1989 (12) TMI 181 - AT - Customs

Summary

Issues:
1. Confiscation of empty cement bags for non-compliance with re-export conditions.
2. Imposition of duty on the imported cement bags.
3. Validity of the redemption fine imposed in lieu of confiscation.
4. Assessment of the value of the cement bags for duty calculation.
5. Plea of limitation raised by the appellants.

Analysis:

Issue 1: Confiscation of empty cement bags
The case involved the importation of cement bags by the appellants, which were required to be re-exported within 6 months. However, only a fraction of the bags were re-exported, leading to non-compliance with the conditions. The Customs authorities confiscated the unreturned bags and imposed a fine in lieu of confiscation. The tribunal found that the confiscation was not justified as the goods were not available for confiscation, and the invocation of Section 125 for the redemption fine was improper. The tribunal set aside the redemption fine and allowed the appeal.

Issue 2: Imposition of duty
The Customs authorities imposed a duty on the unreturned cement bags based on the original valuation at the time of import. The tribunal upheld the duty quantification at Rs. 80,27,787.33, considering the assessable value of US $26 per bag as per the supplier's telex. The appellants contested the valuation but failed to provide sufficient evidence to challenge the assessable value. The tribunal rejected the appeal against the duty imposition.

Issue 3: Validity of redemption fine
The tribunal found that the redemption fine of Rs. 5 lakhs imposed in lieu of confiscation was not valid as the goods were not available for confiscation. The tribunal set aside the redemption fine and provided consequential relief to the appellants.

Issue 4: Assessment of the value of cement bags
The appellants disputed the assessable value of US $26 per bag and proposed alternative valuations. However, the tribunal upheld the Customs authorities' valuation based on the supplier's telex at the time of import. The tribunal found no reason to interfere with the duty quantification based on the US $26 per bag valuation.

Issue 5: Plea of limitation
The appellants raised a plea of limitation regarding the demand for duty on the cement bags. Insufficient evidence was presented to determine the extent of pilferage and non-return of bags, as well as any granted extensions for re-export. The tribunal remanded the matter to the Assistant Collector for a fresh adjudication on the limitation issue within three months.

In conclusion, the tribunal set aside the redemption fine, upheld the duty imposition based on the assessable value of US $26 per bag, and remanded the limitation issue for further examination.