapter Heading 74.02.

2. Alleged Mis-declaration of Goods:
The revenue argued that the goods were mis-declared as blister copper instead of refined copper. The Tribunal, however, noted that blister copper can be in the form of anodes and contain high copper content. The Tribunal held that there was no mis-declaration as the goods were correctly declared under Chapter Heading 74.02.

3. Valuation of the Goods:
The adjudicating authority rejected the declared value of USD 47,48,156 and re-determined it as USD 60,53,892 based on the London Metal Exchange (LME) prices. The Tribunal found that the final payment made by the appellant to the supplier was USD 70,20,188.33, which was higher than the value determined by the adjudicating authority. Thus, there was no undervaluation, and the declared value was accepted.

4. Validity of the Advance License:
The appellant initially produced an advance license for blister copper but later produced another for refined copper after the consignment was seized. The adjudicating authority did not accept the second license. The Tribunal, however, held that the first license was valid as the goods were correctly classified under Chapter Heading 74.02. Therefore, the advance license covered the imports.

5. Imposition of Customs Duty:
The adjudicating authority confirmed a customs duty demand of Rs. 8,47,51,690. The Tribunal, having found no mis-declaration or undervaluation and that the goods were covered by a valid advance license, set aside the demand for customs duty.

6. Confiscation of Goods:
The adjudicating authority ordered the confiscation of goods valued at Rs. 27,72,68,266 under Section 111(d) and 111(m) of the Customs Act, 1962, with a redemption fine of Rs. 7,00,00,000. The Tribunal, finding no mis-declaration and that the goods were covered by a valid advance license, set aside the confiscation order.

7. Imposition of Penalties:
Penalties were imposed on the appellant company and its officers under Section 112(ii) read with Section 112(a) of the Customs Act, 1962. The Tribunal, having set aside the confiscation and duty demand, also set aside the penalties imposed on the appellants.

Conclusion:
The Tribunal allowed the appeals, setting aside the confiscation, duty demand, and penalties. The imported goods were correctly classified under Chapter Heading 74.02 as blister copper, and there was no mis-declaration or undervaluation. The advance license was valid, covering the imports, and the appellants were not liable for the penalties imposed.

← Previous Next →