1990 (3) TMI 201 - AT - Customs

Summary

Issues Involved:
1. Validity of the import license.
2. Confiscation of goods under Section 111(d) of the Customs Act, 1962.
3. Valuation of imported goods.
4. Penalties imposed.

Issue-wise Detailed Analysis:

1. Validity of the Import License:
The appellants, a Public Limited Company, imported components for photocopying machines under a license issued by the DGTD. The Collector found that the goods imported were not covered by the license, leading to their confiscation. The appellants argued that the imported parts were covered by the license and that the list attached should be interpreted to include assemblies and sub-assemblies. However, the Tribunal held that the nomenclature in the license must be interpreted strictly. The license listed 52 specified components, and the import of these components was subject to conditions such as quantity and value restrictions, and exclusion of electronic components. The Tribunal upheld the Collector's decision, stating that the license did not cover the imported goods, thereby affirming the confiscation under Section 111(d).

2. Confiscation of Goods under Section 111(d):
The appellants were issued a show cause notice alleging that the imported goods were complete photocopying machines, not components, and were undervalued. The Collector concluded that the goods were not covered by the import license and confiscated them under Section 111(d) of the Customs Act, 1962. The Tribunal agreed with the Collector's findings, noting that the imported goods were nearly complete machines and that the license did not cover them. Consequently, the confiscation of the goods was upheld.

3. Valuation of Imported Goods:
The Collector rejected the invoice values, suspecting undervaluation due to the relationship between the appellants and the supplier. The appellants argued that there was no mutual interest and that the transaction was at arm's length. The Tribunal found that the parties were not related persons, as there was only technical collaboration and no evidence of mutual interest. It held that the rejection of the invoice was incorrect and ordered that the invoice value should be accepted. However, for the cover glass imported over and above the order, the Tribunal directed the Collector to re-examine and appraise its value.

4. Penalties Imposed:
The Collector imposed penalties on the appellants for the alleged violations. Given the Tribunal's decision to accept the invoice value, the penalties were reassessed. The fines and penalties were reduced as follows:
- Appeal No. C/621/87-A: Fine reduced to Rs. 3 lakhs; penalty to Rs. 37,500.
- Appeal No. C/622/87-A: Fine reduced to Rs. 11.5 lakhs; penalty to Rs. 1.5 lakhs.
- Appeal No. C/623/87-A: Fine reduced to Rs. 3 lakhs; penalty to Rs. 18,500.
- Appeal No. C/624/87-A: Fine reduced to Rs. 11.25 lakhs; penalty to Rs. 1.5 lakhs.

Conclusion:
The Tribunal dismissed the appeal regarding the validity of the import license but allowed it on the question of valuation. The value of the cover glass was to be re-examined by Customs. The fines and penalties were reduced accordingly, and the appeals were partly allowed in these terms.