1999 (3) TMI 148 - AT - Customs

Summary

Issues Involved:
The issues involved in the judgment are the under valuation of imported machinery, the technical contravention of Customs regulations, the authority of the Collector to order re-export of goods on payment of redemption fine, and the interpretation of Section 125 of the Act regarding redemption and re-export of goods.

Under Valuation of Imported Machinery:
The appellant imported machinery for use in manufacturing hydraulic valves but later sought reshipment due to commercial viability concerns. The Custom House issued a notice for confiscation on grounds of undervaluation, age of import, and procedural formalities. The Collector found in favor of the importer on undervaluation, considering bank guarantee issues as technical, and permitted re-export on payment of a redemption fine of Rs 5.00 lakhs.

Technical Contravention and Authority of the Collector:
The appellant argued that if a contravention is technical, confiscation or fines should not apply, citing a Tribunal decision. The departmental representative supported the impugned order. The Collector found the contravention not significant but ordered confiscation as the goods were imported under Open General Licence (OGL) instead of the Customs Clearance Permit, justifying the confiscation.

Interpretation of Section 125 of the Act:
Section 125 empowers adjudicating officers to allow redemption of goods in lieu of confiscation. While the section does not specifically mention re-export, it applies to both imported and exported goods. The judgment clarifies that re-export is distinct from redemption for home consumption, and the law does not prohibit the Collector from permitting re-export. The practice of re-export simplifies procedural requirements and is not contrary to law. The Collector's order was deemed correct, but the redemption fine was reduced to Rs. 2.50 lakhs due to the gravity of the offense.