CESTAT upholds Confiscation of Electric Motors u/s 111(m) of Customs Act on ground of Absence of Proper Transaction Value [Read Order]

The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the confiscation of electric motors under section 111(m) of the Customs Act,1962 on the grounds of absence of proper transactional value. 

Javeria Impex India Pvt. Ltd, the appellant assessee was an importer and imported electric motors from China and filed two Bills of Entry the department alleged that the declared transactional value of goods was comparatively low. 

The assessee appealed against the order passed by the adjudicating authority for the confiscation of goods seized under section 110 of the Customs Act,1962 but they were later released provisionally on execution of bonds and bank guarantees. 

Vaibhav Singh, the counsel for the assessee contended that Section 111(m)of the Customs Act provides for confiscation of imported goods which do not correspond in value or any other particular to the entry made, and since the re-assessment itself was not sustainable, neither was the confiscation. 

Rakesh Kumar, the counsel for the department contended that confiscation was done correctly and the goods were correctly re-assessed, section 111(m) of the Customs Act squarely applies to the goods in question, and therefore, their confiscation needs to be upheld. 

The Bench observed that once the goods are confiscated, section 125 of the Customs Act requires that, unless the goods are prohibited goods, the owner should be given the option to redeem the goods on payment of a fine. If they are prohibited goods, the adjudicating authority has the discretion of allowing redemption or not. This section further restricts the quantum of penalty to the market value of the goods. It is not the case of either side that the motors imported by the assessee were prohibited goods. Therefore, they were released on redemption fine. 

The two-member bench comprising Rachna Gupta (Judicial) and Subba Rao (Technical) upheld the confiscation of goods against the assessee. 

To Read the full text of the Order CLICK HERE

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