1991 (6) TMI 144 - AT - Customs

Summary

Issues Involved:
1. Mis-declaration of goods
2. Validity of import licence
3. Valuation of imported goods
4. Confiscation and penalty

Detailed Analysis:

1. Mis-declaration of Goods:
The appellants filed a Bill of Entry for warehousing a consignment described as decorative paper for laminates. Upon examination, it was found that the goods were actually wall paper, not decorative paper for laminates. The Customs House found the import unauthorized, as the import licence did not cover wall paper. The appellants argued that the examination of the goods was not proper and that the samples were under Customs control, thus they could not have changed them. However, the Customs House found evidence of mis-declaration, including labels and catalogues indicating the goods were wall paper. The tribunal upheld the Customs House's findings, noting that the appellants had not denied that the goods could be used as wall paper.

2. Validity of Import Licence:
The import licence produced was for decorative paper for laminates, but the goods were found to be wall paper, a consumer goods item covered by S. No. 121 of Appendix 2B of the Import Policy 1985-88. The tribunal agreed with the Customs House that the import licence was not valid for the imported goods. The goods were classified based on their condition at the point of import, and the presence of catalogues and sample books not listed in the packing list further supported the classification as wall paper.

3. Valuation of Imported Goods:
The Department enhanced the value of the imported goods based on a price quotation from the same supplier, showing a higher value than declared. The tribunal upheld this valuation, citing the Supreme Court's decision in Sharp Business Machines v. Collector of Customs, which allowed the use of price quotations for valuation under Sec. 14(1) (b) of the Customs Act, 1962. The appellants' evidence of valuation was found insufficient as it did not include brand names or was outdated. The tribunal also rejected the argument that the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 should apply, as the Bill of Entry was filed in 1987.

4. Confiscation and Penalty:
The goods were confiscated under Section 111(d) and (m) of the Customs Act, 1962, with a fine of Rs. 4.5 lakhs in lieu of confiscation. A personal penalty of Rs. 2 lakhs was imposed on the appellants, and Rs. 10,000 on the Customs House Agents. The tribunal found the confiscation justified as the goods were imported without a valid licence. However, considering some mitigating factors, the tribunal reduced the personal penalty on the appellants from Rs. 2 lakhs to Rs. 1 lakh. The tribunal upheld the rest of the Additional Collector's order, including the enhanced valuation and the classification of the goods under Heading 48.14 of the Customs Tariff Act.