2022 (2) TMI 367 - AT - Customs

Valuation of imported goods - Old and used digital multifunctional devices with standard acc. and attachments xerox - restricted goods or not - prohibited goods or not - goods were allowed to be imported under valid authorization which the appellant has failed to produce - HELD THAT - The issue Whether the said goods are prohibited or not?, the said issue has been examined by the Hon ble Apex Court in the case of COMMISSIONER OF CUSTOMS VERSUS M/S. ATUL AUTOMATIONS PVT. LTD., AND PARAG DOMESTIC APPLIANCES 2019 (1) TMI 1324 - SUPREME COURT wherein the Hon ble Apex court observed The MFDs were not prohibited but restricted items for import. A harmonious reading of the statutory provisions of the Foreign Trade Act and Section 125 of the Customs Act will therefore not detract from the redemption of such restricted goods imported without authorisation upon payment of the market value. The Foreign Trade Act and the Section 125 of the Customs Act does not make any bar from redemption of such restricted goods imported without authorization on payment of duty on retail market value and there is distinction between what is prohibited and what is restricted. In those circumstances, the goods cannot be held absolutely confiscated or cannot be restricted for clearance for home consumption, hence, the imported goods are allowed to be cleared for home consumption on payment of redemption fine and penalty. The adjudicating authority are directed to release the goods to the appellant on payment of duty on enhanced value at ₹ 17,35,647/- and on payment of redemption fine of ₹ 50,000/- and a penalty of ₹ 20,000 under Section 112A of the Customs Act during the pendency of the issue of valuation. Appeal allowed by way of remand.

Summary

Issues:
1. Import of goods without valid authorization under Foreign Trade Policy.
2. Confiscation of goods and imposition of penalties.
3. Classification of goods as prohibited or restricted for import.
4. Valuation of imported goods pending adjudication.

Issue 1: Import of goods without valid authorization under Foreign Trade Policy
The appellant imported a consignment of digital multifunctional devices without producing a valid authorization, as required by the Foreign Trade Policy. The goods were allowed to be imported under valid authorization, which the appellant failed to produce. Due to the appellant's habitual import of such goods without proper authorization, the goods were deemed prohibited. The assessable value of the goods was re-determined, and the goods were held liable for confiscation. An option was given for re-export on payment of redemption fine and penalties under relevant sections. The appellant challenged this order.

Issue 2: Confiscation of goods and imposition of penalties
The appellant's counsel argued that in previous cases, similar goods were allowed to be cleared after payment of redemption fine and penalty. The appellant disputed the enhancement of the imported goods' value. However, the authorized representative emphasized the appellant's habitual offense of importing goods without proper authorization, leading to the classification of goods as prohibited. After hearing both parties, the tribunal considered the submissions and examined whether the goods were prohibited or restricted for import.

Issue 3: Classification of goods as prohibited or restricted for import
The tribunal referred to a Supreme Court case where it was clarified that the imported goods were not prohibited but restricted items for import. The Foreign Trade Act and the Customs Act allowed redemption of such restricted goods imported without authorization on payment of duty on market value. The distinction between prohibited and restricted goods was highlighted, leading to the decision that the imported goods could be cleared for home consumption on payment of redemption fine and penalty. The tribunal directed the release of goods to the appellant on specified conditions pending the decision on valuation.

Issue 4: Valuation of imported goods pending adjudication
The tribunal kept the issue of valuation pending adjudication, awaiting the decision of the Hon'ble Apex Court in the appellant's earlier case. The adjudicating authority was directed to release the goods to the appellant on payment of duty on the enhanced value, redemption fine, and penalty during the pendency of the valuation issue. The appeal was disposed of by way of remand with specific terms outlined for the release of goods.

This judgment involved issues related to the import of goods without proper authorization, confiscation of goods, classification of goods as prohibited or restricted, and the valuation of imported goods. The tribunal clarified the distinction between prohibited and restricted goods, allowing the imported goods to be cleared for home consumption on payment of specified fines and penalties. The decision was based on legal provisions under the Foreign Trade Act and the Customs Act, ensuring compliance with regulations governing imports.