Misdeclaration of imported engines justified confiscation, alternative valuation, and firm penalty, but personal penalty lacked evidence.

Imported second-hand diesel engines without the required licence and with undisclosed fittings were treated as misdeclared goods, supporting confiscation under the Customs Act. Because the invoice covered only the engines and did not reflect the additional equipment actually imported, the declared invoice value was rejected and the assessable value was upheld on reasonable alternative material. Penalty on the importing firm was sustained, together with the redemption fine, as the offence was established. The individual director's personal penalty was set aside because the record did not sufficiently show her specific role or a proper evidentiary basis for individual culpability.

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Issues: (i) Whether the imported used diesel engines were liable to confiscation for want of import licence and misdeclaration of description and value. (ii) Whether the assessable value could be fixed by discarding the invoice value and applying the valuation rules on the available material. (iii) Whether the penalties imposed on the importing firm and on the individual director were sustainable.

Issue (i): Whether the imported used diesel engines were liable to confiscation for want of import licence and misdeclaration of description and value.

Analysis: The import licence requirement for second-hand machinery was admitted and the goods were imported without such licence. The declaration in the Bill of Entry did not disclose the additional fittings found on examination, including gear boxes, alternators and compressors, and the omission amounted to misdeclaration of description. Since the goods imported were not the same as those declared, the declared value also could not be accepted as the correct value for the consignment.

Conclusion: Confiscation under Section 111(d) of the Customs Act, 1962 was justified, and the finding of misdeclaration was sustained.

Issue (ii): Whether the assessable value could be fixed by discarding the invoice value and applying the valuation rules on the available material.

Analysis: The invoice covered only used diesel engines and did not reflect the value of the additional fittings actually imported. The relied upon past import instances did not relate to goods with the same fittings and therefore did not furnish reliable contemporaneous comparables. In the setting of misdeclaration, the invoice value did not reflect the true transaction value, and the method adopted by the Collector for valuation was found reasonable.

Conclusion: The assessable value determined by the Collector was upheld.

Issue (iii): Whether the penalties imposed on the importing firm and on the individual director were sustainable.

Analysis: The offence was established, so the penalty on the firm and the redemption fine were warranted. However, the record did not disclose adequate material showing the role of the individual director or that the basis for penalising her had been properly brought out at the hearing or in the adjudication order.

Conclusion: The penalty on the firm was sustained, but the penalty on the individual director was set aside.

Final Conclusion: The order of confiscation, valuation and the firm's penalty was affirmed, while the personal penalty on the individual director was deleted, resulting in only partial relief to the appellants.

Ratio Decidendi: Where imported goods are misdeclared in description and the declared invoice does not cover the goods actually imported, the invoice value may be discarded for valuation and the assessable value may be determined on reasonable alternative material; penalties, however, must be supported by specific material showing individual culpability.

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