2015 (4) TMI 1074 - AT - Customs

Imposition of penalty - Rejection of declared value - Revenue rejected the declared value of imported goods and enhanced it by referring Rule 9 of the Customs Valuation Rules, 2007 by solely based on the DRI s letter dated 6.1.2009, without comparing the it with any identical/similar goods imported at or about the same time - Held that Revenue s rejection of declared value is not legal and proper and also quantum of penalty imposed in the adjudication order, is in the higher side. As appellant had incurred demurrage and other shipping charges for delayed adjudication, which has a direct bearing on the profitability in the appellant s firm; and also the appellant is a first time importer of the goods therefore, the interest of justice weighs in favour of reduction in the quantum of penalty confirmed in the adjudication order. - Decided in favour of appellant

Summary

Issues:
1. Customs valuation rules application and penalty imposition justification.

Analysis:
The appeal before the Appellate Tribunal CESTAT New Delhi challenged an order passed by the Commissioner of Customs (Appeals) regarding the imposition of a penalty on an importer of used clothes. The appellant imported 121 BLS of used clothes, and the declared value was not accepted by the Customs Department, leading to an enhancement of the assessable value and a penalty imposition of &8377; 3,50,000. The appellant, a first-time importer, contested the penalty's quantum, arguing that the Customs Valuation Rules were not correctly applied, especially Rule 9, and that the reliance on a DRI's letter for value enhancement was unjustified. The appellant also highlighted additional charges incurred due to delayed adjudication.

The Appellate Tribunal found the rejection of the declared value justified but deemed the enhancement based solely on the DRI's letter as improper. The Tribunal noted that the penalty amount was on the higher side, considering the appellant's circumstances as a first-time importer and the impact of delayed adjudication on additional charges incurred. Consequently, the Tribunal reduced the penalty from &8377; 3,50,000 to &8377; 1 Lakh, emphasizing the need for a fair balance between penalty imposition and the importer's situation. The appeal was thus disposed of with the revised penalty amount, reflecting a consideration of justice and fairness in the decision-making process.