2024 (2) TMI 379 - AT - Customs

Imposition of redemption fine and penalty - export of readymade garments - Overvaluation of goods to claim undue export benefits - inferior quality goods or not - HELD THAT - To ascertain the value of goods, the Revenue has done market survey in the presence of the representative of the appellant and in the market survey, it was found that the export goods are over valued and the appellant has accepted the same. The learned authorized representative of the Revenue not agreed upon that transportation charges and profit margin cannot be the double of the goods in the facts and circumstances of the case. In that circumstances, it is held that the Adjudicating Authority has rightly held the goods are liable for confiscation. Accordingly, redemption fine and penalty are imposable on the appellant. The redemption fine and penalty are on higher side, accordingly, the redemption fine reduced to Rs. 2,00,000/- and penalty to Rs. 1,00,000/- - appeal allowed in part.

Summary

Issues involved:
Appeal against setting aside of imposition of redemption fine and penalty.

Summary:

Issue 1: Imposition of redemption fine and penalty
The appellant, an exporter of readymade garments, filed shipping bills and export documents with the department. Allegations were made that the goods were of inferior quality and overvalued to claim undue export benefits. After examination and a market survey, it was found that the goods were heavily overvalued. The adjudicating Authority allowed the goods to be taken back but held the overvalued goods liable for confiscation, imposing a redemption fine of Rs. 4,00,000/- and a penalty of Rs. 1,50,000/- on the appellant. The appellant challenged this imposition.

Issue 2: Arguments of the parties
The appellant's counsel argued that the supplier of goods had issued genuine invoices showing tax paid, indicating that the goods were not overvalued. It was contended that no benefits were taken on the goods as they were taken back to town and no export occurred. The department's representative, however, maintained that the goods were significantly overvalued based on the market survey.

Issue 3: Decision
After hearing both parties and examining the records, it was found that the export goods were indeed overvalued as per the market survey. The transportation charges and profit margin were deemed excessive, justifying the confiscation of the goods. Consequently, the imposition of redemption fine and penalty was upheld, albeit with a reduction to Rs. 2,00,000/- and Rs. 1,00,000/- respectively, considering that the original amounts were on the higher side. The appeal was disposed of accordingly.