2004 (12) TMI 131 - AT - Customs

Summary

Issues:
1. Enhancement of assessable value of imported goods
2. Demand of Customs duty and penalty on the Appellant-Company
3. Confiscation of goods due to misdeclaration of assessable value
4. Imposition of penalty under Section 112 of the Customs Act

Enhancement of Assessable Value of Imported Goods:
The Appellants, a company manufacturing electronic watches and clocks, imported parts of watches and electro micro circuits in 1997. The Customs Department in India enhanced the assessable value of the imported goods based on export declarations filed by their supplier with the Hong Kong Customs & Central Excise Department. The Appellants did not challenge the demand of Customs duty confirmed by the Commissioner (Appeals), leading to upholding the demand of Customs duty against them.

Confiscation of Goods due to Misdeclaration of Assessable Value:
The key argument revolved around the misdeclaration of the assessable value of the imported goods. The Appellants contended that since the goods were cleared and never seized by the Department, the question of confiscation and redemption on payment of fine did not arise. They relied on previous decisions to support their stance. However, the Department argued that misdeclaration of assessable value rendered the goods liable to confiscation under Section 111 of the Customs Act. The Tribunal analyzed relevant legal provisions and previous judgments to conclude that the goods, though liable to confiscation, were never available for actual confiscation by the Department. Therefore, the Tribunal set aside the redemption fine imposed on the Appellant-Company.

Imposition of Penalty under Section 112 of the Customs Act:
The Appellants contested the imposition of penalties under Section 112 of the Customs Act. They argued that since the goods were not confiscated, no penalty could be imposed. However, the Tribunal held that the misdeclaration of assessable value rendered the goods liable to confiscation, justifying the imposition of penalties. Citing legal precedents, the Tribunal reduced the penalties imposed on the Appellant-Company based on the facts and circumstances of the case. Notably, the penalties imposed on the Managing Director were set aside due to the absence of specific acts or omissions attributed to him that rendered the goods liable for confiscation.

In conclusion, all the appeals were disposed of with the Tribunal upholding the demand of Customs duty against the Appellant-Company, setting aside the redemption fine, and reducing the penalties imposed based on the misdeclaration of assessable value of the imported goods.