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2025 (2) TMI 24 - AT - CustomsValuation of imported goods - enhancement of the declared value of the imported goods - old and used worn clothing articles classifiable under Tariff Item No.63090000 of the First Schedule of the Act - HELD THAT - This issue came up before this Tribunal in the case of VENUS TRADERS RAINBOW INTERNATIONAL AL-YASEEN ENTERPRISES GLOBE INTERNATIONAL KRISHNA EXPORT CORPORATION PRECISION IMPEX BMC SPINNERS PVT. LTD. SHIVAM TRADERS LEELA WOOLEN MILLS M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI 2018 (11) TMI 625 - CESTAT MUMBAI wherein this Tribunal has observed the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. In the light of the admitted failure to comply with the licensing requirements we uphold the confiscation of the goods under Section 111(d) of Customs Act 1962. However it is our opinion that the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5%. Conclusion - The redemption fine and penalty imposed on the respondent to the tune of 10% 5% respectively on the assessed value is sufficient. Therefore the redemption fine and penalty confirmed by the ld.Commissioner (Appeals) are sufficient to meet the end of justice. There are no infirmity in the impugned order and the same is upheld - appeals filed by the Revenue are dismissed.
ISSUES PRESENTED and CONSIDERED
The primary legal issues considered in this judgment include: 1. Whether the enhancement of the declared value of the imported goods was justified. 2. Whether the confiscation of goods under Section 111(d) and Section 111(m) of the Customs Act, 1962, was appropriate. 3. Whether the imposition of redemption fine and penalty by the Adjudicating Authority, and its subsequent reduction by the Commissioner (Appeals), was reasonable and in accordance with the law. ISSUE-WISE DETAILED ANALYSIS 1. Enhancement of Declared Value The relevant legal framework involves the Customs Act, 1962, which governs the valuation of imported goods. The Tribunal referenced a prior case, Venus Traders vs. Commissioner of Customs, which discussed the applicability of Section 111(m) concerning goods that do not correspond with their declared value. The Court found that the enhancement of the declared value from US$ 0.92 per kg to US$ 1.316 per kg was based on the classification of the goods under Tariff Item No. 63090000, which is a restricted item for import. The enhancement was in line with the Foreign Trade Policy 2009-2014 and ITC HS Classification, which restricts the import of such goods without a valid license. 2. Confiscation under Section 111(d) and Section 111(m) Section 111(d) of the Customs Act, 1962, allows for the confiscation of goods imported without a valid license, as prescribed under the Foreign Trade Policy. The Tribunal found that the lack of an import license was undisputed, justifying confiscation under this section. Section 111(m) pertains to goods not corresponding in value or description with the entry made under the Act. However, the Tribunal noted that invoking Section 111(m) was not in conformity with the law, as proceedings were initiated before the filing of bills of entry, and there was no declaration to correspond with. In the referenced Venus Traders case, the Tribunal highlighted that confiscation under Section 111(m) requires a misdeclaration in the bill of entry, which was not applicable here. Therefore, the confiscation under Section 111(m) was not upheld. 3. Imposition and Reduction of Redemption Fine and Penalty The Adjudicating Authority initially imposed a redemption fine and penalty at 30% and 10% of the assessed value, respectively. The Commissioner (Appeals) reduced these to 10% and 5%. The Tribunal referenced the Venus Traders case, which emphasized that the redemption fine should not exceed the market price of the goods and should consider the margin of profit. The Tribunal found that the original authority failed to disclose the margin of profit that prompted the fine and penalty, as required by the remand order. Despite this procedural lapse, the Tribunal upheld the confiscation under Section 111(d) due to the admitted failure to comply with licensing requirements. The Tribunal concluded that the reduction of the redemption fine and penalty to 10% and 5% was sufficient to meet the ends of justice, aligning with the decision in the Venus Traders case. SIGNIFICANT HOLDINGS The Tribunal upheld the confiscation of goods under Section 111(d) of the Customs Act, 1962, due to the lack of a valid import license. The Tribunal found no infirmity in the reduction of the redemption fine and penalty by the Commissioner (Appeals) to 10% and 5% of the assessed value, respectively. Core Principles Established: - Confiscation under Section 111(d) is justified when goods are imported without a valid license as required by the Foreign Trade Policy. - Section 111(m) cannot be invoked without a corresponding declaration in the bill of entry. - Redemption fines should not exceed the market price and must consider the margin of profit, which should be disclosed to the importer. The appeals filed by the Revenue were dismissed, and the impugned order was upheld, affirming the sufficiency of the reduced redemption fine and penalty.
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