TaxTMI 
TaxTMI 
2022 (9) TMI 1131
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....ce [RSP]. 3. The importer imported goods declaring an RSP and accordingly, goods were assessed by the customs officers and cleared. Thereafter, on receiving intelligence, officers of Directorate of Revenue Intelligence [DRI] searched the warehouse of the importer and found loose labels which indicated much higher prices than those declared in the Customs documents and also found price lists indicating higher prices in the warehouse. Officers of DRI investigated the matter further and recorded statements of Shri P K Sood the Director of the importer on 1.03.2005, 22.03.2005, 09.05.2005, 05.05.2005 and 25.05.2005 and Shri S K Kohli, Manager on 21.02.2005 under Section 108 of the Customs Act, 1962 [Act] in which they confessed that the labels reflected the true RSP and lower prices were declared in the Customs documents to evade duty. Both had subsequently retracted their statements. The goods were seized by the officers of DRI and handed over to the importer under a Supurdnama for safe custody. Later, these were returned to the department. 4. A Show Cause Notice [SCN] dated 19.08.2005 was issued by the Additional Director General of DRI proposing to reject the declared RSP and ....
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....ption to redeem the goods has been given to the importer. However, the importer has not redeemed the goods. Since the goods have not been redeemed, the question of recovering duty or differential duty on the confiscated goods does not arise. 7. According to learned counsel duty has to be paid as per sub- section (2) of section 125 in addition to the redemption fine only if this option is exercised. Otherwise, the confiscated goods vest in the Central Government as per section 126 and consequently, any charge of duty on the goods shall also vest in the Central Government and not on the importer. He relies on the following case laws: (i) M/s B S N Joshi & Sons Limited vs. Nair Coal Services Limited [(2006) 11 SCC 548] (ii) Commissioner of Customs (Prev), Mumbai vs. Swastik Optical Co Pvt Ltd. [Appeal No. C/689/04 dated 20.08.2015] (iii) Hindustan Appliances vs. Commissioner of C. Ex. New Delhi [2002 SCC Online CEGAT 1736] (iv) Venus Stampings Pvt Ltd. vs. Commissioner of Central Excise Delhi IV [2022 (379) ELT 274 (SC)] (v) Northern Plastics vs. Commissioner of Central Excise [(1998) 6 SCC 443] (vi) Perfect Trading Compan....
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.... found elsewhere. A price list was also found corresponding to these labels. The mere fact that the goods had not yet been sent to the market makes no difference. The importer had declared a certain RSP before the Customs when, in fact, the RSP as found in the labels and the price lists recovered from the warehouse of the importer itself were much higher. When questioned, Shri P K Sood and Shri S K Kohli have both admitted that the price lists and the labels reflected the true prices. Therefore, rejection of the declared RSP and redetermination of duty as per the labels and the price lists and order of recovery of differential duty are correct and do not call for any interference. As far as the retractions of the statements are concerned, he submits that they were afterthoughts and do not explain the labels and price lists actually found. 13. He further submits that as the impugned goods did not correspond to the actual value (RSP), they were correctly confiscated under section 111(d) & 111(m) and were allowed to be redeemed on payment of fine which the importer had not opted for. Consequently, the penalties were correctly imposed. 14. We have considered the submissions on bo....
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.... in addition, be liable to any duty and charges payable in respect of such goods. (3) Where the fine imposed under sub-section (1) is not paid within a period of one hundred and twenty days from the date of option given thereunder, such option shall become void, unless an appeal against such order is pending. Explanation.-For removal of doubts, it is hereby declared that in cases where an order under sub-section (1) has been passed before the date on which the Finance Bill, 2018 receives the assent of the President and no appeal is pending against such order as on that date, the option under said sub-section may be exercised within a period of one hundred and twenty days from the date on which such assent is received. 126. On confiscation, property to vest in Central Government.-(1) When any goods are confiscated under this Act, such goods shall thereupon vest in the Central Government. (2) The officer adjudging confiscation shall take and hold possession of the confiscated goods." 16. The charge of duty of customs is on the goods imported into India as per Section 12 and NOT on the person who imported the goods. This section further lays down....
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....re lying with the custodian for over 30 days, as per section 48, the Custodian can, with approval of proper officer, sell the goods. In such a case, the sale proceeds shall be dealt with as per section 150, which, inter alia, says that the duty is to be recovered from the sale proceeds. It is not charged separately from the importer. The importer need not pay the duty. Section 48 reads as follows: " Section 48. Procedure in case of goods not cleared, warehoused, or transhipped within thirty days after unloading. - If any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped within thirty days from the date of the unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer be sold by the person having the custody thereof: Provided that - (a) animals, perishable goods and hazardous goods, may, with the permission of the proper officer, be sold at any time; (b) arms and ammunition may be sold at ....
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.... to pay the duties. 19. Therefore, the submission of the learned authorised representative that the duty has to be paid by the importer even if the goods are confiscated resulting in the title vesting with the Central Government and the importer is chargeable to duty is not correct. The charge under Section 12 is on the goods and not on the importer. When the title to the goods moves from the importer, the liability to pay duty moves along with it. If the importer relinquishes his title to the goods before clearance under section 28(2), he has no liability to pay duty. If the importer does not clear the goods and for that reason the goods are sold by the custodian under section 48, the duty is to be recovered from the sale proceeds as per section 150 and not from the importer. This has also been made clear by the Board in the Customs Manual. Similarly, if the goods are confiscated absolutely or the option of redemption has not been exercised by the importer, in terms of section 150, such goods must be sold and the duty has to be recovered from the sale proceeds. Thus, goods which are confiscated and which are not allowed to be redeemed or which have not been redeemed vest in the....
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....are two different things and the importer is bound to pay the duty whether or not he has opted to redeem them. We find that this judgment of High Court of Gujarat was passed without considering Fortis Hospital Ltd. judgment of Supreme Court. Respectfully following the law laid down by Supreme Court, we hold that if the confiscated goods are not redeemed, no duty is payable on them. 21. The next question is whether in the factual matrix of this case, the demand of differential duty and confiscation of the goods and imposition of penalties are sustainable. These issues are inter-linked and all stem from the premise that the RSP was mis-declared in the Bills of Entry. The basis for this finding in the impugned order that the RSP was mis- declared are as follows: a) Loose labels found in the warehouse; b) Price list found in the warehouse; and c) Statements of Shri P K Sood and Shri S K Kohli made before the officers under Section 108 of the Act. 22. The statements were retracted later. Section 138B of the Act explains the relevance of any statements made before officers of Customs under the Act. It reads as follows: " Section 138B. Relevancy o....