1989 (2) TMI 288 - AT - Customs

Summary

Issues Involved:
1. Mis-declaration of goods and value
2. Applicability of Section 14 and Rule 8 of Customs Valuation Rules
3. Confiscation and redemption of goods
4. Imposition and reduction of penalty

Issue-wise Detailed Analysis:

1. Mis-declaration of Goods and Value:
The appellants declared the importation of "Four sets of Second-hand KIS brand still PHOTOGRAPHY PROCESSING AND PRINTING EQUIPMENT" valued at Rs. 1,06,146 based on an invoice. However, upon examination, it was found that the actual consignment included 17 units, comprising both new and old equipment, along with additional items not declared in the Bill of Entry. The declared value was significantly lower than the appraised value of Rs. 37,88,705. The appellants argued that the imported machines were an older "Papier Model" and not the "Magnum Speed Model" as claimed by the Revenue. The Tribunal found inconsistencies in the Chartered Engineer's certificate and the examination report, ultimately concluding that the machines imported were indeed "Papier Models."

2. Applicability of Section 14 and Rule 8 of Customs Valuation Rules:
The Tribunal held that the value declared in the invoice could not be accepted under Section 14(1)(a) of the Customs Act, 1962, due to the mis-declaration. Instead, the valuation had to be done under Section 14(1)(b) read with Rule 8 of the Customs Valuation Rules. The Tribunal determined the value for 9 sets of color processors and printers at US $2,000 per set FOB and for 8 sets at US $3,000 per set FOB, based on the condition and age of the equipment.

3. Confiscation and Redemption of Goods:
The Tribunal noted that the Collector had absolutely confiscated 13 sets of KIS Mini Lab systems under Section 111(m), (l), and (d) of the Customs Act. However, under Section 125, the owner should be given an option to redeem the goods on payment of a fine. The Tribunal ordered that the appellants could redeem the 13 Mini Lab systems by paying a fine of Rs. 4,75,000, considering the totality of the facts and circumstances. The value of the two additional printers was fixed at US $1,200 FOB each.

4. Imposition and Reduction of Penalty:
The Tribunal acknowledged that the appellants had undervalued and mis-declared the imported goods. Consequently, the penalty under Section 112(a) of the Customs Act, 1962, was initially set at Rs. 5 lakhs. However, considering the circumstances, the Tribunal reduced the penalty to Rs. 4 lakhs. The Revenue authorities were directed to give consequential effect to this order.

Conclusion:
The Tribunal's decision addressed the mis-declaration and undervaluation issues by reassessing the value of the imported goods and providing an option for redemption. The penalty was also reduced, emphasizing a balanced approach in adjudicating the case.