2024 (1) TMI 784 - AT - Customs

Confiscation of imported goods - levy of Redemption Fine and penalty - misclassification of goods - old un-mutilated mixed hosiery - restricted item or not - HELD THAT - It is found that an old un-mutilated mixed hosiery clothing classifiable under Tariff item 63090000 is a restricted item as per Indian Trade Classification (Harmonised System) of Import Items, 2017 (ITC) (HS), 2017 notified by the Central Government under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (as amended from time to time) read with paragraph 2.01 of the Foreign Trade Policy, 2015 2020. As per para 2.08 of the Foreign Trade Policy, restricted items are permitted under an import License/Authorisation/Permission granted by the Director General of Foreign Trade. The appellant has not submitted any such license and therefore the total duty evaded is Rs.3,05,641/-. The present case is squarely covered by the decision in the case of B.K. Spinning Mills (P) Ltd. versus Collector Customs, Cochin, 1999 (8) TMI 359 - CEGAT, NEW DELHI , where the Bills of Entry were assessed to duty by classifying them under Customs Heading 6310.90 as Completely Pre-mutilated Synthetic/Woollen rags which were allowed to be imported without license as per the provisions of the export import policy, however, on examination they were found to contain serviceable, non-mutilated used clothes and also the declared value was not found to be correct transaction value. The Tribunal relying on the decision of the Apex Court in Garg Mills (P)Ltd versus Additional Collector 1998 (9) TMI 86 - SUPREME COURT held that the goods are used and worn clothing, classified under Customs Heading 6309 and confiscation of goods under Section 111(m) of the Act is sustainable. The goods imported were restricted goods and could have been imported on the basis of the Licence issued by the DGFT and being misdeclared in respect of description, weight and value were liable for confiscation and penalty under Section 112(a) of the Act for his act of omissions and commissions. The redemption fine imposed on the appellant of Rs.4,50,000/- is commensurate with the assessable value of the goods of ₹22, 90, 920/ and hence requires no interference. Appeal dismissed.

Summary

Issues Involved:
The issues involved in the judgment are misdeclaration of imported goods, redetermination of assessable value, confiscation of goods, imposition of redemption fine, penalty under the Customs Act, 1962, and violation of import regulations.

Misdeclaration of Imported Goods:
The appellant filed a Bill of Entry for clearance of goods declared as "Old Original Completely Pre-Mutated and Fumigated Mixed Hosiery Rags." However, upon examination, it was found that the goods were misdeclared as they contained old un-mutilated mixed Hosiery clothing instead of pre-mutilated rags. This misdeclaration led to a redetermination of the assessable value and imposition of penalties under the Customs Act.

Redetermination of Assessable Value and Confiscation of Goods:
The authorities redetermined the assessable value of the imported goods due to misdeclaration, leading to the imposition of a redemption fine and penalty on the importer. The goods were found to be misclassified under a restricted item, resulting in confiscation and penalties under the Customs Act.

Imposition of Redemption Fine and Penalty:
The appellant contested the imposition of redemption fine and penalty, claiming they acted in good faith and were unaware of the misdeclaration. However, the authorities upheld the fines and penalties, citing violations of import regulations and misdeclaration of goods as the basis for the penalties imposed under Section 112(a) of the Customs Act.

Violation of Import Regulations:
The appellant failed to submit the required license for importing restricted goods, leading to a violation of import regulations. The authorities found that the goods imported were misdeclared in terms of description, weight, and value, making them liable for confiscation and penalties under the Customs Act. The judgment referenced previous cases and CBEC Circular guidelines to support the decision.

Decision:
The Tribunal affirmed the impugned order, dismissing the appeal and upholding the fines, penalties, and confiscation of goods imposed on the appellant. The judgment highlighted the importance of accurate declaration of goods, compliance with import regulations, and consequences for violations under the Customs Act.