2018 (11) TMI 625 - AT - Customs

Remand of matter for proper valuation of the goods for determination of fine and penalties - imports of 26 consignments of old and used garments which were declared as pre-mutilated and fumigated - Held that - The failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so - the confiscation of the goods under section 111(d) of Customs Act, 1962 is upheld - the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5% - appeal allowed in part.

Issues involved:
1. Validity of market survey conducted in 2007 for determining margin of profit in goods imported in 1996.
2. Legality of ascertainment of assessable value through market survey not provided for in Customs Valuation Rules.
3. Invocation of section 111(m) of Customs Act, 1962 for goods not corresponding with the entry.
4. Confiscation under section 111(d) for import of garments without required license.
5. Compliance with remand order directing disclosure of margin of profit.
6. Questioning margin of profit and validity of market survey.
7. Compliance with licensing requirements.

Analysis:

1. The judgment concerns nine appeals with identical issues arising from an order-in-original passed by the Commissioner of Customs. The dispute had been remanded previously for proper valuation of goods and notification of the margin of profit. Shri Anil Balani represented some appellants, challenging the imports of garments declared as 'pre-mutilated and fumigated.' The goods were found to be liable for confiscation and fines based on a market survey conducted in 2007.

2. The appellants contested the validity of the market survey conducted in 2007 and the legality of determining the assessable value through a market survey not provided for in the Customs Valuation Rules. The authority argued that compliance with valuation rules was not necessary as the proceedings aimed to ascertain redemption fines and penalties, not duty liability.

3. The judgment analyzed the invocation of section 111(m) of the Customs Act, 1962, for goods not corresponding with the entry. It noted that confiscation under section 111(d) was justified for importing garments without the required license under the Foreign Trade Policy.

4. The Tribunal found that proceedings initiated before the filing of bills of entry did not align with the confiscation under section 111(m) requirements. It emphasized that confiscation under section 111(d) for importing garments without a license was valid, and the redemption fine should not exceed the market price of goods.

5. The Tribunal highlighted the failure of the original authority to disclose the margin of profit as directed in the remand order. Despite questioning the margin of profit and the market survey's validity, the appellants did not resist the ascertained value.

6. Due to the lack of evidence and limited scope for further ascertainment, the Tribunal upheld the confiscation under section 111(d) but reduced the redemption fine and penalty percentages to serve the ends of justice. The judgment concluded by disposing of the appeals with the revised penalties.

This detailed analysis covers the issues involved in the legal judgment comprehensively, addressing each point raised in the case.

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