2013 (9) TMI 100 - AT - Customs

Demand of differential duty - Misdeclaration of Goods - Held that - On examination of the goods, it was found that there was gross mis-declaration in respect of nature of the goods as also their value - In order to ascertain the value of the goods a market survey was conducted in which the AR of the assesse was present and the assesse also admitted to the valuation done on the basis of market survey in a statement - the assesse paid the differential duty willingly without any protest. Once the assesse had admitted to under-valuation and mis-declaration of goods and also discharged the duty liability willingly - he cannot turn around and now say that the valuation done by the Customs authorities was not sustainable in law determination of the value by the Customs authorities and the confirmation of duty demand As regards absolute confiscation of goods during the hearing before us, the appellant had pleaded for allowing re-export of these goods. We find merit in this request - Re-export of toys were allowed. Confiscation of goods U/s 111(d) Penalty u/s and 112(a) and 114A - Held that - Redemption fine was reduced Considering the assessable value of the goods the redemption fine imposed was on the higher side - Held that - There was no reason to interfere with the amount of penalty in case of mis-declaration on the part of the assesse - penalty u/s114A was justified There was no reason to impose a nominal penalty u/s 112(a) thus it was set aside -Regarding the equivalent penalty imposed on the importer u/s114A - Decided against assesse.

Summary

Issues:
- Mis-declaration and under-valuation of imported goods
- Confiscation of goods and imposition of penalties
- Assessment of assessable value and duty demand

Analysis:
1. Mis-declaration and under-valuation of imported goods:
The appellant, a company, imported a consignment of mixed consumer goods, including toys, from China. The initial invoice value was enhanced by the assessment group due to suspicions of mis-declaration and under-valuation. Upon examination, discrepancies were found in the consignment, leading to a market survey to determine the assessable value. The appellant disputed the revised value, citing legal precedents, but eventually admitted to the under-valuation and paid the differential duty without protest. The Tribunal upheld the Customs authorities' valuation at Rs. 59,10,887 and the duty demand at Rs. 12,66,910, emphasizing the appellant's admission and payment as crucial evidence.

2. Confiscation of goods and imposition of penalties:
Certain goods, specifically toys valued at Rs. 40,723, were subject to absolute confiscation due to import restrictions from China. The appellant requested re-export of these goods, which the Tribunal granted. The Tribunal also reviewed the fines and penalties imposed, considering the assessable value of the goods. The redemption fine was reduced from Rs. 15 lakhs to 7.5 lakhs, and the penalties on the appellant firm and its Director under Sections 112(a) and 114A were set aside, except for the equivalent penalty under Section 114A, which was upheld due to clear mis-declaration.

3. Assessment of assessable value and duty demand:
The Tribunal differentiated the present case from legal precedents cited by the appellant, emphasizing the specific circumstances and the appellant's admission to undervaluation. The market survey conducted to determine the assessable value was deemed valid, and the appellant's agreement to the valuation and payment of duty were considered binding. The Tribunal also allowed re-export of the confiscated toys and adjusted the redemption fine based on the value of the goods, ensuring a fair and proportionate penalty assessment.

This comprehensive analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's reasoning behind the decision, ensuring a detailed understanding of the case.