2009 (6) TMI 365 - AT - Customs

Foreign origin goods valuation - As rightly pointed out by the learned advocate, what has been indicated in the Panchanama, and admitted by the appellant in his statement, is that the market value of the goods is Rs. 95/- per kg. Therefore, it would not be fair to charge duty on the market value of the goods prevailing in India once it is established that the goods are of foreign origin. - We also find considerable force in the argument advanced by the learned counsel that there is no need to find out contemporaneous import price in this case. That is required only in the case of regular import and not in the case of the goods smuggled. - request of learned counsel that the market value may be treated as cum-duty price is the best option under the circumstances rather than striving to find out value based on contemporaneous import. In view of the above, we set aside the impugned order and remand the matter to the original adjudicating authority who shall treat Rs. 95/- per kg as cum-duty price and arrive at duty liability afresh. We make it clear that only duty element will be deducted considering Rs. 95/- per kg as cum-duty price. Further, in view of the fact that this would reduce the quantum of duty payable by the appellant, the redemption fine as well as penalty will have to be reconsidered.

Issues:
1. Seizure and confiscation of imported polyester yarn.
2. Market value vs. assessable value for charging duty and imposing redemption fine.
3. Consideration of contemporaneous import price.
4. Appeal against the impugned order upholding confiscation, redemption fine, and penalty.

Analysis:

Seizure and Confiscation of Imported Polyester Yarn:
The preventive wing of the Customs department conducted a search at the premises of a company and found imported polyester yarn packed in used cartons. The company's manager produced documents for some cartons but not for all. Further, the appellant claimed to have purchased the yarn from another party, and the regional manager confirmed the delivery of the yarn by brokers. Subsequently, 10,136 kgs of yarn were seized, leading to the initiation of proceedings culminating in the impugned order upholding confiscation, redemption fine, and penalty.

Market Value vs. Assessable Value for Charging Duty and Imposing Redemption Fine:
The appellant acknowledged the liability of the goods to confiscation due to the absence of evidence proving non-smuggling. However, a key contention was regarding the value adopted for charging duty and redemption fine. The appellant argued that the market value of Rs. 95/- per kg should be considered as the cum-duty price, reducing the duty liability. The Tribunal agreed with this argument, emphasizing that the market value, as recorded in the Panchnama, should be treated as the cum-duty price, thereby necessitating a reevaluation of duty liability, redemption fine, and penalty.

Consideration of Contemporaneous Import Price:
The appellant's counsel contended that there was no requirement to establish contemporaneous import price since the market value already included various components such as profit, customs duty, and handling charges. The Tribunal concurred, stating that in cases of smuggled goods, market value suffices for determining duty liability, obviating the need for contemporaneous import price verification. This approach was deemed appropriate, leading to the remand of the matter for a fresh assessment based on the market value of Rs. 95/- per kg.

Appeal Against the Impugned Order:
Upon considering the submissions, the Tribunal set aside the impugned order and remanded the case to the original adjudicating authority. The authority was directed to treat the market value as the cum-duty price, recalculating duty liability while also reevaluating the redemption fine and penalty in light of the reduced duty payable by the appellant. The appellant was granted the opportunity to present their case afresh during the reevaluation process, ensuring a fair consideration of all relevant factors.

This detailed analysis highlights the key legal aspects and arguments presented in the judgment, emphasizing the Tribunal's decision on the valuation of imported goods for duty purposes and the subsequent implications on confiscation, redemption fine, and penalty assessments.

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