DONG-A INDIA AUTOMOTIVE PVT. LTD. Vs. CC

JUDGEMENT

(1.) THERE are two applications before me, both filed by the appellants, one for waiver of predeposit and stay of recovery in respect of the duty and penalty amounts and the other seeking early disposal of the appeal. After examining the records and hearing both sides, I am of the view that the appeal itself requires to be disposed of finally at this stage. Accordingly, after dispensing with predeposit and allowing the application for early hearing, I proceed to deal with the appeal.

(2.) THE appellants imported "MIXING ROLL (18 INCHES)" from South Korea and filed a Bill of Entry on 22.3.2006 for its clearance, declaring its unit price as 69,000 USD. Assessment of the goods was made in terms of the declaration and the duty assessed was paid along with Extra Duty Deposit (EDD) to the extent of 1% of value, amounting to Rs. 31,000/ -. However, clearance was not allowed, as the correctness of the declared value was doubted. The goods was subjected to physical inspection by a Chartered Engineer of the Department's choice, who, after examining the goods, reported that the item was "used and reconditioned mixing roll" which could fetch a value of 72,000 USD (CIF). On the basis of this report, the assessable value of the goods was proposed to be enhanced. As the assessee waived show -cause notice, such assessment was made. Hence the differential demand of duty on the item imported by the appellants. Apart from this, the original authority ordered confiscation of the goods also, after finding that the goods had been mis -declared in the Bill of Entry. It imposed a fine of Rs. 8.00 lakhs in lieu of such confiscation, besides imposing a penalty of Rs. 8.00 lakhs on the importer. The present appeal is against this decision of the Commissioner of Customs.

(3.) AFTER considering the submissions of both sides, I am of the view that the order of confiscation of the goods in question is bad in law. This is not a case where the goods was mis -declared with intent to evade licensing provisions or to get over any other legal impediment. It was described as "mixing roll (18 INCHES)" in the Bill of Entry on the basis of the description found in the supplier's invoice. The Chartered Engineer found the goods to be used and reconditioned and to be further useable for a period of 15 years and on this basis he determined its value. The assessee has no objection to this enhancement of value and is prepared to pay duty on the enhanced value. The question now is whether the new -found description of the goods is of any significance to the valuation dispute. It is absolutely insignificant inasmuch as the dispute is what should be the correct value of the goods. The correct value is the one determined by the Commissioner and the same has not been challenged in this appeal. The value declared in the Bill of Entry was lower. Thus the imported item did not correspond in respect of the value, with the Bill of Entry and consequently Section 111(m) was attracted, according to learned Commissioner. Hence the order of confiscation of the goods. In this connection, learned Counsel has relied on the Tribunal's decision in Bansal Industries v. CC, Chennai 2004 (175) ELT 449 (Tri. Chennai), wherein it was held that the goods imported by the party were not liable to confiscation under Section 111(m) of the Customs Act as the Revenue failed to prove that mis -declaration of the goods and its value had been done consciously and knowingly. After a perusal of the cited judgment, I find that, in that case, the Revenue had not shown that the assessee had wil fully mis -declared the goods with intention to evade duty. Having found so, the Tribunal set aside the order of confiscation and redemption fine. The facts of the cited case are apparently similar to those of the instant case. The appellants had described the goods and declared its value as in the relevant invoice issued by the supplier. Hence they cannot be held to have mis -declared the description or value. I he tenor of the judgment cited by learned Counsel appears to be leading to the inference that, for confiscation of any goods under Section 111(m) of the Customs Act, there should be an element Of mens rea on the part of the importer in declaring its description and value. This element is lacking in the present case. Accordingly, the order of confiscation is not sustainable, and so is the order of penalty inasmuch as a penalty under Section 112 of the Act depends on the confiscability of goods under Section 111.