2016 (2) TMI 852 - SC - Customs

Valuation of import of equipment - On the basis of this parroted determination of derived value of the imported equipments, the CESTAT further purported to hold that there was alleged undervaluation of the imported equipments by the appellant and, hence the goods were liable to confiscation but was to be allowed to be redeemed on payment of redemption fine of ₹ 2 crores, reduced from ₹ 6.5 crores imposed by the Adjudicating Authority. Held that - Insofar as the order of CESTAT on merits is concerned, we do not find any fault therein. However, at the same time, we are also of the view that there may be some dispute about the actual value to the extent to which there was under-valuation of the imported equipments. The price which was disclosed in the Bill of Entry of the aforesaid equipment was shown as DM 13.5 million. The Department has stated that the price should have been DM 21.27 million. - Without going into the details in this behalf, we are of the view that the ends of justice would be sub-served by reducing the said price to DM 17 million. - Decided partly in favor of assessee.

Summary

Issues:
1. Challenge to Final Order of CESTAT under Section 130E of the Customs Act, 1962.
2. Dispute over actual value and under-valuation of imported equipment.
3. Modification of the order by Supreme Court.

Analysis:

1. The appellant challenged the Final Order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) under Section 130E of the Customs Act, 1962. The CESTAT, upon remand by the Supreme Court, had determined a derived value of imported equipment higher than the declared value, alleging undervaluation by the appellant. The CESTAT directed the Adjudicating Authority to determine customs duties and the differential duty payable by the appellant. Additionally, a redemption fine and penalty were imposed on the appellant under Section 112 of the Customs Act, 1962. The appellant filed an appeal against this order.

2. The Supreme Court, after hearing both parties, found no fault in the CESTAT's order on merits. However, a dispute arose regarding the actual value and the extent of under-valuation of the imported equipment. The Bill of Entry showed a price of DM 13.5 million, while the Department contended it should have been DM 21.27 million. Without delving into detailed calculations, the Supreme Court decided to adjust the price to DM 17 million in the interest of justice. Consequently, the Supreme Court modified the CESTAT's order partially, allowing the appeal in part.

3. Following the modification in Civil Appeal No. 4433 of 2006, the appeal of the Department in Civil Appeal No. 2815 of 2007 was also disposed of in the same terms. The Supreme Court's decision aimed to balance the interests of both parties by adjusting the declared value of the imported equipment, thereby concluding the legal dispute in both appeals.