M/S RELAX SAFETY INDUSTRIES, MUMBAI AND ANR. versus THE COMMISSIONER OF CUSTOMS, (IMPORT), MUMBAI

Citation: [2007] 6 S.C.R. 296 · Decided: 09-05-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

A 
MIS RELAX SAFETY INDUSTRIES, MUMBAI AND ANR. 
v. 
THE COMMISSIONER OF CUSTOMS, (IMPORT), MUMBAI 
MAY 9, 2007 
B 
[DR. ARJJIT PASA YAT AND LOKESHWAR SINGH PANT A, JJ.] 
Customs Act, 1962: 
"' 
SS. ll l (d) and (m) and ll 2 read with S. 28-Misdeclaration and gross 
C under-valuation of goods-Import of dust and mist respirators, earplugs and 
mould-Goods described in bill of entry for clearance as "moulded plastic 
parts" and plastic fabricated cups, and valued accordingly-Bill of entry 
also showing that some of goods were earlier subjected to adjudication-
Goods cleared on payment of duty on declared value-Subsequently 
D misdeclaration and undervaluation detected-Notice for confiscation, 
enhancement of value and penalty-Held, CEGAT rightly held that those 
goods which were already subjected to adjudication i.e., respirators cannot 
be subjected to confiscation once again-As regards the other goods, CEGAT 
rightly held them earplugs and that their declaration as plastic moulded 
cups was deliberate so as to mislead the authorities-Confiscation ~f these 
E goods under Section 11 l(d) was rightly upheld by CEGAT. 
Assessee imported a consignment describing it in the bill of entry for 
clearance as "moulded plastic parts" and "plastic fabricated cups" and 
declared the value of the consignment accordingly. The said bill of entry also 
F indicated that some or all the goods had been subjected to some adjudication. 
As a result of which they were permitted to be cleared on payment of fine. 
The goods were declared on payment of duty on the value declared by the 
importer. Subsequently, it was-detected that the goods were, in fact, dust and 
mist respirators, and earplugs as stated by proprietor of appellant no. 1. 
Therefore, the goods were seized and a notice indicating gross-under valuation 
G of goods and proposing enhancement of value of the goods was issued. 
H 
Confiscation of the goods was proposed under Clause (m) of Section 111 of 
the Customs Act, 1962. The notice also indicated that respirator was 
classifiable under heading 63.07 of the tariff and not under heading 39.26 as 
claimed. The Collector of Customs ordered confiscation of dust and mist 
296 
1.-
RELAX SAFETY INDUSTRIES, MUMBAI'· COMMNR. OF CUSTOMS. (IMPORT). MUMBAI 
297 
-} 
#> 
respirators, earplugs and mould under clauses (d) and (m) of Section 111 of A 
the Act However, the appellants were permitted to redeem the confiscated 
articles on payment of fine. He ordered enhancement of the assessable value 
of the respirators and earplugs and imposed penalty under Section 112 of 
the Act. The assessees filed appeals before the Customs, Excise and Gold 
(Control) Appellate Tribunal The basic issue raised before the CEGAT was B 
that once goods had been subjected to adjudication, confiscation of the same 
goods was permissible. The CEGAT held that the mere fact that the goods 
formed part of the same consignment of which one part was held liable to 
confiscation earlier i.e. respirators, would not impinge on the rest of the 
... 
consignment which could be subjected to confiscation subsequently, and 
opined that only the respirators could not be subjected to confiscation once c 
again. Aggrieved, the assessees filed the appeals. 
On the question : whether there. was confiscation of the whole 
consignment of part of it earlier, 
Dismissing the appeal, the Court 
D 
HELD: 1.1. The confiscation of the goods was ordered on two counts . 
.... 
The first is that they are consumer goods usable as such, and the second is 
>-
that their value has been grossly under declared, In the instant case, a 
categorical finding has been recorded by the CEGAT that there was E. 
confiscation of only one part and not the whole consignment. The effect of 
Section 28 of the Customs Act, 1962 also cannot be lost sight of, prima facie, 
when there is case of fraud made out. [Paras 12 and 151[301-D;304-BI 
Mohan Meakin Ltd v. CCE, (2000) 115 ELT 3 SC held inapplicable. 
1.2. It can not be said that because the goods were supplied free of F 
charge by an exporter from United of America as they did not conform to 
standards of the U.S. Federal Government they are in fact not earplugs and 
not usable as such. The fact that the earplugs did not confirm to a particular 
standard does not render them unusable as such goods, or unsuitable for 
such use. All that it shows is that in the particular country to those standards G 
of which they cannot conform, they cannot be put to such use

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