1992 (3) TMI 221 - AT - Customs

Summary

Issues:
1. Confiscation of Infant Incubators under Section 111(m) of the Customs Act
2. Imposition of penalty and enhancement of assessable value
3. Alleged misdeclaration of value
4. Special relationship with the supplier and discount claims
5. Justification of redemption fine and penalty

Analysis:

Issue 1: Confiscation of Infant Incubators under Section 111(m) of the Customs Act
The appeal was against an order confiscating 2 sets of Infant Incubators under Section 111(m) of the Customs Act, allowing redemption on payment of a fine of Rs. 30,000. The Additional Collector also imposed a penalty of Rs. 20,000 on the appellants. The appellants had filed a Bill of Entry for clearance, and discrepancies in declared value led to the confiscation order.

Issue 2: Imposition of Penalty and Enhancement of Assessable Value
The Additional Collector ordered an enhanced assessable value of Rs. 2,81,136 as opposed to the declared value of Rs. 1,70,430. The appellants argued that the equipment being life-saving, proper care arrangements post-import were crucial. Despite discrepancies, the appellants claimed no mala fide intent and voluntary document production.

Issue 3: Alleged Misdeclaration of Value
The appellants' shifting stance regarding their relationship with the supplier and price discrepancies raised concerns of misdeclaration. The JDR contended that the appellants altered their position to avoid duty payment, leading to penal proceedings.

Issue 4: Special Relationship with the Supplier and Discount Claims
The appellants claimed no special relationship with the supplier but presented a certificate indicating a 40% discount. However, the JDR argued that the certificate was solicited post-Bill of Entry filing, casting doubt on its validity. The price list showed a higher unit price than declared, raising questions about discounts.

Issue 5: Justification of Redemption Fine and Penalty
While upholding the enhanced value assessment, the Tribunal considered the appellants' production of documents and the life-saving nature of the goods. They deemed it appropriate to remit the redemption fine and penalty, acknowledging possible special discounts but emphasizing the need to assess based on normal prices for duty calculation.

In conclusion, the Tribunal upheld the confiscation and enhanced assessable value but remitted the redemption fine and penalty. The case highlighted the importance of accurate value declaration, consistency in statements, and the relevance of normal pricing in duty assessment, especially for critical equipment like Infant Incubators.