2003 (12) TMI 195 - AT - Customs

Summary

Issues:
1. Valuation of consignment under Rule 5 of Customs Valuation Rules
2. Confiscation of old and used diesel engines
3. Imposition of redemption fine and penalty

Valuation of Consignment:
The appellants contested the Commissioner's decision to load the value of the consignment by applying Rule 5 of the Customs Valuation Rules, valuing it at Rs. 11,13,816/-. The Tribunal rejected the appeal on this issue as the loading of valuation was not pressed by the learned Advocate.

Confiscation of Diesel Engines:
The Commissioner had ordered the confiscation of old and used diesel engines, deeming them not to be capital goods, allowing redemption on a fine of Rs. 12 lakhs, and imposing a penalty of Rs. 1,75,000/- on goods valued at Rs. 11,13,816/-. The Tribunal analyzed the issue and found that the goods, even when old and used, were considered capital goods machinery by the Tribunal. As per norms, the redemption fine should not exceed 50%, leading to a reduction of the fine to 45% of the c.i.f. value.

Redemption Fine and Penalty:
Regarding the redemption fine, the Tribunal referred to the Customs Appraising Manual and highlighted that the redemption fine should not exceed the market price of the goods confiscated less the duty chargeable thereon. The Tribunal emphasized that special reasons must exist to exceed the prescribed norms for redemption fines. The Exim Policy 1997-2002 classified second-hand goods as 'Restricted' and not 'prohibited/banned', allowing import without a license for eligible importers. The Tribunal reduced the redemption fine to 45% of the c.i.f. value and imposed a penalty at 5% of the same value, considering the nature of the goods and their classification as capital goods machinery.

In conclusion, the appeal was disposed of with a reduction in the redemption fine and imposition of a penalty at 5% of the c.i.f. value. The Tribunal emphasized the importance of adhering to prescribed norms for redemption fines and the classification of goods under relevant policies and regulations.