Gujarat High Court
Commissioner vs Marvel on 22 September, 2008
Author: K.A.Puj
Bench: K.A.Puj
Gujarat High Court Case Information System
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TAXAP/883/2007 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 883 of 2007
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COMMISSIONER
OF CUSTOMS - Appellant
Versus
MARVEL
METAL CORPORATION - Opponent
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Appearance
:
MS ARCHANA U AMIN for
Appellant.
NONE for
Opponent.
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CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
Date
: 22/09/2008
ORAL ORDER
(Per : HONOURABLE MR.JUSTICE K.A.PUJ) The Commissioner of Customs has filed this appeal under Section 130 of the Customs Act, 1962 proposing to formulate the following substantial question of law for determination and consideration of this Court :-
Whether in the facts and circumstances, the Tribunal was justified in holding that confiscation of goods under Section 111 (m) and imposition of penalty under Section 112 (a) of the Customs Act, 1962 upon the importer, the respondent herein, was neither justified nor warranted despite undisputedly there being misdeclaration and violation of the provisions of the Customs Act, 1962 ?
Whether, in the facts and circumstances of the case, when undisputedly there was misdeclaration and misdescription of the goods imported as mentioned in the bill of entry, was the Tribunal justified in setting aside the confiscation of goods and imposition of penalty despite there being violation of provisions of the Customs Act, 1962 ?
Whether the Tribunal is justified in holding that no confiscation of imported goods can be resorted to under Section 111 (d) and 111 (m) of the Customs Act, 1962 despite undisputed misdeclaration of the nature / description of goods and whether the Tribunal is justified in holding that confiscation can be resorted to under Section 111
(d) and 111 (m) of the Customs Act, 1962 only when there is misdescription as to the value of imported goods ?
Whether the Tribunal is justified in holding that confiscation under Sections 111 (d) and 111 (m) of the Customs Act, 1962 with respect to imported goods can be resorted only when there is misdescription as to the value and not in cases where there is misdescription as to the nature / description of the goods imported ?
The brief facts giving rise to the present appeal are that the respondent importer filed two Into bills of entry bearing No. F-16692 & 16791 dated 13.11.2002 and 14.11.2002 through their Custom House Agent, one M/s. Prime Forwarders, Gandhidham. The quantity sought to be cleared was 36.993 and 23.640 MT of Mix Metal Scrap mainly Irony Brass and the value that was declared was CIF value @ US$ 625 PMT and US$ 600 PMT respectively. The goods were examined 100% on the first check basis. During the course of examination of the goods, the goods were found to be Brass Scrap ?SHoney?? grade instead of Mixed Metal Scrap as declared by the importer. The declared goods were valued at US$ 625 PMT and 600 PMT respectively whereas the contemporary value for brass scrap ?SHoney?? grade was found to be at US$ 1028 CIF. In this view of the matter, show-cause notice was issued. Reply was given by the importer and thereafter, the matter was taken up for adjudication by the Commissioner of Customs and order was passed by the Commissioner of Customs on 16.12.2002 wherein he has taken the view that goods, in question, covered under bills are liable for confiscation for contravention of the provision under Section 111 (d) & 111 (m) of the Customs Act, 1962. He has, however, given an option to the importer to redeem the impugned goods on a fine of Rs.3 Lacs in lieu of confiscation in terms of the provisions of Section 125 of the Customs Act, 1962. He has also enhanced the value of the impugned goods under Section 125 (2) of the Customs Act to 1028 US$ per MT CIF and he has also imposed penalty of Rs.3 Lacs on the respondent under Section 112 (a) of the Customs Act, 1962.
Being aggrieved by the said order of the Commissioner of Customs, the importer has filed an appeal before the Customs Excise & Service Tax Appellate Tribunal (CESTAT). The Tribunal vide its order dated 21.02.2007 allowed the said appeal in favour of the importer and held that confiscation of the goods or imposition of penalty upon the importer was neither justified nor warranted.
It is this order which is under challenge in the present Tax Appeal.
We have heard Ms. Archana Amin, learned Standing Counsel appearing for the appellant and perused the orders passed by the Commissioner of Customs as well as Tribunal. The Tribunal in its paragraph 2 & 3 of the order has specifically dealt with the issue. It is observed therein that the importer imported goods described as ?SMixed Metal Scrap??. However, the department held the same to be brass scrap ?SHoney Grade?? and consequently, they have treated the same as misdeclaration and undervaluation. The respondent importer has classified the goods under chapter heading Np.7404.00 of Custom Tariff and also claimed the value of the brass scrap for assessment purpose under Notification No.52/2002 dated 16.08.2002 which has fixed the tariff value at the rate of 1028 US$ per MT. It is the say of the importer that merely because there were traces of zinc and iron found with the scrap, the same cannot be held to be ?SHoney Grade??. Since the value for assessment was according to the tariff value, there was no intention to evade any customs duty. After considering the submissions made on behalf of the rival parties, the Tribunal has come to the conclusion that there was no evidence to prove that the value declared by the importer is a manipulated one. The Tribunal has also held that the respondent importer has claimed valuation for assessment purpose as per tariff value under Notification No. 52/2002 dated 16.08.2002. The Tribunal has also followed several orders passed by it earlier in identical situation and ultimately, the Tribunal took the view that the duty demand does not get affected by declaration of grade of brass.
Since the Tribunal has given the finding of fact and taken the view that confiscation of the goods or imposition of penalty upon the importer was neither justified nor warranted, we are of the view that no question of law, much less, any substantial question of law arises out of the order of the Tribunal.
The appeal is accordingly dismissed.
Sd/-
[K. A. PUJ, J.] Sd/-
[RAJESH H. SHUKLA, J.] Savariya Top