2015 (11) TMI 948 - AT - Customs

Valuation - import of rerollable steel scrap - Enhancement in value - Imposition of redemption fine & Penalty - Held that - Invocation of Rule 5 of the Valuation Rules is not justified in the present case because, in order to prove that the goods are similar, it is required to ascertain that the country of origin is same in case of comparable goods with the goods relevant for assessment. In the case in hand, the country of origin was Sharjah- UAE , whereas in the bill of entry dated 7.2.2013 referred to in the adjudication order, the originating country was different. Thus, the goods cannot be considered as similar. Further payment of duty by the appellant at the enhanced rate without contesting the enhanced duty liability, was due to avoidance of demurrage and detention charges of the vessel. Such payment cannot prove under-valuation of goods for the purpose of imposition of redemption fine and penalty, especially in view of the fact that the onus vest with the customs department has not been satisfactorily discharged. - import documents available in the file prove bonafides of the appellant, the genuineness of which have not been disputed by the Department, I am of the view that imposition of redemption fine and personal penalty on the appellant is not justified. Thus the impugned order imposing redemption fine and personal penalty is set aside - Decided in favour of assessee.

Summary

Issues:
Imposition of redemption fine and personal penalty on imported goods declared as rerollable steel scrap; Classification and valuation aspect of the imported goods; Dispute regarding goods being rerollable steel scrap or H Beams.

Analysis:
The judgment revolves around the imposition of redemption fine and personal penalty on the imported goods that were declared as rerollable steel scrap. The appellant imported a consignment of steel scrap through ICD Port, Ludhiana, and filed a bill of entry for clearance. Customs Authorities rejected the declared value of USD 392 PMT and determined it at USD 450 PMT based on an investigation, leading to confirmation of duty liability and imposition of redemption fine and personal penalty. The appellant contested the fine and penalty but not the duty liability.

The appellant argued that the goods were rerollable steel scrap, supported by import documents and a certificate from an inspection agency. They highlighted that the Customs Authorities did not dispute the import documents' descriptions. The appellant emphasized that the nature of goods should be verified by experts in the field of metallurgy, not by Appraising Officers. The appellant cited various tribunal decisions to support their stance.

On the other hand, the Respondent contended that the goods were H Beams, not rerollable steel scrap, based on physical examination at the port and classification guidelines. The Respondent justified invoking Rule 5 of the Customs Valuation Rules, 2007, due to alleged misdeclaration by the appellant. The Respondent argued that the appellant's payment of assessed duty without protest indicated acceptance of the classification change, justifying the fine and penalty.

The Tribunal analyzed the evidence, noting that import documents and inspection agency certification supported the appellant's claim of importing rerollable steel scrap. The Tribunal emphasized that the Customs Authorities did not engage an expert for goods inspection and did not question the import documents' authenticity. The Tribunal cited precedent to support that classification cannot be changed without rebutting import documents. The Tribunal found the invocation of Rule 5 unjustified due to discrepancies in the country of origin and the appellant's duty payment rationale.

Ultimately, the Tribunal ruled in favor of the appellant, setting aside the redemption fine and personal penalty. The judgment emphasized the importance of genuine import documents, lack of expert verification, and the appellant's bonafide actions in paying the duty to avoid additional charges as factors leading to the decision.

This comprehensive analysis covers the issues of redemption fine and personal penalty imposition, classification and valuation aspects, and the dispute over the nature of the imported goods, providing a detailed breakdown of the arguments and the Tribunal's decision.