1996 (2) TMI 280 - AT - Customs

Summary

Issues: Misdeclaration of goods, undervaluation, confiscation, penalty

Misdeclaration of Goods:
The appellants imported shoulder pads and lining materials from West Germany, declaring the assessable value based on the invoice. A show cause notice alleged misdeclaration and undervaluation, leading to evasion of Customs duty. The Collector accepted the first item as shoulder pads but confiscated the other items for not being covered by the licenses produced. The appellants argued for the genuineness of the transaction, but the Collector upheld the misdeclaration charge based on evidence provided by the Directorate of Revenue Intelligence and an invoice from a related importer.

Undervaluation and Confiscation:
The Collector determined the assessable value based on prices obtained by the D.R.I., leading to allegations of undervaluation and evasion of Customs duty. The Collector confiscated the items not covered by the licenses produced under Section 111(d) of the Customs Act, 1962. The appellants contested the assessment, arguing that the prices were negotiated due to the leftover nature of the imported materials, but the Collector rejected their plea, upholding the confiscation.

Penalty Imposition:
The Collector imposed a penalty of Rs. 10,000 on the appellants for misdeclaration of the width and value of the goods. The appellants argued that the penalty was excessive for the small value of the import. The Senior Departmental Representative contended that the personal hearing fulfilled procedural requirements, citing a relevant court decision. The Tribunal upheld the Collector's decision on valuation and confiscation but reduced the penalty to Rs. 5,000, finding it more appropriate in the circumstances.

In conclusion, the Tribunal found the Collector's decision on valuation and confiscation to be correct and upheld it. The fine in lieu of confiscation was deemed acceptable. However, the penalty was reduced from Rs. 10,000 to Rs. 5,000 to align with the circumstances of the case. The appeal was partly allowed in regard to the penalty, with the reduced amount deemed sufficient to meet the ends of justice.