2004 (7) TMI 245 - AT - Customs

Summary

Issues Involved:
1. Seizure and jurisdiction of Air Intelligence Unit.
2. Misdeclaration and undervaluation of imported goods.
3. Valuation of imported glass stones and watch movements.
4. Confiscation and penalties under the Customs Act.

Detailed Analysis:

1. Seizure and Jurisdiction of Air Intelligence Unit:
The Air Intelligence Unit intercepted 41 packages, of which 27 were investigated. These packages were consigned to four firms managed by an individual. The goods were seized for being misdeclared or not declared. However, the Tribunal found that the interception and seizure were premature and without jurisdiction. The proper procedure under the "Rules Regarding Postal Parcels & letter packets from Foreign Posts in/out of India" was not followed. The Tribunal cited the case of CC, Mumbai v. Triveni Industries, emphasizing that the proper customs officer should have handled the parcels as per the established rules. Consequently, the seizure by the Air Intelligence Unit was deemed premature and without jurisdiction, leading to the setting aside of the impugned order.

2. Misdeclaration and Undervaluation of Imported Goods:
The goods were alleged to be misdeclared in terms of value, quantity, and country of origin. The Tribunal found that the Commissioner's findings on misdeclaration and undervaluation were not supported by substantial evidence. The Tribunal noted that the goods were declared as "imitation glass stones" with a value of HK $250 per consignment, and the weight varied between 12.9 kg to 20.1 kg. The Tribunal did not accept the Commissioner's reliance on extraneous material to reject the claim of stock lot and found no basis to reject the transaction value. The Tribunal emphasized that the absence of a declaration on parcels or different claims regarding value could not be a reason to reject the transaction value, especially when invoices were produced subsequently.

3. Valuation of Imported Glass Stones and Watch Movements:
The Commissioner re-valued the glass stones and watch movements, rejecting the declared values. For glass stones, the Tribunal found that the goods were not proved to be of European origin or OKTENT make, and the valuation based on such assumptions was not justified. The Tribunal held that the goods should be valued as per the declared transaction value. For watch movements, the Tribunal found that the parts were from Japan but assembled in China. The valuation done by the department as if they were of Japanese origin was without basis. The Tribunal accepted the declared value of US $0.20 per piece and directed reassessment and release of the goods on payment of appropriate duty.

4. Confiscation and Penalties under the Customs Act:
The Tribunal found no reason to uphold the confiscation under Section 111(d) and (m) of the Customs Act, 1962, as the goods were not liable for confiscation due to the premature seizure and lack of evidence for misdeclaration and undervaluation. Consequently, the penalties imposed under Section 112 of the Customs Act were also set aside. The Tribunal ordered the parcels to be cleared on payment of appropriate duty on the declared values.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeals. The parcels were ordered to be cleared on payment of appropriate duty on the declared values, and the penalties imposed were set aside. The Tribunal emphasized the importance of following the proper procedure and the lack of substantial evidence for misdeclaration and undervaluation.