2010 (2) TMI 821 - AT - Customs

Misdeclaration of the goods - value indicated on the invoice is for stainless steel melting scrap whereas the goods which have been exported to India are actually nickel alloy steel scrap Held that - value of stainless steel melting scrap cannot be the transaction value of nickel alloy steel scrap Supreme Court in the case Sanjay Chandiram (1995 - TMI - 43997 - SUPREME COURT OF INDIA) held that when the declaration is found to be false the declared value is not acceptable penalty reduced partly allowed by reduction in the penalty imposed.

Summary

Issues:
Misdeclaration of imported goods as stainless steel melting scrap when they were actually nickel alloy steel scrap; Valuation of the imported goods based on misdeclaration; Acceptance of transaction value for valuation purposes; Reliance on case law for valuation principles; Reduction of penalty imposed by the original authority.

Analysis:
The case involved the import of goods declared as 'Stainless steel melting scrap' but found to be 'nickel alloy steel scrap' upon examination. The original authority rejected the declared value of US $280 per M.T. and valued the goods at US $445.15 per M.T. based on calculations provided by the importer and market reports. The lower appellate authority, however, set aside this valuation, emphasizing the acceptance of transaction value for valuation purposes. The respondent argued that the wrong consignment was sent by the supplier and denied misdeclaration. The appellant contended that misdeclaration was evident from testing and that the declared value could not be accepted. Reference was made to the Supreme Court's decision in Radhey Shyam Ratanlal case, supporting reliance on international market prices for valuation.

Upon perusal of the case law and facts, the Tribunal found clear misdeclaration of goods in the invoice and Bill of Entry. The declared value for stainless steel melting scrap could not be considered the transaction value for nickel alloy steel scrap. Citing the Supreme Court's ruling in CC, Calcutta v. Sanjay Chandiram, the Tribunal emphasized that false declarations render declared value unacceptable. Moreover, the Tribunal approved the use of international market prices from reputable publications like Metal Bulletin, which were also provided by the respondents. Consequently, the lower appellate authority's decision was overturned, and the original authority's valuation was restored. However, the penalty imposed was reduced from Rs. 1,00,000 to Rs. 50,000 to align with the ends of justice. The appeal was partly allowed due to the penalty reduction.

In conclusion, the Tribunal upheld the original authority's valuation based on misdeclaration and reliance on international market prices. The decision underscored the importance of accurate declaration and appropriate valuation methods in customs matters.