2016 (4) TMI 275 - AT - Customs

Confiscation of goods and imposition of penalty - Mis-declaration of quantity of goods - Import of Gold, Platinum and Silver Jewellery (Plain) - Jewellery purchased in auction in Italy - Held that - it is not a regular case of import of jewellery, the declarations in the bill of entry were made based upon the invoice issued by M/s Graser, Italy (exporter), which has the stamp of approval by the Court of Bassano Del Grappa, Italy as also by the official liquidator. It is the total cost of the entire consignment, which stands paid by the assessee to the foreign exporter in terms of the auction bid accepted by the Court and the entire consignment is covered by the letter of the official liquidator. Hence, no mis-declaration as regards quantity of the goods can be attributed to the assessee. In as much as the value of the entire consignment including the value of the alleged excess found quantity stands declared by the appellant, the said factor cannot be made a ground either for confiscation of the goods or for imposition of penalty upon the appellant. - Decided in favour of appellant with consequential relief

Summary

Issues:
1. Valuation of imported goods
2. Confiscation of goods
3. Imposition of penalty

Valuation of imported goods:
The appellant declared the import of Gold, Platinum, and Silver Jewellery at a cost of Rs. 31,65,657. However, officers doubted the declared value and seized the consignment, believing it to be undervalued. Investigations revealed that the jewellery was purchased during an auction in Italy, and the value was enhanced by the Commissioner based on the timing of payment and importation. The appellant argued that the transaction value should be accepted as per Section 14 of the Customs Act, emphasizing that the price paid was genuine. The Tribunal noted that there was no valid reason to reject the declared value when there was no doubt about the payment made by the appellant to the exporter. The Tribunal also highlighted that the time of importation should not lead to an arbitrary enhancement of value, especially when the payment was genuine and there was no dispute about it.

Confiscation of goods:
The show cause notice issued to the appellants proposed the enhancement of value, confiscation of goods, and imposition of a penalty. The Commissioner's order enhanced the value, confiscated the goods, and imposed a redemption fine and penalty. However, the Tribunal found that there was no misdeclaration regarding the quantity of goods, as the entire consignment's cost was paid to the foreign exporter based on the auction bid accepted by the Court. The Tribunal concluded that no grounds existed for confiscation or penalty based on the declared value of the consignment.

Imposition of penalty:
The Commissioner imposed a penalty under Section 112(a)(ii) of the Customs Act, 1962. The appellant argued that the penalty was unjustified as there was no misdeclaration regarding the quantity of goods. The Tribunal agreed with the appellant, emphasizing that the entire consignment's value was declared and paid for, and no penalty should be imposed based on the alleged excess quantity. Therefore, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.