TaxTMI 
TaxTMI 
2023 (4) TMI 509
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....t Rs. 1,25,92,800/- (Rupees One Crore Twenty Five Lakh Ninety Two Thousand Eight Hundred only) on the basis of Rs. 110 per Kg. vide Bill of Entry No. 8200903 dated 08.04.2022 under Section 111(d), 111(f) and 111(m) of the Customs Act, 1962. (2.) I order for confiscation of 25.28 Metric Tonnes of Linear Low-Density Polyethylene valued at Rs. 17,95,536/- (Rupees Seventeen Lakh Ninety Five Thousand Five Hundred and Thirty Six only) under Section 119 of the Customs Act, 1962. However, I give an option to the importer to redeem the goods. i.e. 25.28 Metric Tonnes of Linear Low-Density Polyethylene valued at Rs. 17,95,536/- (Rupees Seventeen Lakh Ninety Five Thousand Five Hundred and Thirty Six only) on payment of redemption fine of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand only) under Section 125 of the Customs Act, 1962. The Customs duty as self-assessed in the Bill of Entry No. 8200903 dated 08.04.2022 shall be paid for 25.28 Metric Tonnes of Linear Low-Density Polyethylene. (3.) I impose a penalty of Rs. 10,00,000/- (Rupees Ten Lakh only) under Section 112 of the Customs Act, 1962 on the Importer M/s Salasar Impex, 822/1, Nanak Pio Colony, GT Karnal Road, Mukhe....
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.... gathered information that five containers were lying uncleared at ICD Tughlakabad for a long time and no bill of entry was filed and the goods in the containers could have been mis-declared in terms of quantity and value. They placed an alert about the consignment in the Customs Electronic Date Interchange [EDI] system on 7.4.2022. The next day, i.e., on 8.4.2022 the appellant filed a Bill of Entry declaring the imported goods as 'areca nuts' and linear low density polyethylene [LLDP]. On examination, the goods were found as per the declaration in the Bill of Entry and the invoice. 5. As per notification no. 20/2015-20 issued by the Ministry of Commerce under the Foreign Trade (Development and Regulation) Act, 1992, import of areca nuts is free if the CIF value is Rs. 251 per kg or more and it is prohibited if the CIF value is less than Rs. 251/- per kg. The declared CIF value in the Bill of Entry was Rs. 251/- per kg and if this value is considered, the import of the areca nuts is free. Suspecting the areca nuts to be overvalued so as to avoid the prohibition on imports, the officers conducted a market enquiry and determined the market price of the imported areca nuts in India....
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....d have been upheld. e) The appellate authority relied on the judgment of the Supreme Court in Rajgrow Impex LLP & Others [2021(6) TMI 778-SC] in which the Supreme Court held that though the goods cannot be allowed entry into the country and were liable for confiscation, however, if the importer opts, re-export of the same can be permitted on payment of redemption fine, penalty and other dues. Once the confiscation has been upheld, the property of the goods vests in the Central Government as per section 126 and hence they cannot be allowed to be redeemed for re-export. 10. There is no cross appeal by the appellant. 11. Thus, the contention of the Revenue in this appeal is that the areca nuts were correctly confiscated absolutely by the adjudicating authority and therefore, they should not have been allowed to be redeemed for re-export by the Commissioner (Appeals) in the impugned order. We now proceed to examine the relevant legal provisions, submissions on both sides and how the legal provisions apply to the case on hand. Confiscation of the areca nuts and their redemption allowed by the impugned order 12. Section 111 provides for confiscation of goods of vario....
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....d that the areca nuts were prohibited and hence should have been absolutely confiscated, it becomes necessary to examine if the goods were prohibited at all. It is also the prayer of the Revenue to take decision in the light of its submissions and the facts of the case. Therefore, we proceed to examine the facts of the case also. The original authority confiscated the goods under section 111(d) for the reason that the value of the areca nuts, based on their market survey was only Rs. 110/- per kg and if this is reckoned as the CIF value, import of the areca nuts was prohibited. It is undisputed that if the CIF value as declared in the Bill of Entry is considered, the import of areca nuts is not prohibited at all. 16. The original authority also found that the areca nuts were liable for confiscation under section 111(f) as they were not mentioned in the import general manifest or the Bill of Lading. He also found that they were liable for confiscation under section 111(m). 17. The original authority re-determined the CIF value based on the market price of the imported areca nuts in the domestic market. Reckoning this as the CIF, he concluded that import of the areca nuts is pr....
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.... the time and place of importation; and (b) the buyer and seller are not related; and (c) the price is the sole consideration for sale; and (d) subject to some other conditions specified in the Rules 20. The expression 'for delivery at the time and place of importation' evidently means the CIF value plus the cost incurred in offloading the goods from the ship to the port (which is commonly known as landing charges). There are, however, situations, in which the 'transaction value' can be rejected by the proper officer and then the value to determine the customs duty can be done as per the Customs Valuation (Determination of value of Imported goods) Rules, 2007 [Valuation Rules]. Rule 12 of the Valuation Rules deals with the rejection of the declared value and it reads as follows. Rule 12. Rejection of declared value . - (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of su....
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....more of the parties thereto, but not at the option of the other or others, is a voidable contract; (j) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable 22. When goods are imported, the transaction value is the consideration paid or to be paid by the importer to the exporter for the goods supplied. Thus, the rights and liabilities of the two parties are decided by the transaction value. An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate [Explanation 2 to Section 25 of Indian Contract Act]. Even if the consideration is inadequate (say, one Kg. of areca nuts for Rs. 251/-), the rights and liabilities of the parties would still be as per the contract. If the CIF (or any other form) transaction value is altered, it changes the rights and liabilities between the parties and no stranger to the contract (i.e. someone who is not a party to it) including the 'proper officer' under the Customs Act has any locus standi to change the rights and liabilities of the parties. It is for this reason, that Rule 12 of the Valuation Rules gives the officer the power to reje....
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....sections 111(f) and (m) are concerned, these are not on account of the goods being prohibited goods. Confiscation of the LLDPE granules under section 119 by the adjudicating authority which is set aside by the impugned order 28. It is not in dispute that the LLDPE granules were declared in the Bill of Entry. It is also not in dispute that they were also mentioned in the IGM. The case of Revenue is that the appellant attempted to smuggle the areca nuts because they were not mentioned in the IGM and the LLDPE granules were used to conceal the areca nuts and hence the LLDPE granules were liable to confiscation under section 119 and the confiscation has been wrongly set aside in the impugned order. Section 119 reads as follows: Section 119. Confiscation of goods used for concealing smuggled goods. - Any goods used for concealing smuggled goods shall also be liable to confiscation. Explanation . - In this section, "goods" does not include a conveyance used as a means of transport. 29. It is a matter of record that both the areca nuts and the LLDPE granules were mentioned in the Bill of Entry and the goods were found as per the description. The IGM (which is fi....
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....e Collector of Customs when acting under Section 167 obviously acting in a quasi-judicial capacity. When discretion is vested in such a quasi-judicial tribunal, such discretion must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call for the drastic punishment of confiscation. If there was a case in which discretion should have been exercised in favour of the importer, this was such a case..... 31. This decision was upheld by the Hon'ble Supreme Court [1992 (61) E.L.T. 173 (S.C.)]. Hon'ble Madras High Court also held so in SHA RIKABDOSS BHAVARLAL [2000 (125) E.L.T. 65 (Mad.)]. Therefore, even if the LLDPE granules were used to conceal the smuggled goods, the adjudicating authority and the appellate authority need to exercise their discretion to see if they should be confiscated. In our considered view, in the f actual matrix of this case, the Commissioner (Appeals) has correctly set aside the confiscation of the LLDPE granules under section 119. Setting aside of penalty under section 114AA and reduction of penalty under section 112 to Rs. 2.5 lakhs 32. Section 114AA reads as follows: ....
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....be twenty-five per cent. of the penalty so determined;] (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest. 34. The reasons why the original authority imposed penalty under section 112 are as follows: "13. Thus, as discussed in the foregoing paras, it is clear that the importer has mis-declared the va....