2017 (10) TMI 300 - AT - Customs

Classification of goods - the goods imported were Video Door Phone and those were of Chinese origin - According to appellant, learned authority below mis-classified the goods although those were really calling bell for which adjudication fails - Held that - The goods that came to India were packed in container declaring to be Video Door Phone . Central Excise Notification No.14/2008 -CE(NT) dated 01.03.2008 grants abatement to the goods covered by CTH 8517. The goods covered by that entry should be telephone sets, including telephones with cordless handsets, video phones . But the goods of the appellant were Video Door Phone which is excluded from the purview of benefit of the abatement - When the goods came in disassembled form did not lose the characteristic thereof as complete goods and assembly of 3 components, was to result in complete goods of a description appearing in Customs Tariff Act, 1975 which was subject to RSP valuation. Mis-declaration of description as well as value (RSP) was made. Learned authority rightly classified the goods under the CTH 8517 which is not challenged by the appellant. Redemption fine upheld - penalty also upheld - appeal allowed in part.

Issues: Misclassification of goods, Duty evasion, Valuation of goods, Confiscation, Redemption fine, Penalty

Misclassification of goods:
The appellant argued that the goods imported were 'Video Door Phone,' but the revenue claimed that they were disassembled to evade duty and should be classified under a different category. The revenue asserted that the goods had the essential character of a specific product, whether assembled or disassembled, and were liable for duty under the Retail Sale Price (RSP) Notification. The tribunal upheld the classification made by the revenue, stating that the goods maintained their complete goods' characteristics even in disassembled form, and misdeclaration of description and value was evident. The appellant's challenge against the classification was not accepted.

Duty evasion:
The revenue contended that the goods were disassembled to avoid duty by availing concessions, and upon assembly and sale, they were subject to duty under the RSP Notification. The tribunal agreed with the revenue's argument and confirmed the appropriate duty levy based on the RSP valuation. The appellant's plea for relief was dismissed as the RSP value was not challenged.

Valuation of goods:
The adjudicating authority correctly valued the imported goods based on the nature and character of the items, as confirmed by the Vice President of the appellant. The goods were deemed misdeclared by the appellant, leading to confiscation. The tribunal upheld the authority's decision on valuation, classification, and confiscation, as the appellant did not contest the reasons provided by the authority.

Confiscation:
Due to the misdeclaration of goods by the appellant and the confirmation of appropriate valuation by the authority, the goods were deemed liable for confiscation. The tribunal upheld the decision on confiscation as the appellant did not challenge the authority's findings.

Redemption fine:
An initial fine of ?12 lakhs was imposed, but considering the facts and market selling price, the tribunal reduced the fine to ?5,00,000. The tribunal found the imposition of the redemption fine at ?5,00,000 appropriate based on the circumstances of the case.

Penalty:
A penalty of ?5,00,000 was imposed for deliberate misdeclaration, which was proven through the Vice President's statement. The tribunal upheld the penalty as the deliberate misdeclaration was established, and the appellant did not contest this aspect.

In conclusion, the appeals were partly allowed, with the tribunal ruling in favor of the revenue on issues related to misclassification, duty evasion, valuation, confiscation, redemption fine, and penalty.

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