2003 (6) TMI 31 - AT - Customs

Redemption fine - Valuation (Customs) - import of rough semi-precious stones - W hether authorities can direct confiscation of goods and payment of fine u/s 125 of the Customs Act along with allowing re-export of goods was referred to the Larger Bench due to conflicting views in previous Tribunal decisions - HELD THAT - The provisions of section 125 are equally apply to the goods to be exported as well as imported goods. Where the goods which have been tendered for export are ordered to be confiscated and an option to redeem the goods on payment of fine it would follow that option is for the export of the goods. This is no doubt different from re-export. Re-export is a facility permitting export of goods which have already been permitted to be imported. Except in cases where import is prohibited by any law those goods which have been imported may be permitted to be exported. The formal procedure of filing a shipping bill and observing other formalities relating to export of goods would have to be followed. There is no prohibition on the adjudicating authority from permitting re-export of the goods. When an adjudicating authority after ordering confiscation of imported goods permits their re-export he is in effect first ordering the redemption of the goods on payment of fine and thereafter permitting them to be re-exported. Each of these two actions is independent and is permitted by law. An order whereby both are combined therefore is not contrary to law. We find that in reply to the show cause notice in para 5 the appellants specifically mentioned that supplier M/s. Lee Gems Jewellery Hongkong vide letter dated 15-3-2000 had agreed to supply the goods in question at a negotiated price. The appellants also produced a copy of the letter before the adjudicating authority. The appellants also produced copy of the letter dated 13-2-2002 where the supplier quoted the higher price which on negotiation was reduced. This evidence produced by the appellants is not taken into consideration while passing the impugned order by the learned Commissioner. The adjudicating authority in the impugned order held that the value declared by the Trade Panel Members appears to be an appropriate against the declared value. We find that the learned Commissioner also held that the appellants failed to produce any documentary evidence in support of the transaction value in spite of the fact that the letters from the exporters were produced before him along with the reply to the show cause notice. In these circumstances we find that the goods were imported at a negotiated price and the value was declared which was duly supported by the evidence by way of correspondence between the appellants and the exporters. Therefore the allegation of misdeclaration in terms of value is not sustainable. Hence the impugned order is set aside and the appeal is allowed.

Summary

Issues involved:
The issue of whether authorities can direct confiscation of goods and payment of fine under Section 125 of the Customs Act, along with allowing re-export of goods, was referred to the Larger Bench due to conflicting views in previous Tribunal decisions.

Decision on the first issue:
The appellants argued that the adjudicating authority cannot confiscate goods, impose redemption fine, and allow re-export, citing the Supreme Court decision in Siemens Limited v. Collector of Customs. However, the Tribunal found that the authority can permit re-export after confiscation and redemption, as seen in various High Court decisions.

The Revenue contended that Section 125 of the Customs Act empowers authorities to impose fine in lieu of confiscation for prohibited goods, supporting their argument with Tribunal decisions. The Tribunal clarified that the authority can order redemption and re-export separately, as each action is permitted by law.

Viewing the issue from another angle, the Tribunal emphasized that allowing re-export does not negate the authority's power to impose redemption fine, as seen in the Supreme Court case of C.C. v. Elephanta Oil & Industries Ltd. The Larger Bench answered the question accordingly.

Decision on the second issue:
In a specific case, the appellants imported rough semi-precious stones, declaring a value higher than assessed by the Revenue. The goods were ordered to be confiscated, with an option for redemption and re-export. The appellants provided evidence of negotiated prices, which the adjudicating authority did not consider, leading to the Tribunal setting aside the order and allowing the appeal.