2023 (4) TMI 267 - AT - Customs

Imported goods need license, redemption fine and penalty reduced on appeal.

M/s. Shri Shyam Sundar Textiles Pvt. Ltd. Versus Commissioner of Customs, Tuticorin

M/s. Shri Shyam Sundar Textiles Pvt. Ltd. Versus Commissioner of Customs, Tuticorin - TMI Issues:The issues involved in this case are misdeclaration of goods under Customs Tariff Heading (CTH), exemption claim under ISFTA Notification, requirement of import license from DGFT, re-determination of value of imported goods, confiscation of goods, imposition of penalty, and excessive redemption fine.Misdeclaration of Goods:The appellant, M/s. Shri Shyam Sundar Textiles Pvt. Ltd., filed two Bills of Entry for the clearance of 'Cotton Knitted Sorted Rags'. Customs officers found that the goods were mis-declared under CTH 60062200 instead of CTH 63109020. The appellant imported cotton knitted coloured rags without a valid import license from DGFT, contravening Customs Act, 1962. Notice was issued to the appellant for misdeclaration.Requirement of Import License:The original authority held that imported cutting waste/mutilated woven worn-out garments are restricted for import and not covered under Board Circular No. 20/2011-Cus. The goods were confiscated with an option to redeem them on payment of a fine. The appellant contested the requirement of an import license, stating that the goods did not fall under the restriction.Re-determination of Value:The original authority re-determined the value of the goods under Rule 5 of Customs Valuation Rules, 2007, as the declared value was considered very low. The appellant challenged this re-determination, stating that they were not provided with samples of similar goods or the basis for the revaluation.Confiscation and Penalty:The original authority imposed a penalty on the importer and confiscated the goods covered by both Bills of Entry. The lower appellate authority upheld this decision. The appellant appealed for the reversal of the re-determined assessable value, setting aside of confiscation, and reduction of fine and penalty.Judgment:The appellate tribunal found that the goods imported by the appellant required an import license from DGFT as they were classified as cutting waste/mutilated woven worn-out garments not suitable for use. The tribunal agreed with the re-determination of the value of the goods and upheld the impugned order on merits. However, the excessive redemption fine and penalty were modified to Rs 2,00,000 and Rs 1,00,000 respectively. The appeal was disposed of with the above modifications.