2000 (9) TMI 286 - AT - Customs

Valuation - Evidence of informer - Embroidery machines - Notification No. 16/85-Cus.- Confiscation of goods

Summary

Issues:
1. Valuation of imported embroidery machines for assessment of duty.
2. Eligibility for the benefit of Notification 16/85.
3. Confiscation and penalties imposed for contravention of import policy.
4. Dispute regarding under valuation charge and evidence presented.
5. Interpretation of the exemption under Notification 16/85.
6. Consideration of residual life and penalties on partnership firm and partners.
7. Reduction of redemption fine and penalties imposed.

Analysis:
1. The judgment deals with the valuation of two imported embroidery machines in 1993. The Collector of Customs assessed the value for duty at Rs. 77.00 lacs, higher than the declared value of Rs. 54.00 lacs, leading to confiscation, penalties, and an option for redemption.

2. The importer's declared value was initially accepted, but subsequent investigation by the Directorate of Revenue Intelligence alleged under valuation based on a document from the supplier. The document lacked authentication and was provided by an interested informer, raising doubts about its validity as evidence.

3. The dispute also involved the applicability of Notification 16/85, which exempted certain types of embroidery machines. The imported machines did not fall under the exempted categories, but the judgment highlighted the distinction between specialized and general embroidery machines for eligibility.

4. Although the machines were liable for confiscation due to policy contravention, the appellant argued being misled by the supplier. The judgment considered the machines' residual life, usage, and the legal position that penalties cannot be imposed on partnership firms and partners simultaneously.

5. Consequently, the redemption fine was reduced from Rs. 20.00 lacs to Rs. 8.00 lacs, and the penalty on the firm was set aside. However, the penalty on the managing partner was confirmed, leading to the dismissal of one appeal and partial allowance of the other.

This detailed analysis of the judgment highlights the key issues surrounding the valuation, eligibility for exemptions, policy contravention, evidence authentication, and penalty imposition, providing a comprehensive overview of the legal aspects considered by the Appellate Tribunal CEGAT, Mumbai.