2023 (9) TMI 364 - AT - Customs

Valuation of imported goods - imported old and used worn clothing completely fumigated - restricted item or not - classified under Tariff Item No.63090000 or not - enhancement of value - confiscation - redemption fine - penalty - HELD THAT - This issue came up before this Tribunal in the case of VENUS TRADERS RAINBOW INTERNATIONAL AL-YASEEN ENTERPRISES GLOBE INTERNATIONAL KRISHNA EXPORT CORPORATION PRECISION IMPEX BMC SPINNERS PVT. LTD. SHIVAM TRADERS LEELA WOOLEN MILLS M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI 2018 (11) TMI 625 - CESTAT MUMBAI wherein this Tribunal has observed the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so. In the light of the admitted failure to comply with the licensing requirements we uphold the confiscation of the goods under Section 111(d) of Customs Act 1962. However it is our opinion that the ends of justice would be served by reducing the redemption fine to 10% of the ascertained value and penalty to 5%. The redemption fine and penalty as reduced by the Ld.Commissioner(Appeals) is sufficient to meet the end of justice - there are no infirmity in the impugned order and the same is sustained - appeal of Revenue dismissed.

Summary

Issues involved:
The issues involved in this case are the enhancement of redemption fine and penalty imposed on imported old and used worn clothing, the classification of the goods under Tariff Item No.63090000, and the applicability of Section 111(m) and Section 111(d) of the Customs Act, 1962.

Enhancement of Redemption Fine and Penalty:
The respondent imported old and used worn clothing, which were assessed after value enhancement, confiscation, and imposition of redemption fine and penalty. The declared value was increased from US$ 1.05 per kg to US$ 1.316 per kg, and a redemption fine of Rs.6,06,000/- and penalty of Rs.2,52,000/- were imposed. The Ld.Commissioner (Appeals) reduced the redemption fine to Rs.2,02,000/- and penalty to Rs.1,01,000, considering that the goods could not be confiscated on the charge of misdeclaration of value under Section 111(m) of the Customs Act, 1962. The reduction was based on the absence of evidence proving misdeclaration, leaving non-possession of a valid license as the only offense for confiscation under Section 111(d) of the Customs Act, 1962.

Applicability of Section 111(m) and Section 111(d) of the Customs Act, 1962:
The Tribunal referred to a previous case where it was observed that Section 111(m) should not be invoked when goods do not correspond in value with the entry made, and confiscation under Section 111(d) was justified for the import of old and serviceable garments without a required import license. The Tribunal upheld the confiscation of goods under Section 111(d) due to the lack of a valid license. The Tribunal also reduced the redemption fine to 10% of the ascertained value and penalty to 5%, based on 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.

Conclusion:
Based on the cited decision and the principles applied therein, the Tribunal found that the redemption fine and penalty as reduced by the Ld.Commissioner(Appeals) were sufficient to meet the ends of justice. Consequently, the impugned order was sustained, and the appeal filed by the Revenue was dismissed.