2005 (10) TMI 351 - AT - Customs

Summary

Issues:
1. Differential duty demand based on enhancement of value of imported goods.
2. Imposition of penalty under Section 114A of the Customs Act, 1962.
3. Penalty imposed on importer for abandoned goods under Section 112(a) of the Act.
4. Order for waiver of pre-deposit and stay of recovery.

Analysis:

1. The first issue revolves around the demand for a differential duty of over Rs. 5 lakhs from the appellants concerning two consignments of concrete paving blocks imported in June 2000. The Commissioner based this demand on the enhancement of the goods' value using the domestic market price in the country of exportation (UAE). The Tribunal observed that the enhancement of value by the Commissioner goes against Rule 8(2) of the Customs Valuation Rules, 1988, which prohibits determining the value of import goods based on the price in the export country's domestic market. Consequently, the Tribunal found that the appellants have a prima facie case against the demand for the differential duty.

2. Moving on to the second issue, the Commissioner imposed a penalty on the assessee under Section 114A of the Customs Act, 1962. The Consultant argued that this penalty was unwarranted since the show cause notice was issued under Section 124, not Section 28. The Consultant contended that penalties under Section 114A are linked to demands of duty under Section 28(2) of the Act. The Tribunal agreed with the Consultant's submission, indicating that there was merit in the argument presented.

3. The third issue pertains to the penalty imposed on the importer for abandoning a 3rd consignment of goods in July 2000 under Section 112(a) of the Act. Despite the abandonment, the Commissioner levied a penalty of Rs. 1 lakh. The Consultant contended that abandoned imported goods are not subject to confiscation, thus the importer should not be liable for a penalty. The Tribunal found the Consultant's argument compelling and acknowledged a strong prima facie case against the penalty.

4. Lastly, considering the strong prima facie case in favor of the appellants on various issues, the Tribunal ordered the waiver of pre-deposit and a stay of recovery concerning the duty and penalty amounts. This decision indicates the Tribunal's recognition of the validity of the arguments presented by the appellants and the Consultant, leading to a favorable ruling in their favor.