By TIOL News Service

MUMBAI, MAY 25, 2013: THE respondent imported polyester fabrics. The Revenue was of the view that the respondent has mis-declared the value. Accordingly, they conducted market enquiry to ascertain the value of the goods. On conclusion of the enquiry, notice was issued to the importer for enhancement of value, confiscation of the goods and imposing of penalty. The notice was adjudicated and the value was enhanced and the goods were confiscated under Section 111(m) of the Customs Act, 1962. The importer was allowed redemption of the goods on payment of fine of Rs. 5 lakhs for re-exporting the goods. A penalty of Rs. 1.5 lakhs was imposed under section 112(a) of the said act.

The Commissioner(A) held that confiscation under Section 111(m) of the Customs Act, 1962 is not sustainable and consequential redemption fine is also not applicable. He further directed the appellant to pay appropriate duty on the enhanced value as per the final assessment and held that the option for re-export remains with the appellant.

Revenue is aggrieved with this order and is in appeal before the CESTAT.

The Revenue representative submitted that the value was enhanced on the basis of market enquiry which revealed that the respondent had mis-declared the value and that this aspect was not considered by the Commissioner(A) while passing the impugned order.

The respondent submitted that the copy of the market enquiry was not provided to them when the case was adjudicated. It is further mentioned that they have executed a bond for an amount of Rs. 64,87,557/- and bank guarantee for Rs. 3,69,696/- and the same be considered sufficient for protecting the interest of the Revenue.

The Bench observed -

“6. The order passed by the lower appellate authority is contradictory in terms. On the one hand, the appellate authority records a finding that confiscation under Section 111(m) of the Customs Act is not sustainable and consequently redemption fine and penalty is not applicable. At the same time the appellate authority also gives a finding that the appellant has to pay appropriate duty as applicable on the enhanced value as per the final assessment.

6.1 Section 111(m) deals with mis-declaration of value or any other material particulars. If there is no mis-declaration, Section 111(m) is not applicable and consequently the question of payment of duty on enhanced value does not arise at all. Therefore, there is no application of mind by the appellate authority while passing this order. The appellate authority also given the option to the respondent herein to re-export the goods. Therefore the impugned order is not sustainable and accordingly set aside.”

Observing so, the Bench remanded the matter to the original adjudicating authority for fresh consideration and who was also directed to give a copy of the market enquiry report to the appellant so that they can test the veracity of the said report and make submissions.

In fine, the appeal was disposed of by way of remand and the stay application was also disposed of.

(See 2013-TIOL-784-CESTAT-MUM)