2009 (7) TMI 1019 - AT - Customs

Misdeclaration of imported goods - consignment of Crockery and Toiletries - It was alleged by the SIIB that only 20% of the goods were in conformity with the declarations made in the invoice and Bill of Entry and the remainder of the goods had not been declared in the Bill of Entry - Held that - the goods were bought by the overseas shipper in an auction and sold to the appellants on stock lot basis. Hence, the auction price cannot be compared with the price of the impugned goods in the Indian market, as was done by the Department. Since the appellants contention that the goods were bought in stock lot basis has not been considered by the Commissioner and no findings have been recorded in this regard, we deem it fit to remand the matter to the Commissioner for de novo decision - appeal allowed by way of remand.

Summary

Issues:
Mis-declaration of goods leading to under-valuation, confiscation, and penalties under Customs Act, 1962.

Detailed Analysis:
1. The case involved the mis-declaration of goods by the appellants, leading to under-valuation. The Special Investigation & Intelligence Branch intercepted a consignment of Crockery and Toiletries, alleging that only 20% of the goods matched the declarations, while the rest were undeclared reputed brands. The Department valued the goods at Rs. 22,85,450/- CIF, significantly higher than the declared value of Rs. 2,85,054/-.

2. The Department alleged that the appellants intentionally failed to declare the brand and complete description of the goods to evade duty, resulting in confiscation under Section 111(m) and penalties under Section 112(a) of the Customs Act, 1962. The Commissioner enhanced the value of the consignment and imposed fines.

3. The appellants contested the Department's actions, arguing that the rejection of declared value based on lack of brand declaration was unjustified. They also claimed that the goods were purchased on a stock lot basis, making the valuation rules inapplicable. The appellants challenged the Department's failure to provide evidence of under-valuation, citing the burden of proof on the Revenue.

4. The learned SDR contended that the mis-declaration was clear, supported by the appellants' statements acknowledging incomplete declarations. Referring to legal precedents, the SDR argued that the appellants' admissions did not require further proof. Market surveys and valuation methods were utilized to determine the CIF value.

5. The Tribunal observed that the appellants' willingness to pay duty based on regular valuation did not constitute an admission of under-valuation. The lack of substantial data to dispute the declared value was noted. The appellants' assertion of purchasing goods on a stock lot basis was not adequately considered by the Commissioner.

6. Consequently, the Tribunal set aside the impugned order and allowed the appeal by way of remand. The matter was directed to be reconsidered by the Commissioner, emphasizing the appellants' purchase on a stock lot basis and the issue of importing goods without permission of IPR right holders.

This detailed analysis covers the mis-declaration leading to under-valuation, the legal arguments presented by both parties, the Tribunal's assessment of the case, and the ultimate decision to remand the matter for further consideration by the Commissioner.