2023 (8) TMI 1163 - AT - Customs

Confiscation - Quantum of levy of redemption fine and penalty - Valuation of imported goods - old and used worn clothing, completely fumigated - enhancement of value - HELD THAT - This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI 2018 (11) TMI 625 - CESTAT MUMBAI , wherein this Tribunal has observed The failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. Thus, the redemption fine and penalty imposed on the respondents by the adjudicating authority is sufficient to meet the end of justice. Therefore, the redemption fine and penalty confirmed by the adjudicating authority are upheld - appeal filed by the Revenue is dismissed.

Summary

Issues involved:
The issues involved in the judgment are the enhancement of redemption fine and penalty imposed on imported old and used worn clothing, the classification of goods under Tariff Item No.63090000, the applicability of Section 111(m) and Section 111(d) of the Customs Act, 1962, and the compliance with licensing requirements under the Foreign Trade Policy.

Enhancement of Redemption Fine and Penalty:
The appellant Revenue appealed against the impugned order which enhanced the declared value of imported old and used worn clothing, leading to the imposition of redemption fine and penalty. The Adjudicating Authority had imposed redemption fine and penalty at specific rates, and the Revenue sought enhancement of these amounts. However, after hearing the parties and examining the records, the Tribunal found that the redemption fine and penalty imposed by the adjudicating authority were sufficient to meet the ends of justice. Citing a previous decision, the Tribunal upheld the redemption fine and penalty confirmed by the adjudicating authority, ultimately dismissing the appeal filed by the Revenue.

Classification of Goods and Licensing Requirements:
The imported old and used worn clothing articles were classified under Tariff Item No.63090000 of the First Schedule of the Act, which is a restricted item for import as per the Foreign Trade Policy 2009-2014. Import of goods under this tariff item is allowed only against a valid specific license. The Adjudicating Authority invoked Section 111(d) of the Customs Act, 1962 for confiscation of goods due to the import of 'old and serviceable garments' without the required import license as per the Foreign Trade Policy. The Tribunal upheld the confiscation under Section 111(d) and reduced the redemption fine to 10% of the ascertained value and penalty to 5%, considering the failure to comply with licensing requirements.

Applicability of Section 111(m) of Customs Act, 1962:
The Tribunal discussed the applicability of Section 111(m) of the Customs Act, 1962, which pertains to goods not corresponding in value or particulars with the entry or declaration made. It was noted that confiscation under Section 111(d) was justified for import of goods without the required import license. The Tribunal emphasized the importance of complying with licensing requirements and upheld the confiscation under Section 111(d) while reducing the redemption fine and penalty to ensure justice was served.