2011 (7) TMI 371 - AT - Customs

Confiscation - undervaluation of imported items - undervaluation is based not only upon the statement of Shri R.Suresh, Proprietor of the appellant but also on the prices shown in the NIDB data - Although the learned counsel vehemently contends that valuation cannot be arrived at on the basis of a statement and that the importer had produced copies of correspondence to show proof of the negotiated prices and relied upon the NIDB data showing lower contemporaneous price for some of the items - Held that - there is a clear acceptance by Shri Suresh that he had undervalued the goods - There is no reason to interfere with the impugned order as regards confiscation.

Summary

Issues Involved:
Undervaluation of imported goods leading to confiscation, imposition of fine, and penalty.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Chennai, involved the issue of undervaluation of imported goods, specifically Panasonic video cassettes, Sony video cassettes, audio cassettes, and floppy discs. The adjudicating authority had confiscated these items due to undervaluation by the importers, offering redemption on payment of a fine of Rs. 4 lakhs and imposing a penalty of Rs. One lakh. The Tribunal considered the arguments presented by both sides, where the appellant's counsel contended that valuation should not solely rely on a statement but should consider negotiated prices and NIDB data showing lower contemporaneous prices. However, the Tribunal noted that during the personal hearing, the importers agreed to an enhancement based on accepted prices and only requested leniency on the fine and penalty. The Tribunal distinguished previous decisions, emphasizing that in this case, there was a clear acceptance by the importer that undervaluation had occurred, leading to no interference with the confiscation order. Despite this, considering the value of the confiscated goods at about Rs. 4.30 lakhs, the Tribunal reduced the fine to Rs. 2 lakhs and the penalty to Rs. 50,000, partially allowing the appeal in these terms.

This judgment highlights the importance of substantiating valuation claims with concrete evidence and the implications of accepting undervaluation during importation proceedings. It underscores the significance of transparency in pricing negotiations and the consequences of admitting undervaluation. The Tribunal's decision to reduce the fine and penalty reflects a balanced approach considering the value of the confiscated goods. The reference to previous cases demonstrates the Tribunal's analytical approach in distinguishing precedents based on specific factual circumstances. Overall, the judgment serves as a reminder of the legal principles governing import valuation and the consequences of undervaluation in customs proceedings.