1995 (10) TMI 99 - AT - Customs

Summary

Issues Involved:
1. Valuation of imported goods.
2. Misdeclaration of value.
3. Confiscation of goods.
4. Imposition of redemption fine.
5. Imposition of penalty.
6. Requirement of import license.

Detailed Analysis:

1. Valuation of Imported Goods:
The Collector of Customs determined the valuation of "Out-Board Motors" at US $1040.60 per unit (CIF) for customs duty assessment. The appellants contested this valuation, claiming their invoice value of US $175 per unit was correct, citing the goods were outdated and sold at a discounted rate. The Collector rejected this, finding the goods identical to those imported by M/s. Shalimar Works Ltd. at a higher price, and concluded the appellants had undervalued the goods.

2. Misdeclaration of Value:
The department alleged the appellants misdeclared the value of the imported goods. Evidence included seized documents and a statement from the appellants' authorized signatory, which indicated the goods were undervalued. The Collector found the appellants' explanations unconvincing and upheld the charge of misdeclaration, supported by comparable transactions and price lists that contradicted the appellants' declared values.

3. Confiscation of Goods:
The goods were held liable for confiscation under Section 111(m) of the Customs Act, 1962, for misdeclaration of value. The appellants were given the option to redeem the goods on payment of a fine of Rs. 5 lakhs under Section 125 of the Customs Act, 1962.

4. Imposition of Redemption Fine:
The Collector imposed a redemption fine of Rs. 5 lakhs, which was upheld by the Tribunal. The appellants' contention for reducing the fine was rejected, as the evidence supported the finding of undervaluation.

5. Imposition of Penalty:
A personal penalty of Rs. 5 lakhs each was imposed on the appellants under Section 112(a) of the Customs Act, 1962. The Tribunal, considering the duty payable, reduced the penalty to Rs. 1 lakh each, acknowledging the deliberate misdeclaration and undervaluation.

6. Requirement of Import License:
The Collector accepted the appellants' plea that the goods were freely importable and no license was required. The Revenue did not appeal this finding, and it was not a point of contention before the Tribunal.

Conclusion:
The Tribunal upheld the Collector's findings on undervaluation and misdeclaration of the imported goods. The evidence presented, including comparable transactions and price lists, supported the conclusion that the appellants had undervalued the goods. The confiscation of goods and imposition of redemption fine were justified. The penalty was reduced to Rs. 1 lakh each, considering the duty payable. The appeal was rejected on merits, with the penalty reduction being the only modification.