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Issues: Mis-declaration of value leading to confiscation under Section 111(m) of the Customs Act, imposition of redemption fine and personal penalty disproportionate to the duty involved, dispute over market price determination, plea for liberty to produce evidence regarding market price, remand for proper determination of market price and subsequent penalty.
In this case, the appellants imported pistons without pin and clip from Taiwan under the OGL (Import Policy 1997-2002 AM). Customs authorities suspected undervaluation as the declared value seemed low. A show cause notice was waived, and the Deputy Commissioner of Customs confiscated the goods under Section 111(m) and imposed a redemption fine of Rs. 14,00,000/- along with a personal penalty of Rs. 3.75 lakhs. The appellants contended that the fine and penalty were excessive compared to the differential duty involved, estimated at Rs. 75,493/-. They argued that the market prices used for calculating the fine were inflated and provided evidence to support lower prices. The appellants also claimed that the initially indicated redemption fine and penalty were much lower than what was imposed, seeking a reduction. The appellants' advocate argued that the fine and penalty were disproportionate and based on inflated market prices. They presented bills from dealers to support lower market prices and questioned the calculation method used by the authorities. The advocate highlighted discrepancies in the initial indication of the fine and penalty compared to the final imposition, emphasizing the need for consistency in the penalty determination process. The advocate requested the liberty to produce further evidence regarding the market price prevalent at the time of importation. The Tribunal observed that while mis-declaration of value was evident, the determination of the penalty and fine depended on the accurate market price of the goods. The market price was a contentious issue, with discrepancies between the authorities' assessment and the appellants' evidence. The Tribunal emphasized the necessity of determining the correct market price before imposing penalties. Consequently, the Tribunal set aside the impugned order and directed the adjudicating authority to ascertain the accurate market price, allowing both parties to present evidence and rebut each other's claims. The appeal was allowed by remand for proper determination of the market price and subsequent penalty. The Tribunal also instructed the adjudicating authority to expedite the case, considering the goods had been in customs custody since 1997, and mandated a decision within one month from the receipt of the order. This comprehensive analysis addresses the issues of mis-declaration, disproportionate penalties, market price dispute, evidence production, and the remand for a fair determination of penalties based on the correct market price.
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