1991 (5) TMI 136 - AT - Customs

Summary

Issues Involved:

1. Validity of Import License
2. Mis-declaration of Goods
3. Valuation of Imported Goods
4. Confiscation and Penalty

Issue-wise Detailed Analysis:

1. Validity of Import License:

The appellants imported goods described as 'synthetic rubber products' (erasers) and 'synthetic rubber' under Import Licenses issued under paras 175 & 177 of Import Policy, 1988-91, claiming they were covered under Appendix 3-A Sl. No. 396. The Customs House found that the goods were consumer goods covered by entry No. 145 of Appendix 2-B of Import & Export Policy, 1988-91, and the Import License value had been exceeded. The Customs authorities concluded that the erasers were consumer goods directly satisfying human needs, thus not covered by the licenses produced.

The Customs authorities' examination confirmed that the goods were consumer goods (erasers) sold in the market, thus falling under entry No. 145 of Appendix 2-B. The Chief Controller of Import & Export also confirmed this classification. Therefore, the import licenses produced were deemed invalid for the imported goods, leading to the confiscation of the goods under Section 111(d) of the Customs Act, 1962.

2. Mis-declaration of Goods:

The appellants described the goods as 'synthetic rubber products' and 'synthetic rubber' in the Bill of Entry. However, upon examination, the Customs authorities found the goods to be rubber erasers, which are consumer goods. The Additional Collector held that there was a mis-declaration as the goods were not given the true description as 'eraser'. The goods were found to be finished products, sold as stationery items, thus falling under consumer goods category. This mis-declaration led to the confiscation of the goods under Section 111(m) of the Customs Act, 1962.

3. Valuation of Imported Goods:

The Customs authorities found discrepancies in the declared value and the actual value of the goods. The appellants were accused of under-declaring the value, with the assessable value being significantly higher than declared. The Additional Collector determined the value by considering the actual freight charges and other factors, finding that the declared value was not reliable. The valuation was done under Section 14(1) of the Customs Act, 1962, read with Rule 11 of the Customs Valuation Rules, 1988. The Additional Collector's method of determining the assessable value was found to have certain infirmities, and the benefit of doubt was extended to the appellants, accepting the declared value for assessment purposes.

4. Confiscation and Penalty:

The goods were ordered to be confiscated under Section 111(d) & (m) of the Customs Act, with fines in lieu of confiscation and personal penalties imposed on the appellants. The quantum of redemption fine was modified to be 100% of the declared assessable value, and the personal penalty was reduced to Rs. 50,000/- in respect of both orders. The appeals were disposed of with these modifications.

Conclusion:

The judgment addressed the issues of the validity of the import license, mis-declaration of goods, valuation discrepancies, and the resulting confiscation and penalties. The Customs authorities' findings on the nature of the goods as consumer goods were upheld, leading to the confiscation of the goods. However, the declared value for assessment purposes was accepted, and the penalties were reduced, providing some relief to the appellants.