2003 (11) TMI 222 - AT - Customs

Confiscation of goods - valuation - calculation of margin of profit - Redemption fine and penalty - HELD THAT - On a careful consideration of the submissions, we notice that appellant has filed an affidavit to show that the margin of profit has come down to Rs. 63,715/-. It is also stated that department has worked out the margin of profit on the basis of value declared and not on the basis of enhanced value and it is stated that the correct procedure is to work out the market value on the basis of enhanced value in the matter. There is force in this submission. Once the value has been enhanced, then the profit margin has to be worked out only on the basis of enhanced value. The department has erred in proceeding on the basis of declared value to arrive at the high profit in the matter. This contention of appellant requires to be accepted. In that view of the matter, the case is remitted to the authorities to work out the margin of profit in terms of the formula laid down in the case of Shankar Trading Co. v. CC, Trichy 1998 (7) TMI 253 - CEGAT, MADRAS . If the margin of profit is wiped out as contended, then the question of imposing redemption fine may not arise in the matter. The penalty may be fixed commensurate to the offence taking into consideration the extenuating circumstances in the matter. On the appellant's plea that the enhanced value is required to be accepted, the matter is remanded to the original authority for de novo consideration. As the goods are still in custody, the matter may be adjudicated within one month from the receipt of this order. Thus, the appeal is allowed by way of remand. Ordered accordingly.

Summary

Issues involved: Appeal against order of confiscation of goods, imposition of fine and penalty, calculation of margin of profit, correct valuation of imported goods.

Confiscation of Goods and Imposition of Fine and Penalty:
The appeal challenged the order of confiscation of goods and imposition of fine and penalty by the Commissioner of Customs. The appellants imported Ceramic Tiles valued at US $ 3.6 per sq. mtr., but the Commissioner enhanced the value to US $ 10 per sq. mtr. and ordered levy of anti-dumping duty. The appellants contested the fine and penalty, citing demurrage costs and decreased profit margins due to various charges incurred. The Tribunal noted discrepancies in the calculation of profit margin based on declared value versus enhanced value. It directed a reevaluation of the margin of profit and remanded the case for consideration of redemption fine and penalty based on correct valuation.

Calculation of Margin of Profit:
The appellant argued that the margin of profit was significantly reduced due to various charges incurred, leading to minimal profit. They contended that the department erred in calculating the profit margin based on declared value rather than the enhanced value. The Tribunal agreed with this argument, emphasizing that the margin of profit should be determined based on the enhanced value of the goods. It directed the authorities to reevaluate the profit margin using the formula established in a previous case and to consider extenuating circumstances in determining the penalty. The case was remanded for de novo consideration to ensure a fair assessment of the margin of profit and appropriate penalty imposition.

Correct Valuation of Imported Goods:
The department had valued the goods at Rs. 640 per sq. mtr., while the appellant argued for a lower market price based on affidavits submitted. The Tribunal acknowledged the discrepancy in valuation and emphasized the need to calculate the margin of profit based on the enhanced value of the goods. It directed the original authority to reconsider the enhanced value and reevaluate the margin of profit accordingly. The case was remanded for a fresh assessment within one month to ensure a fair and accurate determination of the value of the imported goods.