2019 (9) TMI 1525 - AT - Customs

Valuation of imported goods - SMPS Power Supply Board used for controlled power supply in Set Top Box - MPEG-2 Card used as main board of Set Top Box - rejection of declared value - redetermination of value - demand of differential duty - redemption fine - penalty - HELD THAT - The imported goods are electronic printed circuit board. A layman will not be able to decide the nature of the product and the possible use for such products by casual inspection. Reference to the website cannot only be the basis for loading of the value of the imported goods and demanding differential duty. The goods lying in the Customs charge need to be examined and a suitable expert opinion obtained as to the nature of the goods. Power Supply for DTH - HELD THAT - The Investigating Agency has concluded that the imported goods were SMPS Power Supply Board used for control power supply . The appellants contention is that these are meant for Free to Air Set Top Box used for receiving unencrypted broad-cast signals. In this case also a layman will not be able to decide the nature of the product and possible use for such product. Reference to website cannot be the only basis for loading the value of the imported goods and demanding differential duty. The goods lying in the Customs charge need to be examined and a suitable expert opinion as to the nature of the goods. Therefore proper valuation of the goods is required to be re-determined in the light of Section 14 of the Customs Act 1962 read with the Customs Valuation Rules 2007. The impugned order is set aside and the issue is remanded to the adjudicating authority for passing a denovo order after getting the goods examined by an expert for taking opinion as to the exact nature of the goods. Such expert opinion as well as the basis for re-determination of value should be shared with the appellant and an opportunity should be given for rebuttal of the same - Appeal allowed by way of remand.

Issues Involved:

1. Rejection of declared value and re-determination of the same.
2. Imposition of redemption fine and penalties.
3. Correct description and valuation of imported goods.
4. Examination and expert opinion on the nature of the goods.
5. Justification of the value adopted by the Revenue.
6. Use of website references for valuation.
7. Opportunity for rebuttal by the appellant.

Issue-wise Detailed Analysis:

1. Rejection of Declared Value and Re-determination of the Same:

The Commissioner of Customs (Port), Kolkata rejected the declared value of the imported electronic items and re-determined the same. The DRI conducted an investigation and compared the declared values with NIDB data for contemporaneous import prices, leading to the re-determination of the assessable value. The adjudicating authority rejected the declared assessable value under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rule 2007 and re-determined the value of three items at ?3,40,62,396/- under Rule 9 of the Customs Valuation Rules, 2007.

2. Imposition of Redemption Fine and Penalties:

The adjudicating authority imposed a redemption fine of ?17.00 Lakhs and ?16.00 Lakhs under section 125 of the Customs Act, 1962, for the goods imported under B/E No. 3429617 and B/E No. 2740311, respectively. Additionally, a differential duty of ?1,40,46,168/- was demanded, and penalties were imposed on the importer under section 114A and on individuals under section 114AA of the Customs Act, 1962.

3. Correct Description and Valuation of Imported Goods:

The DRI's investigation revealed discrepancies in the description and value of the imported goods. Items declared as "Main PCB for DVB with connector" and "MPEG Card" were found to be "MPEG-2 Card" and "MPEG-2 Card with USB Port connectivity," respectively. The DRI ascertained the correct value of the goods by referring to NIDB Data for contemporaneous import prices. The valuation of the consignments was adjusted accordingly.

4. Examination and Expert Opinion on the Nature of the Goods:

The Tribunal emphasized that a layman cannot determine the nature and possible use of electronic printed circuit boards by casual inspection. It was noted that reference to a website cannot solely be the basis for loading the value of the imported goods and demanding differential duty. The Tribunal directed that the goods lying in Customs’ charge need to be examined, and a suitable expert opinion should be obtained to ascertain the exact nature of the goods.

5. Justification of the Value Adopted by the Revenue:

The appellant contested the value adopted by the Revenue, arguing that the goods imported by them were meant for DTH (Direct to Home Application) and should merit a significantly lower value. The Tribunal observed that the declared value of "SMPS Power Supply Board" in B/E 2740311 was much lower than those declared in B/E 3429617, indicating a possible mis-declaration of value.

6. Use of Website References for Valuation:

The Tribunal found that the reference to the website "Alibaba.com" by the Revenue for re-determining the value was not substantiated by evidence of actual importation at the referred website value. It emphasized that website references alone cannot be the basis for loading the value of imported goods.

7. Opportunity for Rebuttal by the Appellant:

The Tribunal directed that the adjudicating authority should share the expert opinion and the basis for re-determination of value with the appellant and provide an opportunity for rebuttal. The issue was remanded to the adjudicating authority for passing a de novo order after obtaining an expert opinion on the nature of the goods.

Conclusion:

The Tribunal set aside the impugned order and remanded the issue to the adjudicating authority for a de novo adjudication. The adjudicating authority was directed to complete the process within one month, ensuring that the expert opinion and the basis for re-determination of value are shared with the appellant, allowing for rebuttal. The operative part of the order was pronounced in the open Court.

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