2009 (4) TMI 617 - AT - Customs

Summary

Issues Involved:
1. Misdeclaration of imported goods.
2. Enhancement of transaction value.
3. Imposition of penalties on the importer and the Custom House Agent (CHA).

Detailed Analysis:

Misdeclaration of Imported Goods:
The appellant-importer declared the goods as "M.S. Sheet cuttings" and "Non-alloy steel melting scrap" in the bills of entry. However, upon examination, the authorities found the actual goods to be "Secondary/Defective CRGO steel sheets." The analytical report from M/s. National Metallurgical Laboratory confirmed this finding, indicating that the goods were essentially steel sheets from used and salvaged transformers/electrical equipment. The Senior Manager of the appellant-importer and the proprietor of the CHA admitted in their statements that the goods were misdeclared to pay lesser customs duty. The adjudicating authority concluded that the goods were misdeclared and rejected the transaction value declared by the appellant-importer.

Enhancement of Transaction Value:
The adjudicating authority enhanced the CIF value of the imported goods to $314 per MT based on contemporaneous imports of similar goods. The appellant-importer contested this enhancement, arguing that there was no evidence to support the allegation and that the chemical analysis report was not properly considered. However, the adjudicating authority relied on the contemporaneous Bill of Entry for "Silicon Electrical Steel Strips/Scraps" from Italy to justify the enhancement. The Tribunal upheld the enhancement of the CIF value, finding no merit in the appellant-importer's appeal.

Imposition of Penalties:
The adjudicating authority imposed a penalty of Rs. 2,00,000/- on the appellant-importer under Section 112(a) of the Customs Act, 1962, and a penalty of Rs. 20,000/- on the CHA under the same section. The Tribunal upheld the imposition of penalties but reduced the amounts considering the circumstances. The penalty on the appellant-importer was reduced to Rs. 1,00,000/-, and the penalty on the CHA was reduced to Rs. 10,000/-.

Confiscation and Redemption Fine:
The adjudicating authority ordered the confiscation of the goods under Section 111(m) of the Customs Act, 1962, but allowed the importer to redeem the goods on payment of a fine of Rs. 4,00,000/- and appropriate duty. The Tribunal upheld the confiscation but reduced the redemption fine to Rs. 2,00,000/-, considering the demurrage incurred by the appellant-importer.

Conclusion:
The Tribunal concluded that there was a clear misdeclaration of the imported goods, justified the enhancement of the CIF value based on contemporaneous imports, and upheld the imposition of penalties while reducing the amounts. The appeals were disposed of accordingly, with the final order pronounced in open court on 1-4-2009.