2024 (4) TMI 183 - AT - Customs

Misdeclaration of value of goods - Confiscation of goods - Redemption fine - Imposition of penalty - Whether, the Assessable Value for the third machines can be revised on account of the compensation paid by the foreign supplier - HELD THAT - The appellant had ordered two pieces each of two different machines and the foreign supplier by mistake and sent three pieces of one machines and one piece of the other machine. We find that the it is undisputed fact that the importer had no knowledge about the mistake committed by the foreign supplier. Thus, it can be seen that the importer had in fact declared Assessable Value in excess of the value of goods actually received by US 20,000/- as a result of a mistake committed by the foreign supplier. In this background, we do not think that there was any malafides on the part of the importer. Following the decision in BANSAL INDUSTRIES 2004 (1) TMI 250 - CESTAT, CHENNAI , we do not find that there is any merit in invoking Section 111 and 112 in the instant case. Consequently, the confiscation of goods, imposition of redemption find and imposition of penalty u/s 112 cannot be sustained and the same is set aside. As regard, revision of Assessable Value for one machine from US 39,000/- to US 38,000/-, the said aspect has not been challenged by appellant in their appeal memorandum nor are there any assertions in their written submission. Therefore, the said issue has not been disputed by appellant. Appeal is allowed in above terms.

Summary

Issues Involved: Appeal against demand of customs duty, rejection of declared value, penalty u/s 112(a), confiscation of goods, and imposition of redemption fine u/s 125 of Customs Act, 1962.

Issue 1 - Misdeclaration and Confiscation under Section 111(b):
The appellant ordered two different machines, but the foreign supplier mistakenly sent three pieces of one machine and one piece of the other. The appellant had no knowledge of this mistake and declared an assessable value higher than the actual value received due to the supplier's error. Citing precedent cases, it was argued that there was no deliberate intention to breach the law. The Tribunal found no malafides on the part of the importer and set aside the confiscation of goods and penalty under Section 112.

Issue 2 - Revision of Assessable Value:
The foreign supplier admitted the mistake and offered compensation of US$1,000 for the extra machine sent. The appellant sought to clear the third machine at an assessable value of US$38,000. The Tribunal noted that the appellant did not challenge this revision in their appeal, and as it was not disputed, the revision from US$39,000 to US$38,000 was accepted.

In conclusion, the appeal was allowed, and the confiscation of goods, redemption fine, and penalty under Section 112 were set aside due to the lack of deliberate misdeclaration by the importer. The revision of the assessable value for one machine was accepted as uncontested by the appellant.