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2004 (1) TMI 510 - AT - Customs

Issues:
1. Misdeclaration of value in the Bill of Entry regarding the machine and software.
2. Imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962.

Issue 1: Misdeclaration of value in the Bill of Entry regarding the machine and software:
The appeal was directed against an Order-in-Original that held the machine was supplied with embedded software, leading to a misdeclaration of value. The Commissioner observed that the machine's price was split into Printer and Software components to enable duty-free clearance. The appellants argued that they declared the entire value inclusive of Software in the Bill of Entry, with no attempt to exclude the Software value. While the foreign supplier provided a split-up invoice, the appellants did not claim this split-up value. The Commissioner demanded duty, imposed a redemption fine of Rs. 13,00,000, and a penalty of Rs. 2,00,000 under Section 112(a) of the Customs Act, 1962.

Issue 2: Imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962:
During the appeal hearing, the appellants' representative highlighted that the Software value was shown as NIL in the relevant document, with the machinery value declared as US $ 292,500. The Revenue representative had no further arguments upon reviewing the Bill of Entry and related documents. The Tribunal, after examining the case details and documents, noted that no value was declared specifically for the software. Consequently, the Tribunal found no justification for ordering confiscation of goods or imposing fines and penalties based on misdeclaration. Thus, the appeal was allowed, granting consequential relief to the appellants.

This detailed analysis of the legal judgment from the Appellate Tribunal CESTAT, Bangalore, highlights the issues of misdeclaration of value in the Bill of Entry regarding the machine and software, as well as the imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962. The Tribunal's decision focused on the lack of specific software value declaration, leading to the allowance of the appeal and relief for the appellants.

 

 

 

 

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