2019 (1) TMI 1510 - AT - Customs

Valuation of imported goods - Processed Betel Nuts - N/N. 12(RE-2013)/2009-14 dated 13.05.2013 - whether the betel nuts are liable for confiscation by declaring value which were lesser than the price fixed by the DGFT in the Notification - Held that - The issue is no more res-integra in view of the decision of the Hyderabad Bench of this Tribunal in the case of International Seaport Dredging Ltd. vs. C.C. & S.T., Visakhapatnam 2016 (11) TMI 176 - CESTAT HYDERABAD . The Tribunal has taken the view that as the goods were cleared after collecting duty on the basis of tariff rate, it cannot be held that the goods are prohibited - In the present case also, it is the Revenue s contention that the goods being of lesser value, required a licence and thus has to be considered as prohibited. However, the decision of the Tribunal in the case of International Seaport Dredging Ltd. vs. C.C. & S.T., Visakhapatnam is squarely applicable to the facts of the present case. There are no justifiable reasons to confiscate the betel nuts in question. Penalty u/s 112(a) of FA - Held that - Penalty in terms of Section 112(a) of the Customs Act is imposable where a person does anything or omits to do anything rendering the goods liable to confiscation - The imposition of penalty upon the appellant is also not justifiable and the same is accordingly set aside. Redemption fine imposed under Section 125 of the Customs Act, 1962 is set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of imported goods under Section 111(d) of the Customs Act, 1962.
2. Imposition of penalty under Section 112 of the Customs Act, 1962.
3. Applicability of DGFT Notification No.12(RE-2013)/2009-14 on imported betel nuts.

Confiscation of Imported Goods:
The case involved the import of Processed Betel Nuts from Bangladesh to India under six Bills of Entry with a declared invoice value below the minimum import price fixed by DGFT Notification No.12(RE-2013)/2009-14. The authorities provisionally cleared the goods but confiscated them under Section 111(d) of the Customs Act, 1962, with an option for redemption on payment of a fine. The appellant challenged the confiscation, arguing that it was not valid in law. The Tribunal referred to a previous decision and held that since duty was paid based on tariff rates, the goods could not be considered prohibited. The Tribunal set aside the confiscation, redemption fine, and penalty imposed under Section 112 of the Customs Act, 1962.

Imposition of Penalty:
The appellant contended that since the goods were not liable for confiscation, the penalty under Section 112(a) of the Customs Act should not apply. The Tribunal agreed, stating that the penalty is imposed when goods are liable for confiscation. As the goods were found not confiscable, the imposition of the penalty was deemed unjustifiable and was set aside along with the redemption fine under Section 125 of the Customs Act, 1962.

Applicability of DGFT Notification:
The dispute centered around whether the imported betel nuts were liable for confiscation due to their value being below the price fixed by the DGFT Notification. The Revenue argued that the goods, being of lesser value, required a license and should be considered prohibited. However, the Tribunal, citing a previous case, held that the goods were not liable for confiscation under Section 111(d) of the Customs Act, as there was no prohibition against their importation. The Tribunal found no justifiable reasons to confiscate the betel nuts and set aside the impugned order, allowing the appeal filed by the appellant.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal filed by the appellant and providing consequential relief. The decision emphasized that the goods were not liable for confiscation under Section 111(d) of the Customs Act, 1962, and therefore, the penalty and redemption fine were also deemed unjustifiable and set aside.