1998 (4) TMI 249 - AT - Customs

Summary

Issues:
1. Valuation of imported goods
2. Confiscation of goods under Customs Act, 1962
3. Justification for imposing redemption fine and penalty

Valuation of Imported Goods:
The appellant imported a consignment of condenser mikes and declared a value of Rs. 9885 for 50,000 pieces. The Customs House required a certificate of origin, which was produced showing the goods to be of Japanese origin. The Collector of Customs rejected the declared value and determined it to be Rs. 1,15,000 based on contemporaneous imports of similar Japanese goods. The appellant argued that the goods were purchased at a reduced price as stock lot, supported by letters from the supplier. The Tribunal found the appellant's pricing to be genuine in international trade, especially considering the unbranded nature of the goods compared to branded goods in the contemporaneous import. Thus, the Tribunal held there was no justification to enhance the price or confiscate the goods under Section 111(m) of the Act.

Confiscation of Goods under Customs Act, 1962:
The appellant did not dispute the absence of a license produced before customs authorities, justifying confiscation under Section 111(d) of the Act. However, the Tribunal found the appellant's pricing to be genuine based on evidence provided, indicating the goods were not undervalued. The Collector's characterization of the appellant's explanation as a flimsy excuse was deemed unfounded, as the letters from the supplier supported the appellant's pricing as legitimate in international trade. The Tribunal confirmed the confiscation under Section 111(d) with an option to redeem on payment of a fine.

Justification for Imposing Redemption Fine and Penalty:
The Collector imposed a redemption fine of Rs. 1,00,000 and a penalty of Rs. 1,00,000, which the Tribunal found excessive. Considering the genuine pricing of the goods, the Tribunal set aside the part of the order enhancing the price and confiscating the goods under Section 111(m) of the Act. The Tribunal confirmed the confiscation under Section 111(d) with a reduced redemption fine of Rs. 50,000 and a penalty of Rs. 50,000, allowing the appeal in part.

In conclusion, the Tribunal upheld the genuine pricing of the imported goods, set aside the excessive fines and penalties, and confirmed the confiscation under Section 111(d) of the Customs Act, 1962, with a reduced redemption fine and penalty.