2001 (3) TMI 420 - AT - Customs

Summary

Issues:
Classification of imported goods as 'Dried Garlic'
Valuation of imported goods
Confiscation under Section 111(d) and 111(m) of Customs Act, 1962
Penalty under Section 112A of Customs Act, 1962

Classification of imported goods as 'Dried Garlic':
The appellants imported dry garlic of Chinese origin but faced issues as the Custom House found the moisture content to be 64%, not aligning with the declaration of 'Dried Garlic.' The goods were considered not freely importable under the declared heading and were held liable for confiscation under Section 111(d) and 111(m) of the Foreign Trade (Development and Regulation) Act, 1992. The tribunal referred to a previous case and concluded that the goods should be classified under a different heading, 07129004, instead of 07032000, as per the WRB decision. The tribunal emphasized that the clarification by DGFT introducing moisture content conditions was not a valid policy change, and the customs authorities' actions were deemed incorrect in law.

Valuation of imported goods:
The Commissioner had imposed a penalty based on valuation, comparing the declared value with the price at another port. However, the tribunal found that the Commissioner had disregarded crucial evidence and the Supreme Court's decision in the Eicher Tractors case. The tribunal emphasized that if the transaction value can be determined under Rule 4(1) without falling under exceptions in Rule 4(2), there should be no need to determine the value under subsequent rules. Therefore, the tribunal set aside the order and remanded the case to the Commissioner for reevaluation of the valuation to determine if the goods were liable for confiscation under Section 111(m) of the Customs Act, 1962.

Confiscation under Section 111(d) and 111(m) of Customs Act, 1962:
The tribunal set aside the order regarding liability for confiscation under Section 111(d) of the Customs Act, 1962, and allowed the appeal for de novo adjudication on the liability of confiscation under Section 111(m). The case was remanded to the Commissioner to reconsider the valuation and determine the penalty accordingly.

Penalty under Section 112A of Customs Act, 1962:
A penalty of Rs. 4 lakhs was levied under Section 112A of the Customs Act, 1962, due to the goods being released and not available for confiscation. The tribunal allowed the appeal for de novo adjudication on the penalty, emphasizing the need for a reevaluation based on the Commissioner's decision regarding valuation and confiscation under Section 111(m).

In conclusion, the tribunal set aside the original order, allowed the appeal for reevaluation on various aspects, and remanded the case for further adjudication regarding the classification, valuation, confiscation, and penalty issues involved in the import of dry garlic of Chinese origin.