2005 (9) TMI 189 - AT - Customs

Summary

Issues:
1. Assessment of duty based on declared value vs. enhanced value of imported goods.
2. Confiscation and redemption fine imposed on misdeclared goods.
3. Challenge of penalty under Section 114A of the Customs Act.

Analysis:

Issue 1: Assessment of duty based on declared vs. enhanced value
The appellants initially declared the value of the imported goods at US $3425 C&F, leading to an assessment of duty at Rs. 93,099. Subsequent investigations revealed a higher value of US $7000.50, resulting in an enhanced value. The Commissioner of Customs determined the assessable value under Rule 8 of the Customs Valuation Rules, 1988, leading to a differential duty demand of Rs. 1,33,726. The appellants accepted this enhancement and paid an amount towards the demands without contesting the same.

Issue 2: Confiscation and redemption fine on misdeclared goods
The Commissioner found misdeclaration of goods by the importer and confiscated 10 cameras with a redemption fine of Rs. 27,000. Additionally, a redemption fine of Rs. 3,30,000 was imposed in lieu of confiscation of the remaining cameras that were not available for confiscation. The appellants contested the fine of Rs. 3.30 lakhs imposed on them for the unavailable cameras. The Tribunal accepted the contention that where goods are not available for confiscation, they are not redeemable, and thus set aside the fine of Rs. 3.30 lakhs.

Issue 3: Challenge of penalty under Section 114A of the Customs Act
The Commissioner imposed a penalty of Rs. 1,33,726 on the importer under Section 114A of the Customs Act. The appellants challenged this penalty in the appeal, arguing that in the circumstances of the case, a penalty equal to duty was not warranted. After hearing submissions from both parties, the Tribunal found the penalty to be harsh and reduced it to Rs. 25,000.

In conclusion, the impugned order was modified to set aside the fine imposed in lieu of unavailable cameras and reduce the penalty under Section 114A of the Customs Act to Rs. 25,000. The appeal was disposed of accordingly.