2014 (12) TMI 69 - AT - Customs

Demand of differential duty - the appellants had not taken into consideration amount on account of dismantling, packing and stuffing - Imposition of penalty - Held that - In view of the permission by the Asstt. Development Commissioner, the value of the goods is within the permitted limit. Hence, we find that there is no case for imposition of penalties. The penalties imposed under the impugned order are set aside and the appeals are allowed - Decided against assessee.

Summary

Issues:
- Imposition of penalty on M/s GKB Vision Ltd.
- Imposition of penalty on Shri K.G. Gupta.
- Consideration of expenses in the value of imported goods.
- Permission by the Asstt. Development Commissioner.

Imposition of Penalty on M/s GKB Vision Ltd.:
M/s GKB Vision Ltd. appealed against a penalty of &8377; 1,50,000 imposed for not considering certain expenses while declaring the value of imported Second Hand Capital Goods. The appellants were permitted to import goods valued at USD 2,48,000 but failed to include an amount of &8377; 23,02,300 for dismantling, packing, and stuffing, leading to the value exceeding the permitted limit. The adjudicating authority ordered re-assessment and allowed the appellants to seek clarification from the Development Commissioner. The Asstt. Development Commissioner later enhanced the value to USD 3,00,000, eliminating the duty demand. The appellants argued it was a genuine mistake and relied on the modified permission. The tribunal found the value within limits post the modification, thus setting aside the penalty.

Imposition of Penalty on Shri K.G. Gupta:
Shri K.G. Gupta appealed against a penalty of &8377; 5,000 for a similar issue of not considering expenses in the declared value of imported goods. The case involved the same facts and permission by the Asstt. Development Commissioner. The tribunal, considering the permission and the value falling within limits post modification, also set aside the penalty imposed on Shri K.G. Gupta.

Consideration of Expenses in the Value of Imported Goods:
The central issue revolved around the failure to include expenses like dismantling, packing, and stuffing in the declared value of imported goods, leading to penalties. The appellants argued it was an inadvertent error, which was rectified through clarification from the Asstt. Development Commissioner, resulting in the value being within permissible limits and eliminating the duty demand.

Permission by the Asstt. Development Commissioner:
The pivotal role played by the Asstt. Development Commissioner's permission in modifying the value of imported goods was crucial in determining the outcome of the case. The tribunal heavily relied on this modified permission to establish that the value was within the permitted limit, thereby justifying the setting aside of the penalties imposed by the adjudicating authority.

This judgment underscores the significance of accurate valuation of imported goods, the role of regulatory authorities in granting permissions, and the importance of seeking clarifications to rectify inadvertent errors in declarations to avoid penalties.