2004 (10) TMI 135 - AT - Customs

Re-export - exporters of ready-made garments - Misdeclaration and confiscation - Redemption fine and penalty - HELD THAT - The plea of the Revenue that even if re-export is allowed, the importer has to pay duty, in addition to redemption fine and penalty, cannot be countenanced, because once duty is paid on the goods, it would tantamount to clearance of the goods for home consumption in terms of Section 47 of the Act and once it is cleared for home consumption, the goods get merged with the mass of the goods in the country. Re-export is permitted in a situation where the importer does not want to clear the goods for home consumption for various reasons and when the goods are permitted to be re-exported, the question of clearance of the goods for home consumption on payment of duty does not arise. Therefore, we are of the considered opinion that duty can be demanded only when the goods are cleared for home consumption and not when they are permitted to be re-exported on payment of fine and penalty. Before parting with this case, we would also like to observe that, if an importer were to pay duty also (in addition to fine and penalty), on the goods permitted, to be re-exported, he need not undergo the various complex and time consuming formalities of re-export again and he is free to dispose of the goods in the domestic market itself, once duty and other charges have been paid on it. Thus, we allow re-export of the excess quantity of goods on payment of redemption fine of Rs. 1,00,000/- (Rupees One lakh) and impose a penalty of Rs. 25,000/- (Rupees Twenty-five thousand) which would meet the ends of justice and we order accordingly. The appeal is thus disposed of in the above terms. The appellants are entitled to consequential relief, if any

Summary

Issues Involved:
1. Rejection of invoice value and enhancement of value.
2. Confiscation of goods and imposition of fine.
3. Demand for duty u/s 28 of the Customs Act, 1962.
4. Imposition of penalty u/s 112(a) of the Customs Act, 1962.
5. Request for re-export of goods.

Summary:

1. Rejection of Invoice Value and Enhancement of Value:
The Commissioner of Customs (Imports) Chennai, rejected the declared invoice value of Rs. 8,18,063/- and enhanced it to Rs. 22,83,215/-.

2. Confiscation of Goods and Imposition of Fine:
The Commissioner ordered the confiscation of the goods with an option to redeem them on payment of a fine of Rs. 5,75,000/- in terms of Section 125(1) of the Customs Act.

3. Demand for Duty u/s 28 of the Customs Act, 1962:
The Commissioner demanded a duty of Rs. 52,18,709/- under Section 28 of the Customs Act, 1962.

4. Imposition of Penalty u/s 112(a) of the Customs Act, 1962:
A penalty of Rs. 2,00,000/- was imposed under Section 112(a) of the Customs Act, 1962.

5. Request for Re-export of Goods:
The appellants argued for the re-export of goods, citing various precedents where re-export was permitted. The Commissioner rejected this request, stating that goods liable for confiscation cannot be re-exported. However, the Tribunal noted several cases where re-export was allowed on payment of redemption fine and without duty. The Tribunal held that the appellants are entitled to re-export the goods on payment of a reduced redemption fine of Rs. 1,00,000/- and a penalty of Rs. 25,000/-, without the need to pay the duty.

The Tribunal distinguished the facts of the present case from those in the cited cases by the Commissioner and concluded that the appellants had established their bona fide by promptly addressing the excess shipment issue with the supplier, who agreed to take back the goods. Therefore, the Tribunal allowed the re-export of the goods on payment of the specified fine and penalty, rejecting the Revenue's plea for duty payment on re-exported goods.