2019 (7) TMI 1470 - AT - Customs

Valuation of imported goods - used digital copier cum printers - rejection of declared value - whether the department was correct in re-assessing the value of the imported photo copiers? - quantum of redemption fine - quantum of penalty. HELD THAT - This engineer had confirmed the value of the goods based on the market value of similar goods and taking into account the value of the cartridges after excluding the damaged cartridges. Therefore, the department was correct in reckoning this value for calculating the customs duty payable. Opportunity to cross-examine the Chartered Engineer - HELD THAT - This report was not collected behind the back of the appellant but the assessment itself was done in the presence of the appellant. We, therefore, find no force in this argument. Therefore, on the questions of value and assessment of duty, we find in favour of the department. Redemption fine and penalty - HELD THAT - There is no hard and fast rule regarding imposition of redemption fine under Section 125 as long as it does not exceed the market value of the goods. In the present case, the value of the goods is around ₹ 5 lakhs and the redemption find imposed is about ₹ 70,000/-. The appellant has made out a case to get the redemption fine reduced to some extent. Correspondingly, the penalty imposed upon the appellant may also be reduced to some extent - quantum of redemption fine and penalty reduced. Appeal allowed in part.

Summary

Issues:
1. Re-assessment of the value of imported photo copiers
2. Excessive redemption fine imposed
3. Excessive penalty imposed

Re-assessment of Value of Imported Photo Copiers:
The appellant imported 53 used digital copier cum printers without the required license, violating the Foreign Trade Policy. The department doubted the declared value and re-assessed the goods at a higher value of &8377; 4,93,810 after considering depreciation and the value of cartridges. The Chartered Engineer hired by the department valued the goods based on market value of similar machines, resulting in the assessed value. The Tribunal found the department's valuation appropriate for calculating customs duty, as it was based on market value and included relevant factors. The appellant's argument of lack of opportunity to cross-examine the Engineer was dismissed as the assessment was done in their presence, supporting the department's valuation and duty assessment.

Excessive Redemption Fine Imposed:
The adjudicating authority imposed a redemption fine of &8377; 70,000, which the appellant deemed excessive. The Tribunal noted that while Section 125 allows redemption of confiscated goods on payment not exceeding market value, there is no fixed percentage. Considering the market value of around &8377; 5 lakhs, the fine was reduced to &8377; 50,000, acknowledging the appellant's plea for reduction due to the circumstances. The modification was made to align the fine with the market value of the goods.

Excessive Penalty Imposed:
The penalty of &8377; 35,000 under Section 112 was considered excessive by the appellant. The Tribunal recognized the appellant's repeated violations of the Foreign Trade Policy and misdeclaration of goods' value. However, in light of the reduced redemption fine and to maintain proportionality, the penalty was reduced to &8377; 25,000. This adjustment aimed to balance the penalty with the revised redemption fine and the overall circumstances of the case. The impugned order was partly allowed, modifying the redemption fine and penalty, providing consequential benefits to the appellant.