Accepted enhanced import value bars confiscation and penalty, while duty remains payable on the reassessed value.

Imported marble and mosaic were treated as compliant once the importer accepted enhancement of value to the notified minimum CIF price and cleared the goods on that basis. On that footing, confiscation could not be sustained, and the connected redemption fine and penalty were set aside. The valuation enhancement was, however, maintained for duty purposes, so the duty liability on the enhanced value remained undisturbed. The stated principle is that acceptance of reassessed value under the import policy and Customs Valuation Rules does not, by itself, justify penal action merely because the original declared value was below the policy threshold.

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Issues: (i) whether the imported marble and mosaic were liable to be treated as restricted goods, justifying confiscation, redemption fine and penalty; (ii) whether enhancement of value on the basis of the DGFT notifications and the consequential valuation adopted under the Customs Valuation Rules was sustainable.

Issue (i): Whether the imported marble and mosaic were liable to be treated as restricted goods, justifying confiscation, redemption fine and penalty.

Analysis: The import policy notifications fixed a minimum CIF value for free importability of the specified goods. On the facts, the importer had accepted enhancement of value to the notified minimum import price and had cleared the goods on that basis. In these circumstances, the goods could not be further treated as having been imported in violation of the policy so as to sustain confiscation and the ancillary consequence of redemption fine and penalty.

Conclusion: The goods were not liable to confiscation, and the redemption fine and penalty were not sustainable.

Issue (ii): Whether enhancement of value on the basis of the DGFT notifications and the consequential valuation adopted under the Customs Valuation Rules was sustainable.

Analysis: The enhanced value was accepted by the importer, and duty at that value had been paid. The Tribunal held that once the value had been so enhanced on the basis of the notified minimum import price, there was no legal basis to continue to treat the import as offending the customs and foreign trade regime for the purpose of confiscation and penal action. The duty demand at the enhanced value, however, remained undisturbed.

Conclusion: The valuation enhancement was sustained for duty purposes, but it did not justify confiscation, fine or penalty.

Final Conclusion: The appeal succeeded only to the extent of setting aside confiscation, redemption fine and penalty, while maintaining the duty liability on the enhanced value.

Ratio Decidendi: Where an importer accepts enhancement of value to the notified minimum import price and duty is assessed on that basis, confiscation and penal consequences cannot be sustained merely because the original declared value was below the policy threshold.

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