2019 (9) TMI 28 - AT - Customs

Import of restricted item - old and used photocopiers - appellant did not posses any valid license and further there was a suspicion that the goods were under-invoiced - HELD HAT - When the goods were imported, the value of imported goods were doubted by the Customs authorities and in the presence of the representative of the importer as well as a Chartered Engineer the goods were opened and examined. The value was assessed with the help of the Chartered Engineer. The value so assessed was accepted by the appellant vide their letter dated 16-4-2008 and based on such acceptance the assessment was completed - there is no force in the argument of the appellant that a market enquiry should have been conducted and they should have been provided a copy of such market enquiry when they have not disputed the value of the goods at the time of assessment. Confiscation of goods - quantum of redemption fine - HELD THAT - The goods were undisputedly imported in violation of Para 2.17 of FTP without a license. Therefore, the goods were liable for confiscation under Section 111 and have been rightly confiscated so. The redemption fine imposed is ₹ 6,50,000/- on a total estimated value of ₹ 18,50,272/-. It works out to about 33% of the estimated market value. In cases of confiscation, usually, the value of 10% is adopted - Accordingly, the appellant has a case for reduction of redemption fine to ₹ 2,00,000/-. Quantum of penalty - HELD THAT - The penalty of ₹ 1,00,000/- imposed under Section 112(a) works out to about 5% of the value of the goods - penalty upheld. Appeal allowed in part.

Summary

Issues:
Import of restricted goods without a valid license, under-valuation of goods, confiscation of goods, imposition of redemption fine, imposition of penalty, principles of natural justice violation.

Analysis:

1. Import of Restricted Goods without a Valid License:
The appellant imported old and used photocopiers without possessing a valid license as required under Para 2.17 of Foreign Trade Policy (FTP), 2004-2009. Customs officers examined the goods and enhanced their value to ?18,50,272. The goods were confiscated under Section 111(d) and 111(m) of the Customs Act for violation of FTP. The appellant was given an opportunity to redeem the goods on payment of a redemption fine of ?6,50,000.

2. Under-Valuation of Goods:
The appellant disputed the value arrived at by the department based on the Chartered Engineer's certificate. However, the appellant had accepted the value at the time of clearance. The appellant argued that the department did not provide details of market enquiries or a worksheet order regarding the calculation of the imported goods' value. The tribunal found no merit in the appellant's argument, as they had accepted the assessed value and did not dispute it during assessment.

3. Confiscation of Goods and Imposition of Redemption Fine:
The tribunal upheld the confiscation of goods as they were imported without a valid license, in violation of FTP. The redemption fine of ?6,50,000 was considered excessive, amounting to about 33% of the estimated market value. The tribunal reduced the redemption fine to ?2,00,000, which was deemed more appropriate in line with past practices. The penalty of ?1,00,000 imposed under Section 112(a) was upheld, as it constituted about 5% of the value of the goods.

4. Principles of Natural Justice Violation:
The appellant alleged a violation of natural justice, stating that they were not provided with details of market enquiries and were not given an opportunity to challenge the assessment. However, the tribunal noted that the appellant had accepted the assessed value and did not dispute it during assessment, thereby finding no merit in the argument of natural justice violation.

5. Conclusion:
The tribunal partly allowed the appeal by reducing the redemption fine from ?6,50,000 to ?2,00,000 but upheld the confiscation of goods and the penalty imposed. The appeal was disposed of accordingly, with the decision pronounced in open court.