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2023 (4) TMI 509 - AT - CustomsAbsolute Confiscation of prohibited goods - areca nuts - redemption for re-export on payment of redemption fine of Rs. 2.5 lakhs being beyond the jurisdiction - rejection of transaction value - restoration of penalty under section 112 of the Customs Act, 1962 and also penalty under section 114AA of the Customs Act, 1962 - HELD THAT:- If the declared transaction value is rejected, valuation of the imported goods, (i.e., determining the value to calculate the duty payable) is to be done as per Valuation Rules 4 to 9 based on value of identical goods or value of similar goods, etc. Thus, while the proper officer can reject the transaction value and assess duty based on some other value determined as per the Valuation Rules, the transaction value- be it CIF, C&F, FOB- cannot be changed by him. It is the consideration to be paid by the buyer to the seller for the goods as per the contract (either explicit or implicit) between them. When goods are imported, the transaction value is the consideration paid or to be paid by the importer to the exporter for the goods supplied. Thus, the rights and liabilities of the two parties are decided by the transaction value. An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate - Rule 12 of the Valuation Rules gives the officer the power to reject the transaction value but not to change it. The officer can reject the transaction value and determine the assessable value of the goods under the Customs Act as per the Valuation Rules but he cannot change the transaction value. So far as the prohibition under the notification issued by the DGFT is concerned, it is based on the CIF value, i.e., the transaction value including the cost, freight and transit insurance. It is not based on the assessable value under the Customs Act. Therefore, so long as the CIF value is as per the DGFT Notification, import of the goods is not prohibited. Therefore, the areca nuts which were imported were not prohibited because the CIF value was not below the threshold. Confiscation of the LLDPE granules - HELD THAT:- The confiscation was correctly set aside by the Commissioner (Appeals). As far as the areca nuts are concerned, although their confiscation was not challenged, in view of the assertion of the Revenue that they were prohibited goods (and hence should not have been allowed to be redeemed on payment of fine), it is examined and held that they were not prohibited goods. Therefore, section 112(i) does not apply. There is nothing on record to show that any duty was sought to be evaded by the appellant on the areca nuts. Therefore, section 112(ii) also does not appear to apply. There are no reason to interfere with the impugned order of the Commissioner (Appeals) reducing the penalty under section 112 to Rs. 2.5 lakhs - appeal of Revenue rejected.
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