2020 (2) TMI 102 - AT - Customs

Import of prohibited goods - Power of customs officers to relax the conditions - Valuation of imported goods - mis-declaration in terms of quantity, value and description - enhancement of value of goods - HELD THAT - It is an admitted fact on record that the subject goods in the present case were imported, resorting to mis-declaration in terms of quantity, value and also most of the goods were not in conformity with the CDSCO Certificate. This fact is evident from the impugned order - Further, the appellant had not submitted any plausible evidence either before the original authority or the Tribunal, in disproving the correctness of the examination report furnished by the department. On the contrary, it is observed from the submissions recorded from the appellant at paragraph 6 in the impugned order that it had agreed with the fact of mis-declaration of goods and noncompliance of the CDSCO requirement as per the provisions contained in the Drugs and Cosmetic Act, 1940. Thus, we are of the considered view that rejection of the declared value by resorting to the provisions of Rule 12 ibid and re-determination of the same under Rule 9 ibid read with Section 14 ibid is in conformity with the statutory provisions. In case of non-compliance of the prohibitions/restrictions contained in Section 11 ibid, the discretion vested with the adjudicating authority under Section 125 ibid is to be exercised in the prescribed manner; In case if the restriction or regulation relating to import of goods is violated, then no discretion can be exercised by the Commissioner in offering an option for payment of redemption fine in lieu of confiscation of the goods. In the present case, regulations for import of perfumes are provided in the Drug Cosmetics Act, 1940. Since, the appellant did not import the subject goods under the cover of valid CDSCO certificate, the provisions of the said statute have been violated. Thus, the goods are liable for absolute confiscation under the provisions of Section 111(d) ibid. Further, the offending goods were not notified under Section 11 ibid at the material time of import. Thus, the adjudicating authority under the Customs statute was not empowered to relax the conditions provided in the Act, 1940 to offer redemption of goods on payment of fine. Therefore, there are no infirmity in the impugned order, so far it has ordered for absolute confiscation of goods. The impugned order is sustained as far as goods held liable for absolute confiscation - impugned order sustains, so far as it has redetermined the assessable value under Rule 9 ibid read with Section 14 ibid and absolutely confiscated the goods under Section 111(d) ibid - quantum of redemption fine and penalty reduced - appeal allowed in part.

Summary

Issues:
1. Mis-declaration of imported goods
2. Confiscation of goods under Customs Act, 1962
3. Compliance with CDSCO norms
4. Imposition of redemption fine and penalties
5. Request for re-export of goods

Analysis:
1. The case involves mis-declaration of imported goods by M/s Nirvanza Trading Pvt. Ltd., leading to a seizure under Section 110(1) of the Customs Act, 1962. The Customs Department found discrepancies in quantity, value, and noncompliance with CDSCO norms, resulting in undervaluation to evade customs duty.

2. The impugned order dated 19.06.2019 enhanced the declared value of goods and ordered confiscation under Section 111(d) of the Customs Act, 1962. Goods valued at ?1,25,48,722/- were confiscated for attempted import without a valid CDSCO Certificate, violating the Drug & Cosmetics Act, 1940. Redemption of goods valued at ?21,15,317/- was allowed on payment of a fine.

3. The appellant claimed innocence, attributing mis-declaration to the overseas supplier's error due to cross stuffing. However, the department's findings were not contested effectively. The rejection of declared value and re-determination under Customs Valuation Rules was deemed justified due to noncompliance with CDSCO requirements.

4. The imposition of redemption fine and penalties was challenged by the appellant, citing lack of malafides. The Revenue supported the impugned order's findings, emphasizing non-compliance with CDSCO norms and examination report discrepancies.

5. The Tribunal upheld the absolute confiscation of goods imported without a valid CDSCO certificate under Section 111(d) of the Customs Act, 1962. The appellant's request for re-export was not entertained separately, as it was considered distinct from the redemption process.

6. The judgment modified the impugned order by reducing the quantum of redemption fine and penalties imposed on the appellant company and the director. The appeal was disposed of, sustaining confiscation for some goods while allowing redemption for others, based on the statutory provisions and case-specific circumstances.