2019 (3) TMI 1724 - AT - Customs

Valuation of imported goods - wood veneers - rejection of declared value - enhancement after revision of the unit price - Confiscation - redemption fine - penalty - HELD THAT - The rejection of the declared value, though challenged by the appellant for lack of evidence of any additional consideration, cannot be faulted in the light of imports effected by others around the same time. Though the impugned order refers to Rule 5 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the enhancement of the assessable value to US 3253 cannot be faulted merely for that reason as Rule 9 permits, consistent with the provisions of the said Rules, resort to best judgment . Error in citing a provision does not alter the substantive findings or the validity of the outcome thereof - the appellant has not been able to produce any evidence that the imports, effected at the value declared by him, reflected the transaction value. It is also noted that the appellant, by letter dated 12th June, 2009, had expressed willingness to consider loading of value to US 2500 per cubic meter. Though such a negotiated determination of assessable value is not envisaged in law, there is acknowledgment of inadmissibility of declared value and the dispute that remains is merely one of quantification. Quantification in the impugned order has relied upon average value which is not inconsistent with best judgment. In view of the unduly low declaration justifying rejection of declared value and from lack of any evidence of circumstances that would appear reasonable, the intention to evade duty by such misdeclaration cannot be discounted. Confiscation of goods under Section 111 of Customs Act, 1962, and imposition of penalty under Section 112, cannot, therefore, be faulted - appeal dismissed - decided against appellant.

Summary

Issues:
Challenge to the upholding of the original authority's order regarding the valuation of imported wood veneers and subsequent confiscation and penalty.

Analysis:
The appellant contested the decision of the original authority, Commissioner of Customs (Appeals), regarding the valuation of imported wood veneers. The appellant imported wood veneers declaring a value of &8377; 2,21,942.91, which was later disputed due to suspicion of undervaluation compared to similar goods imported by others. The Customs Valuation Rules were applied, increasing the value to &8377; 14,61,719.91. Additionally, confiscation of goods was ordered, with an option for redemption on payment of a fine and imposition of a penalty under Section 112 of the Customs Act, 1962. The appellant challenged this order, leading to the present appeal.

The appellant did not appear during the appeal proceedings, and no representation was made on multiple dates. The Authorized Representative highlighted that the value was determined based on the average value of specific quality declared by other importers. The appellant had agreed to accept an enhancement of US $ 2500 per cubic meter, indicating acknowledgment of undervaluation in the bill of entry.

The rejection of the declared value was upheld due to lack of evidence supporting the declared value, especially when compared to imports around the same time. The Tribunal noted that the appellant had waived their right to a show cause notice, which could have provided a framework for adjudication. The appellant failed to produce evidence supporting the transaction value declared by them. Although negotiation of assessable value is not legally recognized, the acknowledgment of the inadmissibility of the declared value was noted. The quantification in the impugned order was based on average value, considered consistent with best judgment.

Given the unduly low declaration and lack of reasonable circumstances supporting the declaration, the Tribunal concluded that the intention to evade duty through misdeclaration could not be ignored. Therefore, the confiscation of goods under Section 111 of the Customs Act, 1962, and the imposition of a penalty under Section 112 were deemed justified. Consequently, the Tribunal found no grounds to interfere with the impugned order and dismissed the appeal.

The judgment was pronounced in court on 19-3-2019 by Shri C.J. Mathew, Member (T) and Ajay Sharma, Member (J).