2022 (4) TMI 1371 - AT - Customs

Rejection of classification - rejection of valuation declared in the bills of entry - 39 bales containing 64,350 pcs. of mixed ready-made garments of different varieties/ qualities/ size - Section 14 of the Customs Act read with the Valuation Rules - HELD THAT - It is found that admittedly in the re-examination of the goods done, the same have been found to be used and worn clothing. Accordingly, it is held that the Court below have erred in rejecting the classification and valuation as declared in the Bill of Entry. Further, as the appellant has relinquished their title and claim on the imported goods in writing by letter dated 08.05.2008, the whole proceedings against them is vitiated and uncalled for. The impugned order so far this appellant is concerned, is set aside - appeal allowed - decided in favor of appellant.

Issues:
1. Classification and valuation of imported goods
2. Allegation of mis-declaration
3. Confiscation of goods and imposition of penalty
4. Relinquishment of goods by the appellant
5. Re-examination of goods and findings

Classification and Valuation of Imported Goods:
The appellant filed a Bill of Entry declaring goods as "Worn Clothing & Other worn Articles" with a declared value of ?2,50,000. However, upon examination, it was found that the container contained mixed ready-made garments valued at ?32,17,500. The Commissioner observed that the goods were used and worn clothing, falling under CTH 6039 as per the declaration, and the alleged mis-declaration was unfounded. The Commissioner noted that the quantity found during re-examination was within tolerance limits due to the deterioration of cloth weight over time.

Allegation of Mis-declaration:
The appellant contended that the re-examination revealed the goods as worn clothing, contrary to the Revenue's revaluation as new garments. The appellant argued that the impugned order was a repetition of the earlier order-in-original and lacked proper application of mind. Citing a Tribunal ruling, the appellant asserted that once goods are deemed old and used, their value cannot be enhanced. The appellant highlighted the absence of findings on malpractice and the early relinquishment of goods as permissible under the law.

Confiscation of Goods and Imposition of Penalty:
The Commissioner confiscated the imported goods valued at ?32,17,500 and imposed a penalty of ?10,00,000 under Sections 111(d) and 111(m) of the Customs Act. The appellant challenged the revaluation and reclassification of goods, arguing that the impugned order did not address malpractice or provide reasons for rejecting the transaction value. The appellant sought the setting aside of the impugned order and relief from penalties.

Relinquishment of Goods by the Appellant:
The appellant had relinquished their title and claim on the imported goods in writing on 08.05.2008. The Tribunal found that this action by the appellant invalidated the proceedings against them, rendering them unnecessary and unjustified. Consequently, the Tribunal set aside the impugned order concerning the appellant and granted them consequential benefits as per the law.

Re-examination of Goods and Findings:
Upon re-examination, it was confirmed that the goods were used and worn clothing, contradicting the Revenue's revaluation as new garments. The Tribunal concluded that the lower court erred in rejecting the classification and valuation declared in the Bill of Entry. As the appellant had relinquished their claim on the goods, the Tribunal deemed the proceedings against them as flawed and unwarranted, leading to the setting aside of the impugned order and granting of consequential benefits.

This detailed analysis covers the issues of classification and valuation of goods, mis-declaration allegations, confiscation of goods, relinquishment by the appellant, and the re-examination findings, providing a comprehensive overview of the legal judgment.

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