2018 (3) TMI 652 - AT - Customs

Valuation - rejection of declared value - counterfeit goods - Held that - there was an attempt to remove the container from the custodian without custom formalities by presenting fake documents. Further the attempt was that the goods should not be examined and should be removed to FTWZ, Khurja. The entire case was an attempt to import into India counterfeit goods and mis-declared the same to avoid its examination and clear at value lower than the required value to evade customs duty - appeal dismissed - decided against appellant.

Summary

Issues:
1. Classification of imported goods under various chapters.
2. Allegations of counterfeit goods and undervaluation.
3. Confiscation under Customs Act, 1962.
4. Imposition of penalties on the company and directors.

Issue 1: Classification of imported goods under various chapters.
The case involved M/s ANM Electronics Pvt. Ltd. importing goods declared as Mobile Phones, Ear Phones, Charger, Battery, Cards for DTH, and accessories of electronic items. The goods were supplied by M/s G Source (HK) International BLK-G, Hong Kong. The examination revealed that some cartons contained counterfeit Mobile Phones with Samsung branding, leading to suspicions of Intellectual Property Rights violations. The goods were classified under Chapter 85, 39, 48, 95, and investigations were carried out to determine the correct classification.

Issue 2: Allegations of counterfeit goods and undervaluation.
Customs Officers found that the carrier seal on the container was replaced, raising concerns about the authenticity of the goods. It was suspected that the imported goods were counterfeit and contravened Intellectual Property Rights, leading to their seizure under Section 110 of the Customs Act, 1962. Further investigations revealed that the value declared for the goods was grossly undervalued, prompting a show cause notice to the appellants for rejecting the declared assessable value and enhancing it to a higher amount.

Issue 3: Confiscation under Customs Act, 1962.
The Original Authority determined the value of the goods to be significantly higher than the declared value, leading to the confiscation of the counterfeit goods bearing the Samsung brand under Section 111(d) of the Customs Act, 1962. The remaining mis-declared goods were also confiscated under Section 111(m) of the Act. The appellants were given the option to pay a redemption fine in lieu of confiscation, along with customs duty and interest within a specified timeframe.

Issue 4: Imposition of penalties on the company and directors.
Penalties were imposed on M/s ANM Electronics Pvt. Ltd. under Section 112(a)(v) of the Customs Act, 1962, along with penalties on the directors of the company under various sections of the Act. The appellants challenged the order, claiming the goods were imported for self-use or re-export to Dubai and arguing that they were not liable for confiscation. However, the Tribunal upheld the impugned Order-in-Original, dismissing the appeals filed by the appellants based on the evidence and contentions presented during the proceedings.

In conclusion, the judgment addressed various issues related to the classification, confiscation, and penalties concerning the importation of goods by M/s ANM Electronics Pvt. Ltd., ultimately upholding the decision of the Original Authority regarding the valuation, confiscation, and penalties imposed under the Customs Act, 1962.