[Order per : Justice K.K. Usha, President]. - The challenge in this appeal at the instance of the importer is against the order passed by the Commissioner of Customs, Jodhpur, dated 3-9-2002. Under the above order the Commissioner had enhanced the assessable value of the goods imported under Bills of Entry dated 14-8-96 and 27-8-96. A duty demand amounting to Rs. 1,57,511/- was made under the first proviso to sub-section (1) of Section 28 of the Customs Act, 1962 in addition to the duty already paid by the party. Further an amount of Rs. 1,00,000/- was ordered as redemption fine and a penalty of Rs. 1,57,511/- was imposed on the importer under Section 114A of the Customs Act, 1962. Thereafter, an amount of Rs. 40,000/- each was imposed on the two partners under Section 112 of the Customs Act, 1962. It was also held that the importer is liable to pay interest under Section 28AB of the Customs Act. Aggrieved by the above, the importer has come up in appeal.

2. The main contentions raised are -

(1)      the adjudicating authority has erred in enhancing the assessable value on the basis of the declaration alleged to have been filed by the foreign supplier of the goods with the Customs and Excise Department, Hong Kong.

(2)      no redemption fine could have been imposed in this case as the goods were not available at the time of assessment. (They were permitted to be cleared in 1996 whereas show cause notice was issued only in 2001).

(3)      the penalty under Section 114A could not have been imposed since the above provision came into force only on 28-9-96 whereas import was earlier to that date. Interest also could not have directed to be paid under Section 28AB as that section came into force only on 28-9-96.

(4)      no penalty could have been imposed on the partners when the penalty had already been imposed on the importer firm.

3. The appellants are manufacturers of digital watches for children. They imported component parts of electronic modules for digital electronic watches from M/s. Alam Trading Company, Hong Kong under two Bills of Entry dated 14-8-96 and 27-8-96. Clearance of the goods was allowed by Customs, Jaipur on payment of duty on declared CIF value. Acting on an intelligence officers of the DRI initiated investigations in the matter. Inquiries were made with the Hong Kong Customs and Central Excise Department through Consulate General of India, Hong Kong for ascertaining the actual value of goods declared before them by the supplier. Pursuant thereto Consulate General of India, Hong Kong took up the matter with the Head of Trade Licensing Investigation Bureau of Hong Kong Customs and Excise Department and forwarded a copy of the export declarations lodged by the supplier M/s. Alam Trading Co. Hong Kong, to the Hong Kong Customs and Excise Department in respect of the aforesaid goods exported to the appellant. An examination of the export declarations made it clear that there is gross variance in the values stated in the invoices issued by the supplier to the appellant vis-a-vis values lodged with the Hong Kong Customs. The CIF value and assessable value thus calculated worked out to Rs. 2,19,986/- and Rs. 2,22,186/- respectively as against Rs. 1,63,350/-, Rs. 1,62,964/- respectively declared by the appellant in respect of the consignment imported vide Bill of Entry No. 1148, dated 14-8-96. In the case of the Bill of Entry No. 1207, dated 27-8-96 the CIF value and the assessable value thus calculated worked out to Rs. 4,75,139/- and Rs. 4,79,890/- respectively as against Rs. 1,53,513/- and Rs. 1,55,049/- respectively declared by the appellant. It is on this basis show cause notice was issued.

4. It is contended on behalf of the appellant that the adjudicating authority could not have accepted the value alleged to have been shown in the export declarations made by M/s. Alam Trading Co. The document does not bear any signature or official seal of Customs Department, Hong Kong. The authenticity of the document is questionable. Quantity and description shown in the export declaration do not tally with the quantity actually imported and cleared through Customs and that the commodity code mentioned in the export declaration is different from the one shown in the Bill of Entry cleared through Customs. It is also contended that the price paid through Bank was only to the extent of invoice price and that value of the individual items are not shown in the export declaration. Since the show cause notice was issued after a long period of 4 years the appellant is not in a position to produce manufacturer’s invoice as per the direction of the department.

5. We do not find any merit in the above contentions raised by the appellant. The Commissioner has specifically considered these objections in his order and the view taken by him is not liable to be interfered with. The export declaration given by M/s. Alam Trading Co. was obtained by DRI from their counterpart through legal and diplomatic channel. Entries in these declarations would tally with the name of the party, airway bill number and description of the goods. The declaration bears the official markings of the Customs and Excise Department in the space marked as “official use only” at the top right hand side of the export declaration which is a computer generated official stamping. The Commissioner is also correct in the finding that the broad heading of the goods “Component Parts of Electronic Modules for Digital Electronic Watches” mentioned in the export declaration as well as in the invoice No. 1-1090-8-96, dated 7-8-96 and Bill of Entry No. 1207, dated 27-8-96 tallies with each other. In the Bill of Entry all the individual component parts have been given while in the export declaration the total number of Digital Modules in CKD condition have been shown and not individual component part separately. The difference in tariff classification and the Bill of Entry is not much relevant. Under these circumstances, we find that the Commissioner was fully justified in enhancing the assessable value on the basis of the export declaration. We, therefore, uphold the duty demand of Rs. 1,57,511/- in addition to the duty already paid by the party.

6. The contention raised by the appellant regarding applicability of Section 114A and Section 28AB is only to be accepted. Since these sections came into force only on 20-8-96 no penalty could have been imposed under Section 114A and no interest could have been demanded under Section 28AB. We find merit in the contention of the Revenue that the penalty on the firm could be sustained under Section 112 of the Customs Act. But in the facts and circumstances we hold that the firm will be liable to pay penalty to the extent of 50% of the duty demanded. The penalty imposed on the partners are vacated.

7. We now come to the question of redemption fine. It is contended on behalf of the appellant that since the goods are not available, redemption fine is not liable to be imposed. The above contention was rejected by the Commissioner placing reliance on the decision of the Apex Court in Weston Components Ltd. v. CC, New Delhi - (S.C.). The learned Counsel for the appellant would submit that the facts in the present case are entirely different from Weston Components Ltd. On the other hand, decisions of this Tribunal in Shiwalya Spinning & Weaving Mills (P) Ltd. v. CC. Amritsar - (T). Chinku Exports v. CC. Calcutta - (T) and Prudential Pharmaceuticals Ltd. v. CC, Chennai - (T) are applicable to this case.

8. In Shiwalya Spinning & Weaving Mills (P) Ltd., this Tribunal has taken the view that when the goods are not available for confiscation, redemption fine cannot be imposed. In the facts of the above case goods were cleared on payment of duty and later it was held that the importer was liable to pay higher amount of duty. The contention raised by the importer that no redemption fine could be imposed and the goods were not available for confiscation was accepted by this Tribunal. A similar view was taken in Chinku Exports - . In the above case also goods were not available for confiscation as the same having been exported many years ago. It was also observed therein that there was no bond with such security in any format available with the department which could be enforced. It was, therefore, held that the redemption fine imposed was totally outside the purview of the legal provisions. Same was the view taken in Prudential Pharmaceuticals Ltd. - and Universal Steel Agencies v. CC, Kandla - (T).

9. We now consider whether the ratio of the above decisions of the Tribunal is against what has been held by the Supreme Court in Weston Components Ltd. The order of the Apex Court reads as follows: -

“Order - It is contended by the learned Counsel for the appellant that redemption fine could not be imposed because the goods were no longer in the custody of the respondent-authority. It is an admitted fact that the goods were released to the appellant on an application made by it and on the appellant executing a bond. Under these circumstances if subsequently it is found that the import was not valid or that there was any other irregularity which would entitle the customs authorities to confiscate the said goods, then the mere fact that the goods were released on the bond being executed, would not take away the power of the customs authorities to levy redemption fine.

2. The appeal is dismissed.”

10. A reading of the above order would show that the Apex Court has taken the view that redemption fine can be imposed even in the absence of the goods as the goods were released to the appellant on an application made by it and on the appellant executing a bond. Since the goods were released on a bond the position is as if the goods were available. The ratio of the above decision cannot be understood that in all cases the goods were permitted to be cleared initially and later proceedings were taken for under-valuation or other irregularity, even then redemption fine could be imposed. We are, therefore, inclined to accept the contention raised by the appellant on this issue and set aside the redemption fine.

11. We, therefore, sustain the duty demand affirmed in the order impugned. Penalty imposed on the firm under Section 114A is set aside, but such penalty is sustained under Section 112 of the Customs Act, the quantum is reduced to 50%. Penalty imposed on the partners are set aside. The redemption fine as well as the demand of interest under Section 28AB are set aside. The appeals stand partly allowed as above.