Importer's excess value declaration due to supplier error not penalizable under Sections 111 and 112

CESTAT Ahmedabad allowed the appeal involving misdeclaration of goods value. The foreign supplier mistakenly sent three pieces of one machine and one piece of another instead of two pieces each. The importer unknowingly declared assessable value US$20,000 in excess due to supplier's error. CESTAT found no malafides by importer, following Bansal Industries precedent. Confiscation under Section 111, redemption fine, and penalty under Section 112 were set aside. Assessable value revision from US$39,000 to US$38,000 for one machine remained unchallenged by appellant.

---

---

Issues Involved: Appeal against demand of customs duty, rejection of declared value, penalty u/s 112(a), confiscation of goods, and imposition of redemption fine u/s 125 of Customs Act, 1962.

Issue 1 - Misdeclaration and Confiscation under Section 111(b):
The appellant ordered two different machines, but the foreign supplier mistakenly sent three pieces of one machine and one piece of the other. The appellant had no knowledge of this mistake and declared an assessable value higher than the actual value received due to the supplier's error. Citing precedent cases, it was argued that there was no deliberate intention to breach the law. The Tribunal found no malafides on the part of the importer and set aside the confiscation of goods and penalty under Section 112.

Issue 2 - Revision of Assessable Value:
The foreign supplier admitted the mistake and offered compensation of US$1,000 for the extra machine sent. The appellant sought to clear the third machine at an assessable value of US$38,000. The Tribunal noted that the appellant did not challenge this revision in their appeal, and as it was not disputed, the revision from US$39,000 to US$38,000 was accepted.

In conclusion, the appeal was allowed, and the confiscation of goods, redemption fine, and penalty under Section 112 were set aside due to the lack of deliberate misdeclaration by the importer. The revision of the assessable value for one machine was accepted as uncontested by the appellant.

---