VED PRAKASH WADHWANI Vs. COMMISSIONER OF CUSTOMS, AHMEDABAD

JUDGEMENT

(1.) THE facts in brief are that on the basis of information, the Hdqrs. Preventive Branch of Customs Ahmedabad visited the Foreign Post Office, Ahmedabad and examined three parcels bearing Nos. AH/7/133412/03, AH/7/133422/03 and Ah/133425/03 imported by M/s. Prakash Impex, Ahmedabad. Two parcels were affixed with a consignment note showing the contents as electrical equipment and the third parcel was shown as as per invoice. The details regarding weight, no. of pieces and dimensions was left blank. The three parcels were opened and found to contain various models of Nokia brand and Samsung brand mobile phones. The department was of the view that since the value, description and nature of the goods were not declared properly, those were liable to confiscation under Section 111(m) of the Customs Act, 1962 (hereinafter called the Act). Therefore, pieces of various brands of mobile phones of foreign origin and 81 pieces of handsets and 53 pieces of CD of Nokia valued at Rs. 16,82,587/ - were seized under Section 110 of the Act. The seized goods were disposed off under Section 110(1A) as the appellant did not opt to get the goods provisionally released. An amount of Rs. 11,16,527/ - was realized. The appellant was served a show cause notice dated 16 -12 -2003 as to why the seized goods should not be confiscated under Section 111(f) and 111(m) of the Act and why penalty should not be imposed on him under Section 112 thereof.

(2.) AFTER adjudication and appellate proceedings, impugned order has been passed wherein Commissioner (Appeals) has upheld the confiscation of goods under Section 111(m) of Customs Act, 1962, has reduced the quantum of redemption fine to Rs. 50,000/ -, set aside the penalty on the appellant and ordered that duty liability may be re -calculated considering the exemption notification claimed by the appellant.

(3.) HEARD both the sides. Learned advocate on behalf of the appellants submits that in this case the confiscation under Section 111(m) was not correct. Appellants had not made any declaration and the labels or declaration accompanying the goods admittedly did not give sufficient details as regards the goods. Even before the appellant could submit details and without contacting the appellant the goods were seized and further proceedings were taken up. In fact the seizure took place on 25 -7 -2003 whereas the appellant had sent papers relating to the three parcels on 19 -7 -2003. However, this was intimated to the Superintendent of Customs FPO on 29 -7 -2003 only. Thereafter appellants obtained copy of seizure memo and applied for provisional release. Since the department required them to execute a bank guarantee for 25% of the value and they were willing to execute bank guarantee only for 25% of the duty, even though they had intimated to the department to this effect, the goods were disposed of subsequently. The learned advocate submits that in this case first of all there was no mis -declaration at all and based on incomplete declaration goods were seized. In fact incomplete declaration was also not made by the appellant. Therefore, he submits that the confiscation was not warranted and is required to be set aside. The second submission he makes is that once the confiscation is ordered and redemption fine is imposed, the department is duty bound to return the goods. In the absence of the goods, appellant cannot be compelled to pay fine in lieu of confiscation. It is also his submission that for the same reason appellant would not be liable to pay duty also. However, once goods are disposed of by the department and in view of the fact that Commissioner (Appeals) has not imposed any penalty on the appellant and also in view of the fact that confiscation under Section 111(m) was not warranted in this case, full amount realized by the department after confiscation is required to be refunded to the appellant. He also makes an alternative submission. The duty has been demanded and is proposed to be collected on the basis of value as per the seizure memo which was very high i.e. more than Rs. 16.6 lakhs. The invoices and documents produced by the appellant reflect the value at slightly more than 15.9 lakhs. However, the department has disposed of the goods at a much lower price of Rs. 11,16,527/ -. If his submissions regarding non liability to confiscation and request for release of amount realized unconditionally are not accepted, alternatively he submits that the value for the purpose of calculation of customs duty has to be the value realized by the department on disposal of the goods and this value has to be taken as cum duty price and on that basis duty liability is required to be calculated. He also relies upon the decision of the Tribunal in the case of Munjal Showa Ltd. v. Commr. of C. Ex., Faridabad reported in 2008 (227) E.L.T. 330 (Tri. - Del.) in support of his contention that where goods have been already cleared and disposed of, no redemption fine can be imposed. Learned DR on the other hand submits that the order passed by the Commissioner (Appeals) has discussed all the factors relating to confiscation under Section 111 (m) and he also has distinguished the case law cited before the learned Commissioner (Appeals) and therefore seeks that the order of the Commissioner (Appeals) may be upheld.