2006 (7) TMI 52 - AT - Customs

Customs Baggage - List of items declared by the owner without declaring value not amount to mis-declaration to justify confiscation / penalty. For the purpose of valuation, best judgment value under rule 8 is more appropriate. New goods not in possession during stay abroad not entitled to benefit of transfer of residence.

Issues Involved:
1. Mis-declaration of the value of goods.
2. Confiscation of goods under Section 111(m) of the Customs Act, 1962.
3. Imposition of penalty under Section 112(a) of the Customs Act, 1962.
4. Applicability of Valuation Rules, 1988.
5. Eligibility for Transfer of Residence (TR) benefit under the Baggage Rules, 1998.

Issue-wise Detailed Analysis:

1. Mis-declaration of the Value of Goods:
The appellant filed a Baggage Declaration Form (BDF) declaring the value of goods at Rs. 4.79 lakhs. However, upon detailed examination, the Customs authorities assessed the value at Rs. 1,98,52,163/-. The appellant argued that the BDF was filled by his agent without his knowledge and consent, and thus, the declared value should not be considered as mis-declaration. The Tribunal noted that the appellant had attached a detailed packing list with the BDF, which disclosed the contents of his baggage, fulfilling the requirement of Section 77 of the Customs Act. The Tribunal held that the absence of a value declaration for the 237 items in the packing list did not constitute mis-declaration, as there was no statutory obligation to declare the value in the BDF.

2. Confiscation of Goods under Section 111(m) of the Customs Act, 1962:
The Customs authorities confiscated the goods on the grounds of mis-declaration of value under Section 111(m). The Tribunal found that the appellant had acted bona fide by providing a detailed packing list and that the non-declaration of value could not be considered mis-declaration. The Tribunal held that the goods should not be confiscated based on the non-declaration of value, as the primary obligation under Section 77 was to declare the contents, which the appellant had done.

3. Imposition of Penalty under Section 112(a) of the Customs Act, 1962:
The Customs authorities imposed a penalty of Rs. 15 lakhs on the appellant under Section 112(a). The Tribunal considered the mitigating factor that the appellant had signed a blank declaration, which was filled by the agent without his knowledge. The Tribunal reduced the penalty to Rs. 25,000, considering the appellant's bona fide actions and the fact that the goods were detained for a long time, incurring demurrage charges.

4. Applicability of Valuation Rules, 1988:
The Customs authorities used local market prices and internet prices to assess the value of the goods, which the appellant contested. The Tribunal held that the Valuation Rules, 1988, should apply to baggage imports, and the method used by the Customs authorities was not legally valid. The Tribunal rejected the valuation based on local market prices and internet prices, stating that these methods were not reliable. The Tribunal accepted the value declared by the appellant in his statement under Section 108, which was Dirham 5.25 lakhs (equivalent to Rs. 66 lakhs), plus Rs. 4.5 lakhs for used items, totaling Rs. 66 lakhs as the assessable value.

5. Eligibility for Transfer of Residence (TR) Benefit under the Baggage Rules, 1998:
The Customs authorities denied the TR benefit on the grounds that the appellant did not prove his intention to return to India, the goods were shipped from the USA while the appellant resided in Dubai, and the goods were in commercial quantity. The Tribunal agreed that the TR benefit could not be granted for goods shipped from the USA as they were not in the appellant's possession during his stay abroad. However, the Tribunal noted that the duty difference due to the denial of TR benefit was minimal and reduced the redemption fine to Rs. 50,000.

Conclusion:
The Tribunal partly allowed the appeal, reducing the redemption fine to Rs. 50,000 and the penalty to Rs. 25,000. The Tribunal held that the appellant had fulfilled the obligation of declaring the contents of the baggage and that the valuation method used by the Customs authorities was not legally valid. The assessable value was determined to be Rs. 66 lakhs, and the TR benefit was denied only for goods shipped from the USA. The appellant was granted consequential relief.

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