9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (11) TMI 590 - AT - CustomsSmuggling - Smart Watches - Foreign origin goods - applicability of Section 123 of the Customs Act, 1962 - burden to prove - Confiscation of 5543 smart watches - levy of Redemption fine and penalty - HELD THAT - Admittedly the items under seizure are having a watch module which is for displaying the time. In our view the essential character of the item under consideration is that of a watch and is bought and sold as a watch in the trade. Just because certain other functions are inscribed in the said device it will not essentially go beyond the meaning of word watch as used in section 123 - the burden to establish that the seized smart watches are covered by the expression watch used in the Section 123 of the Customs Act, 1962. Whether Appellants have discharged the necessary burden to establish that these smart watches have been licitly imported into India? - HELD THAT - To establish the licit import appellants produced a Bill of Entry No.3140294 dated 7.09.2017, filed at Chennai for import of 20,000 smart watches, and have claimed that the smart watches under seizure are part of this consignment. However when asked to establish the correlation between the goods imported under said bill of entry and the seized goods, appellant failed to establish the same. Appellants have not shown at any time that these statements had been retracted by him at any time. The letter of Advocate to which the Appellant Counsel have referred is dated much before these two statements and cannot be said to be a retraction of the statements made subsequently. In absence of any retraction we find these statements as reliable pieces of evidence wherein the appellants have themselves been asked to establish correlation between the Bill of Entry produced by them and the goods seized have failed to establish any such correlation and have admitted that such correlation cannot be established - In the absence of any evidence to show that these smart watches have been licitly imported into India, and in view of the Section 123 of Customs Act, 1962, these 5543 smart watches have been illicitly imported and are liable for confiscation under Section 111 of the Customs Act, 1962 as has been held by the Commissioner. Appellants have contended that the assessable value determined by the Commissioner in the present order is not correct, as it is based on the value determined on the basis of internet price of the seized/ confiscated watches. He also states that these watches have been cleared by the Chennai Customs at much lower assessable as is evident from the Bill of Entry No 3140294 dated 07.09.2017. We are not in agreement with the arguments advanced by the Appellant Counsel, for the reason that it has been categorically admitted by the appellant in his statements referred above that there exists no correlation between the smart watches imported under the said bill of entry and those seized and confiscated. Further Appellant has not been able to produce any document in respect of legal acquisition of these smart watches. Order confiscating the 5543 smart watches is upheld. However the redemption fine of ₹ 45 Lakhs imposed is reduced to ₹ 25 Lakhs - Custom Duty amounting to ₹ 9,78,715/- shall be paid by any person coming forward to claim these 5543 confiscated smart watches, in terms of Section 125 (2) of Customs Act, 1962 - Penalty imposed under Section 114A is set aside - Penalty of ₹ 1 Crore imposed under Section 114AA is reduced to ₹ 11 Lakhs. Appeal allowed in part.
Issues Involved:
1. Confiscation of 5543 smart watches. 2. Redemption fine imposed on the smart watches. 3. Valuation of the seized smart watches. 4. Duty demand in respect of the smart watches. 5. Penalty imposed on the appellant in relation to the smart watches. Issue-wise Detailed Analysis: 1. Confiscation of 5543 Smart Watches: The Commissioner of Customs (Preventive), Mumbai, held that 5543 smart watches were smuggled goods under Sections 2(39) and 2(33) of the Customs Act, 1962, and were liable for confiscation under Section 111(d), (f), (h), (i), (j), and (m) of the Customs Act, 1962, read with Rule 3 of the Information Technology Goods (Requirements for Compulsory Registration) Order, 2012. The appellant challenged this confiscation, arguing that smart watches are not covered under Section 123 of the Customs Act, which places the burden of proof on the department. However, the Tribunal found that smart watches, being watches, are indeed covered under Section 123, and the appellant failed to establish that the seized smart watches were licitly imported. 2. Redemption Fine Imposed on the Smart Watches: The Commissioner imposed a redemption fine of ?45 lakhs on the seized 5543 smart watches. The Tribunal observed that the total cost to redeem the watches (?78,04,558) was much higher than their present market value (?58,14,607). Consequently, the Tribunal reduced the redemption fine to ?25 lakhs, ensuring it was not prohibitive. 3. Valuation of the Seized Smart Watches: The appellant contested the valuation determined by the Commissioner, arguing that the assessable value based on internet prices was exaggerated. The Tribunal upheld the Commissioner's valuation method, noting that the market value and assessable value determined were reasonable given the lack of any other data and the varying prices of similar smart watches on e-commerce platforms. 4. Duty Demand in Respect of the Smart Watches: The Commissioner determined the duty payable on the 5543 smart watches as ?9,78,715 and imposed a penalty equivalent to the duty and interest under Section 114A of the Customs Act, 1962. The Tribunal found this approach erroneous, stating that the duty in respect of confiscated goods becomes payable under Section 125(2) of the Customs Act, 1962, upon redemption, and not under Section 28. The Tribunal set aside the penalty imposed under Section 114A. 5. Penalty Imposed on the Appellant in Relation to the Smart Watches: The Commissioner imposed a penalty of ?1 crore on the appellant under Section 114AA of the Customs Act, 1962, for misstatements and misdeclarations. The Tribunal reduced this penalty to ?11 lakhs, reasoning that the penalty should be proportionate to the market value of the goods the appellant transacted in and produced documents for, which was ?58,14,607, and not the total value of all seized goods. Conclusion: The Tribunal upheld the confiscation of the 5543 smart watches but reduced the redemption fine to ?25 lakhs. The duty payable of ?9,78,715 was confirmed, but the penalty under Section 114A was set aside. The penalty under Section 114AA was reduced to ?11 lakhs. This order was limited to the appeal concerning the 5543 smart watches and did not affect other goods or persons mentioned in the impugned order.
|
