2016 (7) TMI 484 - AT - Customs

Misdeclaration and Under-valutation of imported goods - classification - High Speed Steel Scrap Tools - on examination it was found that, consignment consist of three types of items i.e (i) Old & used (Damaged) HSS Tools, (ii) old & used HSS Tools and (iii)New Butt Weld Tools - Levy of penalty - Held that - Lower authorities ignored the second examination report stating that these tools cannot be sold in the market as the new tools price list value, as most of them are non-standard tools and cannot be used on Indian machine. - the impugned Order-in-Appeal & Order-in-Original, are both cryptic and are in violation of principles of natural justice. Accordingly, we set aside the impugned order and allow the appeal. Thus, we hold that the declaration made in the B/E No. 501649 dated 17.07.2009 filed by the appellants, does not suffer from any mis-declaration. The appellant will be entitled to consequential benefit in accordance with law. - Decided in favor of appellant.

Summary

Issues:
Mis-declaration in bill of entry leading to under valuation, confiscation of goods, penalty imposition, appeal rejection by Commissioner (Appeals), absence of appellant during proceedings, consideration of material on record, valuation dispute, second opinion by another valuer, rejection of second report, violation of principles of natural justice.

Analysis:

1. The appellant, a merchant-importer, imported a consignment of "High Speed Steel Scrap" Tools from Dubai and filed a bill of entry seeking clearance under Customs Tariff Heading 7204 29090. The consignment was examined, revealing three types of items with different Fair Market Prices. The description, classification, quantity, and value of items were found to be mis-declared, leading to a show-cause notice proposing enhancement in value, confiscation of goods, and penalty imposition for mis-declaration and undervaluation.

2. The adjudicating authority re-determined the value of goods, ordered re-assessment under Customs Act, and imposed duty along with confiscation and penalties. The appeal was then rejected by the Commissioner (Appeals), leading to the appellant's further appeal before the Tribunal.

3. The Tribunal noted the absence of the appellant during proceedings and proceeded ex-parte. The issue revolved around whether the impugned order ignored material on record in favor of the appellant. The examination by the Chartered Engineer revealed a mixed lot of tools, leading to different valuations for old, used, and new tools.

4. A second opinion from another valuer suggested a different valuation, but the Additional Commissioner adjudicating the show-cause notice ignored this report without assigning reasons. The appellant contended that the consignment consisted of unusable tools, which was confirmed by the second valuer's opinion. The Tribunal found both the Order-in-Appeal and Order-in-Original to be cryptic and in violation of natural justice principles.

5. Consequently, the Tribunal set aside the impugned order, allowing the appeal and determining that the declaration in the bill of entry did not suffer from mis-declaration. The appellant was entitled to consequential benefits as per the law, with directions for the registry to serve a copy of the order on the appellant through the jurisdictional Commissioner.