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2007 (8) TMI 122 - AT - CustomsAgreement copy not produced by at time of import shows facts were suppressed regarding valuation. Hence confiscation, interest are upheld Once the scheme is approved by State Govt. for power project, benefit of exemption Not. 21/02 can not be denied mere on delay in producing end-use certificate
Issues Involved:
1. Valuation of imported Hot Gas Path Parts. 2. Denial of benefit of exemption Notification No. 21/2002-Cus. dated 1-3-2002. 3. Invocation of the longer period for demand. 4. Confiscation of goods and imposition of penalties. Detailed Analysis: 1. Valuation of Imported Hot Gas Path Parts: The appellants imported Hot Gas Path Parts from M/s. GE, USA under the Long Term Assured Parts Supply Agreement (LTAPSA). The Department alleged undervaluation of these parts, arguing that the declared value did not represent the true transaction value. The appellants contended that the values were based on GE's published prices under the Rotable Exchange Programme, which is recognized internationally. The Tribunal held that the declared value was not the transaction value because no payment was made according to the declared value. The value in the commercial invoice represented only the incremental value over the returned parts. The Tribunal upheld the re-determination of the assessable value by adding the value of the returned parts, which was approximately one-third of the value of the imported parts under the Rotable Exchange Programme. This re-determination was done under Rule 8 of the Customs Valuation Rules, 1988, as the declared value did not represent the true value for customs purposes. 2. Denial of Benefit of Exemption Notification No. 21/2002-Cus. dated 1-3-2002: The appellants claimed exemption under Notification No. 21/2002-Cus for goods imported for renovation or modernization of a power generation plant. The Department denied the exemption, arguing that the required certificates were not produced at the time of import and that the goods were for upkeep rather than renovation. The Tribunal found that the appellants had subsequently obtained the necessary certificates from the competent authorities, certifying that the goods were essential for the renovation of the power plant. The Tribunal held that once the competent authority certified the need for renovation, the Customs Department should not deny the exemption based on semantic differences. Therefore, the Tribunal set aside the denial of the exemption and upheld the appellants' entitlement to the benefit of the notification. 3. Invocation of the Longer Period for Demand: The Department invoked the longer period for demand, alleging suppression of facts by the appellants, including not disclosing the LTAPSA and the nature of the Rotable Exchange Programme. The Tribunal agreed with the Department, stating that the appellants had not provided the Agreements to Customs at the time of import and had not informed Customs about the specific terms of the LTAPSA. This non-disclosure amounted to suppression of facts, justifying the invocation of the longer period for demand. 4. Confiscation of Goods and Imposition of Penalties: The Commissioner ordered the confiscation of the goods under Section 111(m) and imposed penalties under Section 114A of the Customs Act, 1962. A penalty was also imposed on Shri Siddharth Deb, Associate General Manager of the appellant company. The Tribunal upheld the order of confiscation and the imposition of interest under Section 28AB. However, considering the facts and circumstances, the Tribunal reduced the penalty under Section 114A to Rs. 40,00,000/-. The penalty on Shri Siddharth Deb was set aside, considering that the penalty on the appellant company was adequate. Conclusion: 1. The re-determination of the assessable value under Rule 8 of the Customs Valuation Rules, 1988, and the consequent demand of differential duty of Rs. 4,20,31,824/- was upheld. 2. The demand of Rs. 3,16,56,697/- was set aside, granting the benefit of Notification No. 21/2002-Cus. dated 1-3-2002. 3. The penalty under Section 114A was reduced to Rs. 40,00,000/-. 4. The order of confiscation under Section 111(m) and the imposition of interest under Section 28AB were upheld. 5. The penalty on Shri Siddharth Deb was set aside.
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