Declared value of deteriorated imports cannot be rejected when clearance is declined and Section 23(2) applies.

Deterioration of imported goods and the importer's refusal to clear them meant the declared price could not be rejected without justification, especially where the importer asked the authorities to deal with the goods as deemed fit. On those facts, Section 23(2) of the Customs Act, 1962 was attracted, and the later offer to take the goods at a reduced price did not by itself support revaluation. Confiscation and penalty were also unsustainable because the basis for penal action failed once the declared value was accepted and no manipulation was shown. The customs orders were annulled.

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Issues: Whether the declared price of the imported goods was liable to be rejected and the goods revalued; whether confiscation and penalty were justified in the facts of the case; whether Section 23(2) of the Customs Act, 1962 applied where the importer declined to clear deteriorated goods.

Issue (i): Whether the declared price of the imported goods was liable to be rejected and the goods revalued.

Analysis: The records showed that the original importer did not clear the consignments because of delay, deterioration in quality, and demurrage charges, and that the appellant later offered to take the goods at the reduced price. The order itself recorded deterioration of the goods, and the appellant had communicated that it did not want to clear the goods and requested the authorities to deal with them as deemed fit. In these circumstances, the declared price could not be ignored.

Conclusion: The rejection of the declared price and revaluation was not justified and the appellant succeeded on this issue.

Issue (ii): Whether confiscation and penalty were justified in the facts of the case.

Analysis: Once the declared value was accepted and the goods were treated as deteriorated goods in respect of which the importer had declined clearance, the basis for penal action did not survive. The appellant's letter attracted the operation of Section 23(2) of the Customs Act, 1962, and the circumstances did not support the inference of manipulation warranting penal consequences.

Conclusion: Confiscation and penalty were not justified and were set aside in favour of the appellant.

Final Conclusion: The appeal succeeded and the impugned customs orders were annulled, with the appellant obtaining complete relief.

Ratio Decidendi: Where imported goods have deteriorated and the importer declines clearance, a subsequent request to deal with the goods as deemed fit can attract Section 23(2) of the Customs Act, 1962, and the declared price cannot be rejected absent justification.

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