ORDER
S.L. Peeran, Member (J)
1. In this appeal, the appellants are aggrieved with the order of confiscation of goods, granting them option of redemption on payment of fine and penalty imposed in the matter by the Commissioner of Customs (Sea), Chennai in the impugned order dated 21-10-2002. The appellants had imported Ceramic Tiles valued at US $ 3.6 per sq. mtr. (C&F), Chennai on the strength of invoice dated 20-6-2002 raised by M/s. Nippon Granites, Sri Lanka for the supply of 4363 sq. mtr. of Ceramic Tiles in 3×20 containers.
2. On investigation, it was found that the importers had produced the Country of Origin Certificate dated 2-7-2002. After due consideration of the matter, the Commissioner has enhanced the value of ceramic tiles to US $ 10 per square meter (CIF) and has also ordered for levy of anti-dumping duty as applicable for the subject goods in terms of Notification No. 50/2002, dated 2-5-2002.
3. Ld. Counsel Shri A.K. Jayaraj submits that they are not challenging any portion of the order except the imposition of fine and penalty imposed on the appellants and he strongly prayed for reduction of the fine and penalty in the matter. It is his contention that appellants have suffered enormous demurrage and also that they have not made any profit in the matter. The margin of profit, according to them, has come down considerably in view of warehouse charges, steamer agent charges mounting to Rs. 1,28,688/- and Rs. 89,603/- respectively. It is stated that price of the goods have fallen down considerably and in this regard an affidavit of Shri K. Raghava Reddy, who is the Chairman of the appellant firm, has been filed. A fresh affidavit was also filed to state that the retail market price of the above goods is Rs. 485/- per sq. meter as valued from M/s. Mahalakshmi Enterprises and Rs. 550/- per sq. mtr. quoted by M/s. Dutt Lakshmi Ceramics and not Rs. 640/- per sq. mtr. as worked out by the Department. It is further, contended, that even if Rs. 540/- per sq. mtr is taken as market price, then the margin of profit comes to Rs. 2,80,715/- and adding steamer charges and warehouse charges as noted respectively, the profit is Rs. 63,715/- only. It is also stated that payment of duty at US $ 10 per sq. mtr., apart from anti-dumping duty and payment of warehouse and steamer agent charges would bring down the margin of profit to not more than Rs. 63,715/-. As already stated, he has incurred severe losses by borrowing monies from third parties and by paying high rate of interest. It is his submission that the calculation of margin of profit has not been properly arrived at in terms of the formula adopted by the Tribunal in the case of Shankar Trading Co. v. CC, Trichy, 1999 (106) E.L.T. 456. It is his submission that department cannot adopt the price as declared for the purpose of arriving at the market value but they should have proceeded on enhanced value and, if this is done, then the margin of profit is wiped out and they will not be entitled for the relief as prayed by them. He submits that reduction has to be given to wipe out margin of profit and when there is no margin of profit, the question of imposing fine does not arise. He prays for reduction of fine and penalty in the matter as the offence was not severe and it does not call for imposition of such huge fine and penalty in the matter.
4. Ld. DR filed a report from the department wherein it is stated that on verification from the wholesale market, they have found the value of the goods to be Rs. 640/- per sq. mtr. He submits that the department has correctly worked out the market value. Therefore, he seeks for upholding the order of the Commissioner by rejecting the appeal.
5. On a careful consideration of the submissions, we notice that appellant has filed an affidavit to show that the margin of profit has come down to Rs. 63,715/-. It is also stated that department has worked out the margin of profit on the basis of value declared and not on the basis of enhanced value and it is stated that the correct procedure is to work out the market value on the basis of enhanced value in the matter. There is force in this submission. Once the value has been enhanced, then the profit margin has to be worked out only on the basis of enhanced value. The department has erred in proceeding on the basis of declared value to arrive at the high profit in the matter. This contention of appellant requires to be accepted. In that view of the matter, the case is remitted to the authorities to work out the margin of profit in terms of the formula laid down in the case of Shankar Trading Co. v. CC, Tricky (supra). If the margin of profit is wiped out as contended, then the question of imposing redemption fine may not arise in the matter. The penalty may be fixed commensurate to the offence taking into consideration the extenuating circumstances in the matter. On the appellant’s plea that the enhanced value is required to be accepted, the matter is remanded to the original authority for de novo consideration. As the goods are still in custody, the matter may be adjudicated within one month from the receipt of this order. Thus, the appeal is allowed by way of remand. Ordered accordingly.