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2016 (3) TMI 294 - AT - CustomsClassification - Amezcua Chi Pendant - Whether goods imported is classifiable under Chapter Heading 71179090 as Imitation Jewellery or under Chapter Heading 70189090 as Articles of Glass - Held that:- the imported goods is a circular glass piece fitted with stainless steel bezel. It is an advanced mineral-based round glass made from high temperature "Nano-Engineered Glass" and it has positive energy field. By wearing this, it makes it a person balanced and harmonized and it neutralizes the negative effects of Electrosmog which is the result of Electromagnetic fields created by cell phones, microwave ovens etc. Also the primary function of the imported goods is not as artificial jewellery but sold to only through multi-level marketing on one-to-one basis. As, the 'Chi Pendant' is not an artificial jewellery worn by any person of any age. Therefore, the imported goods cannot be classified under Chapter 71 as Imitation Jewellery/Articles of Jewellery and differential duty of demanded on account of change of classification and rate of duty is upheld. Valuation - Rejection of transaction value declared and enhanced the same - Redetermination under Rule 9 of CVR, 2007 - Held that:- the imported goods is specialized articles of glass and cannot be compared with high value imported watches. The Product Launch Proposal Form (PLPF) of watches of the supplier is only intended for how the pricing should be done in the subsequent retail sale through multi-level marketing pattern but in the absence of PLPF for Amezcua Chi Pendant , the PLPF of Quranos watches and Retrograde watches cannot be adopted for determining the value under Rule 9. By relying on the decision of Hon'ble Supreme Court in Eicher Tractors Ltd. Vs CC [2000 (11) TMI 139 - SUPREME COURT OF INDIA] and CC Vs Ferodo India Pvt. Ltd [2008 (2) TMI 12 - Supreme Court], it is not the case of inclusion of royalty and knowhow but the enhancement of value under Rule 9 of CVR and the L.A has loaded the price by adopting the PLPF cost sheets of Quranos watches and La Retrograde watches. Therefore, declared value is accepted as transaction value and should not be enhanced under Rule 9 ibid. Also demand of differential duty on enhanced value is set aside. Confiscation - Misclassification of goods - Redemption fine - Held that:- imported goods required to be confiscated to the extent of misclassification of goods. Redemption fine to be reduced from ₹ 60,00,000/- to ₹ 5,00,000/- (Rupees Five lakhs only). Imposition of penalty - Held that:- penalty imposed on the appellant-company under Section 112(a) reduced from ₹ 30 lakhs to ₹ 7,00,000/- (Rupees Seven lakhs only). Penalty imposed on Shri Suresh Thimiri, CEO-Director reduced from ₹ 30 lakhs to ₹ 3,00,000/- (Rupees Three lakhs only). Penalty imposed under Section 114AA on both the appellants are set aside. - Decided partly in favour of appellant
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