2004 (9) TMI 169 - AT - Customs

Summary

Issues:
1. Import of goods below the prescribed floor price.
2. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
3. Consideration of exchange rate fluctuation in import valuation.
4. Imposition of redemption fine and penalty.

Analysis:
1. The case involved the import of consignment of second/defective CR sheets below the prescribed floor price as per the Exim Policy 1997-2002. The Commissioner found the imports unauthorized due to the CIF value of the goods being below the floor price, necessitating a specific import license. The goods were liable to confiscation under Section 111(d) of the Customs Act, 1962. The importer was given the option to redeem the goods on payment of a fine of Rs. 95,000 without any penalty imposed.

2. The appellant contended that the shortfall in the floor price due to exchange rate fluctuation should have been condoned, citing the established practice of accepting exchange rate fluctuations and licenses by the authorities at the Custom House. The Commissioner's refusal to condone the shortfall solely based on exchange fluctuation was questioned, especially when the importer's bona fides were acknowledged, and the contract met the floor price criteria in USD Currency.

3. Considering the exchange rate fluctuation and the genuine nature of the shortfall, the Tribunal set aside the confiscation under Section 111(d) and the fine of Rs. 95,000. The shortfall of US $ 8 per MT in the floor price was condoned, emphasizing that the importer's bona fides were not in doubt, and the exchange rate fluctuation played a significant role in the valuation discrepancy.

4. The Tribunal acknowledged the expenses incurred by the appellant during the proceedings and set aside the redemption fine of Rs. 95,000, taking into account the genuine nature of the shortfall and the impact of exchange rate fluctuations on the import valuation. The appeal was allowed accordingly, providing relief to the importer in light of the exchange rate fluctuation issue and the genuine intentions displayed throughout the transaction.