2019 (3) TMI 127 - AT - Customs

Confiscation of containers - empty containers were retained by the appellant and not returned back to the supplier - case of the department is that since the containers were not returned back and retained by the appellant, its value should have been declared to the Customs in the bills of entry but the same was suppressed - Held that - The shipping bill and invoice clearly bear the description of the goods duly packed in the container - From the description given in the above invoice, it can be seen that the fact regarding import of plate mill duly packed in container were correctly declared by the overseas supplier in the documents. From the certificate given by the supplier also, it is clear that the supply of Hi Reversing Plate Mill complete in all respect are duly packed in the containers and the value of the machine is inclusive of cost of containers. In this position, there is no basis to allege that either the appellant has not declared or mis-declared the description of the goods or suppressed the value of the containers. The ratio of Hon ble Supreme Court. Judgment in the case of Union of India vs. Jain Shudh Vanaspati 1991 (11) TMI 78 - SUPREME COURT OF INDIA wherein it was held that Edible Oil imported in stainless steel containers, separate duty not leviable on such containers and such containers are not liable to confiscation. As per the facts, which are undisputed, the entire deal between the supplier and the appellant was to import the machine under EPCG scheme duly packed in the container. Therefore, it is not a case of mis-declaration or suppression of any value - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Import of second-hand machinery under EPCG scheme, retention of empty containers, confiscation of containers, mis-declaration, suppression of value, redemption fine, penalty.

Analysis:
The appellant imported second-hand machinery with accessories under the EPCG scheme, fulfilling the export obligation but retaining the empty containers. The department alleged suppression of the container value, leading to confiscation, a ?12 lakh redemption fine, and a ?4 lakh penalty. The appellant contended that the containers were correctly declared in the invoice, import documents, and supplier's certificate, showing no mis-declaration. The appellant argued that the goods were imported packed in containers as per the sale contract and shipping line invoices. The Adjudicating Authority's decision was based on the appellant's failure to declare the containers in the bill of entry.

Upon review, the tribunal found that all import documents clearly stated the goods were packed in containers, with the supplier's certificate confirming the container cost was included in the machine value. Citing a Supreme Court judgment, the tribunal held that containers are not separately dutiable when goods are imported in them. The tribunal concluded that there was no mis-declaration or suppression of container value, as the entire deal was to import the machinery packed in containers under the EPCG scheme. Consequently, the impugned order was set aside, and the appeal was allowed.