P.G. Chacko, Member (J)

1. A parcel which came by speed post from Hong Kong, addressed to M/s. Laila International, No. 137, Angappa Naicken Street, Chennai was detained by officers of the Air Intelligence Unit (Air Customs, Chennai) on 5-10-2002. The parcel was opened and examined, whereupon it was found that the contents were declared on the label as "memory modules" valued at HK $ 2500. On further examination, it appeared that the parcel contained 500 RAMs with the following split up :-

"1. HLT 128 MB : 412 Nos.

2. Hynix 226A RAMs : 88 Nos.

(Hy 504 2882247 K Korea)"

The above goods were seized under Section 110 of the Customs Act, on the premise that they had been misdeclared for import. The appellant, claiming to be the proprietor of M/s. Laila International, came to receive the parcel on 20-11-2002. But he stated that the parcel actually belonged to one Shri Juzer Mandsaur of Mumbai, whom he did not know. Nobody by name Juzer Mandsaur could be traced. The appellant was arrested, and released on bail later. Subsequent to his release from jail, summonses were issued to him, but he did not respond. However, he sent a letter dated 12-3-2003 to the customs authorities claiming ownership over the above goods. He wanted to clear the goods by filing Bill of Entry as he was having Import Export Code. In his letter, the appellant also slated that the package had been correctly declared. The department issued a show cause notice dated 27-3-2003 to the appellant proposing confiscation of the goods under Section 111(d), (1) and (m) of the Customs Act as also penalty on him under Section 112(a) of the. The proposals were contested. In adjudication of the dispute, the original authority ordered absolute confiscation of the goods valued at Rs. 5 lakhs, under Section 111(d), (1) and (m) of theread with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992. It also imposed a penalty of Rs. 15,000/- on the appellant under Section 112(a) of the. Aggrieved, the appellant preferred an appeal to the Commissioner (Appeals) and the latter modified the absolute confiscation into confiscation with redemption fine of Rs. 2,50,000/-. The penalty was not interfered with it. The appellant, in the present appeal, challenges the confiscation and penalty.

2. Ld. Counsel for the appellant refers to Section 82 of the Customs Act and submits that the charge of misdeclaration is not sustainable against the appellant. The declaration found on the goods was only an entry for the purposes of the Customs Act and the same was not to be reckoned as a "declaration" filed by the importer. Hence, there was no question of misdeclaration of the goods in this case. In this connection, Id. Counsel relies on the Tribunals decision in CC, Mumbai v. M. Vasi wherein the scope of declaration accompanying postal articles coming from abroad was examined with reference to the provisions of Section 82 of theand it was held that, even if any entry on such declaration was found to be wrong, the responsibility of wrong declaration could not be fastened upon the importer. In the absence of mis-declaration of anything by the appellant, the goods are not liable to confiscation and therefore the importer is not liable to be penalised. Ld. SDR reiterates the findings of the lower appellate authority and particularly submits that the original statement dated 20-11-2002 of the appellant is inculpatory and the same is not affected by his belated retraction. According to Id. SDR, as the offence of mis-declaration charged against the appellant was admitted by him in his original statement, the order of confiscation of the goods cannot be faulted.

3. After giving careful consideration to the submissions, I find that, in terms of Section 82 of the Customs Act, the description and value of the goods declared on its label by the supplier cannot be held to be importers declaration. This gets support from the case of M. Vasi (supra). The relevant paragraphs of the order are extracted below :-

"10. When the goods are imported by land, Sea or Air a Bill of Entry is filed for their clearance in terms of Section 46 of the Customs Act, 1962 where the responsibility of making a truthful declaration is upon the declarant and where any contravention or lapse can render the goods liable for confiscation and the declarant liable to pay penalty. In the case of baggage, as per Section 77 of the Customs Act the declaration is made by the passenger orally. Section 82 which deals with post parcels is entirely different in construction and in coverage. It does not require the importer to make a declaration. The declaration made by the exporter abroad is deemed to be an entry for the goods. This is very important difference. Even if an entry is found to be wrong the responsibility of wrong declaration cannot be fastened upon the importer. It would appear that Section 111 of thecognizance of this situation. Clauses (1) and (m) of Section 111 read as below :

"(l) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under Section 77.

(m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77 in respect thereof or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to Sub-section (1) of Section 54".

11. The phrase "entry made under this Act" comes from Section 46. In terms of "Section 82 which reads as below no entry is made by the importer. That is why where as special mention is made of Section 77, there was no mention of Section 82 in the two clauses of Section 111.

"Section 82. Label or declaration accompanying goods to be treated as entry. - In the case of goods imported or exported by post, any label or declaration accompanying the goods, which contains the description, quantity and value thereof, shall be deemed to be an entry for import or export, as the case may be for the purposes of this Act."

Following the view taken by the Division Bench in the case of M. Vast (supra), I find that the allegation of misdeclaration of description and value of goods raised against the appellant cannot be sustained. The only ground for confiscation of the goods is misdeclaration. There being no misdeclaration, the confiscation of the goods cannot be sustained. Therefore, the confiscation (along with fine) is set aside. Consequently, the penalty also is vacated inasmuch as penalty under Section 112 is dependent on confiscability of goods under Section 111 of the.

4. The appellant is entitled to release of the goods against payment of appropriate duty of customs. For the purpose of payment of duty, the goods require to be correctly valued. It appears from the records that the lower authorities did not even attempt valuation in terms of the relevant Valuation Rules. The value declared by the supplier is HK $ 2500. It appears from the records that, in his letter dated 12-3-2003, the appellant, inter alia, claimed that the contents of the baggage had been correctly declared. Hence it has to be held that the appellant (importer) accepted the exporters declaration. In other words, HK $ 2500 should be treated as the transaction value. It is up to the Customs authorities to inquire into the correctness of this value. Hence, after rejecting the value of Rs. 5 lakhs estimated by the lower authorities, I direct the original authority to determine the correct value of the goods under the Customs Valuation Rules read with Section 14 of the Customs Act after giving the appellant a reasonable opportunity of being heard. It will be open to the appellant to clear the goods by paying the appropriate duty.

5. In the result, the impugned order gets set aside and the appeal stands allowed by way of remand.

(Order dictated and pronounced in open Court)