2015 (12) TMI 786 - AT - Customs

Valuation - Undervaluation of goods - Import of old and used tyres - Held that - 24 excess pieces of tyres cannot be held to be a mala fide misdeclaration in the quantum of tyres when the total number was more than 2500 pieces. As regards valuation, we find that the appellant having declared the transaction value, it was for the Revenue to rebut the same by production of evidence. The Appellate Authority has already observed that there is virtually no contemporaneous imports as no details are given. Otherwise also, we find that two different imports of old and used items can never be identical inasmuch as the value of the same would depend upon the number of factors including the usage years as also the condition of the goods. The Appellate Authority has rejected the transaction value by observing that the appellant has not produced any evidence to substantiate the same. We find no merits in the above reasonings of the Commissioner (Appeals). The appellant having produced the invoice, in support of its declared value, has done his part of the duty. If the Revenue is not happy with the said declared transaction value, it is they who have to produce the evidence. There being none in the present case, we find no reasons to enhance the assessable value. - Redemption fine and penalty is reduced - Decided in favour of assessee.

Summary

Issues:
1. Importation of restricted goods without a license
2. Valuation of imported goods
3. Confiscation of goods
4. Redemption fine and penalty imposition

Analysis:
1. The case involved the importation of old and used tires without the required license, leading to non-clearance by Customs due to the absence of the license. Additionally, discrepancies in the declared quantity of tires were noted, with the actual number exceeding the declared quantity. This raised issues regarding the importation of restricted goods and the need for a license under the Foreign Trade Policy.

2. Subsequently, proceedings were initiated against the appellant for proposing enhancement of the value of the imported goods based on contemporaneous imports, along with charges of misdeclaration in quantity, undervaluation, and non-production of the license. The original adjudicating authority passed an order establishing misdeclaration in quantity, non-production of the license, and enhanced the value of the goods. The Commissioner (Appeals) upheld the violation of the Foreign Trade Policy provisions but disagreed with the appellant on valuation, citing the lack of evidence to support the transaction value declared by the appellant.

3. The order resulted in the confiscation of goods with an option for redemption on payment of a fine and imposition of a penalty. The appellant then appealed against the order, arguing against the enhancement of value and seeking a reduction in the redemption fine and penalty due to the violation of the Foreign Trade Policy.

4. The appellate tribunal considered the negligible quantity variation of excess pieces of tires and found that the appellant had declared the transaction value, shifting the burden to the Revenue to provide evidence to rebut it. The tribunal noted the lack of contemporaneous imports and the inherent differences in value for old and used items based on various factors. As the Revenue failed to produce evidence to challenge the declared value, the tribunal set aside the enhancement of the assessable value. However, acknowledging the admitted violation of the Foreign Trade Policy, the tribunal reduced the redemption fine and penalty while upholding the confiscation of goods. The appeal was disposed of with modifications to the impugned order.