TaxTMI 
TaxTMI 
2026 (2) TMI 917
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.... Rs. 3,00,000/- to Rs. 2,17,980/- (10% of value of goods in Table D of OIO) under Section 125 of the Customs Act, 1962. (ii) that goods mentioned at Sr. No. 6 and 7 of Table-E of the OIO are not liable to absolute confiscation and thus allowed to be released without imposition of penalty. (iii) that goods mentioned at Sr. No. 4 of Table-E of the OIO are liable to absolute confiscation alongwith penalty of Rs. 837.50/- under Section 112(a)(i) of the Customs Act, 1962." 3. The appellant is a technology powered logistics company providing end-to-end logistics solutions to various customers globally. The appellant imports spares for warranty replacement under delivered duty paid items. It imports the warranty parts only for specified dedicated end customers. The imported items are controlled by the US Government and authorised for export only to the country of ultimate destination for use by the ultimate consignee and end users identified by the exporters - suppliers. 4. According to the appellant, the imported goods are exclusively imported for 'replacement' purposes to the ultimate identified customers. Thus, the imported goods cannot be sold/resold, transferr....
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.... attracting basic customs duty @ 0% and IGST @18% instead of what was declared by the appellant, though, there was no variation in the rate of basic customs duty and IGST. The Deputy Commissioner also found that as these goods were mis-declared in terms of quantity, value and description they would be liable to confiscation under section 111(m) of the Customs Act. 10. In respect of 'Power Supply' which are at serial numbers 4, 6, 7, 11 and 12 of the aforesaid chart, the Deputy Commissioner found that for three items mentioned at serial numbers 4, 6 and 7 of the aforesaid chart, the importer was not in possession of a valid BIS certificate and the validity of the license had also expired on 30.03.2023. In respect of these three items, the Deputy Commissioner found that they were liable for absolute confiscation under section 111(d) of the Customs Act 1962 [the Customs Act] as the goods became prohibited due to non-availability of BIS license. 11. The Deputy Commissioner also found that the appellant was liable for penal action under section 112(a)(i) of the Customs Act. 12. Accordingly, the following order was passed by the Deputy Commissioner: "ORDER 6. I rejec....
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....mponent. It is this erroneous calculation of pieces that led to the increase of the quantity and consequent charge leading to mis-declaration; (ii) Regarding misclassification, the learned counsel for the appellant submitted that there is no change in the rate of duty and it remains neutral. Thus, the charge of mis-declaration does not have any meaning and impact on the revenue; and (iii) Regarding absolute confiscation of one 'Power Supply' item on the ground that it was prohibited as the appellant failed to produce the necessary BIS license, learned counsel submitted that there was no necessity of providing the BIS license in respect of spare parts. 15. Shri Rakesh Kumar, learned authorised representative appearing for the department, however, supported the impugned order and submitted that it does not call for any interference in this appeal. In this connection, the learned authorised representative submitted that: (i) The importer had earlier admitted valuation mistake in respect of 'Memory' and, therefore, the letter submitted by the supplier is unreliable; (ii) Mis-declaration is punishable even if it is duty neutral as even an attempt t....
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....partment alleges that there are 16 items instead of 2 items declared by the appellant. 21. The appellant in the reply had contended that there was a calculation error on the part of the Chartered Engineer in calculating the number of items and this is sought to be explained by stating that the Chartered Engineer had erroneously counted number of pieces without realising that certain number of pieces form only one component. This has been explained by the appellant from the communication sent by the global logistics manager of EXAGRID which is reproduced below: "EXAGRID We are addressing the issue of valuation/over-shipment concerns of Choice ticket ZAA605R7. Parts listed below currently reflect a quantity issue, however, their component pieces were counted as separate parts, and added value incorrectly. The correct quantities on the initial invoice are correct. Example the costs listed on the commercial invoice for 1 box with 4 memory components is correct for the full combined costs of all 4 components. The parts are our memory modules. They are packed in one box, however the parts are comprised of multiple memory sticks. Photo examples are attache....
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....arding quantification of the 'Memory' imported by the appellant on the basis of the communication sent by the supplier. The said communication clearly shows how errors had crept in and if the errors are accepted then there would be no difference in the quantity of 'Memory' imported by the appellant. The Commissioner (Appeals) failed to examine this issue and, therefore, committed an error in holding that there was a misdeclaration regarding the quantity of goods imported by the appellant. 24. Thus, the order passed by the Commissioner (Appeals) upholding the order passed by the Deputy Commissioner, rejecting the value of the 'Memory' imported by the appellant and confirming the demand of duty with interest deserves to be set aside. The confiscation of goods with option to pay redemption fine is also set aside. Power Supply 25. The next issue that arises for consideration is with regard to 'Power Supply'. It is only with regard to one 'Power Supply' at serial number 4, that the Commissioner (Appeals) has held that it is liable to absolute confiscation with penalty of Rs. 837.50/- under section 112 (a)(i) of the Customs Act. This is for the reason that the contention of the ....