2016 (12) TMI 516 - AT - Customs

Anti Dumping duty - import of tiles - mis-declaration of goods to evade duty - classified under heading 6908.90.90 as glazed ceramic tiles? - Whether the appellant had misdeclared the goods so as to make them liable for confiscation under Section 111(m) of the Customs Act and consequent penalty thereof? - whether the appellant is required to declare the MRP of the goods when they are imported for personal use? - Held that - the order of the adjudicating authority of assessment to bill of entry by charging anti-dumping duty is correct and does not require any interference. Since there was misdeclaration, we hold that the goods are liable for confiscation. However, the adjudicating authority has imposed redemption fine of ₹ 9,00,000/- as against CIF value of approximately ₹ 22 lakhs which, in our considered view, is disproportionate. Ends of justice will be met if redemption fine is reduced to ₹ 5,00,000/- from ₹ 9,00,000/-. The appellant is required to discharge this redemption fine. As regards penalty imposed on this issue, we find that the penalty is also excessive and disproportionate. Accordingly, we reduce the penalty from ₹ 5,00,000/- to ₹ 2,00,000/- and order accordingly. As regards the CVD payable based upon MRP, we find that the adjudicating authority has totally erred in coming to such conclusion. First and foremost, we find that in the case of imported goods, the MRP has to be declared by the importer if there is going to be resale of the goods. In the case in hand, it is undisputed that the tiles which were imported were to be used by the appellant for their personal use. On this factual matrix, we find that CVD discharged by the appellant based upon the declared value customs duty is correct and does not require any interference. Further, we find that the adjudicating authority has arrived at MRP in a very unorthodox manner of calculating the same as 2.5 times of the CIF value of the consignment. There is no rationale behind such arrival of the MRP. In view of this, the findings of the adjudicating authority that CVD has to be paid on MRP determined seems to be incorrect and is liable to be set aside and we do so. The appeal of the appellant as regards the discharge of CVD based upon MRP basis calculated is allowed while the appeal of the appellant on the setting aside of redemption fine and penalty and anti-dumping duty is rejected subject to modification - appeal disposed off - decided partly in favor of appellant-assessee.

Summary

Issues:
1. Misdeclaration leading to confiscation under Customs Act and penalty
2. Declaration of MRP for imported goods meant for personal use

Analysis:

Issue 1: Misdeclaration and Confiscation
The appellant imported glazed vitrified porcelain tiles from UAE but declared them as glazed ceramic tiles under heading 6908.90.90, leading to a misdeclaration. The goods attracted anti-dumping duty under Notification No. 73/2003-Cus. The adjudicating authority held the misdeclaration as an attempt to evade duty, leading to confiscation under Section 111(m) of the Customs Act, 1962. The Tribunal agreed with the authority's findings, stating that the liability to pay anti-dumping duty arose due to the misdeclaration. However, the Tribunal found the redemption fine imposed to be disproportionate and reduced it from ?9,00,000 to ?5,00,000. Similarly, the penalty was deemed excessive and reduced from ?5,00,000 to ?2,00,000.

Issue 2: Declaration of MRP for Personal Use Goods
Regarding the declaration of Maximum Retail Price (MRP) for imported goods meant for personal use, the Tribunal disagreed with the adjudicating authority's decision to charge Countervailing Duty (CVD) based on MRP. The Tribunal clarified that MRP declaration is necessary only if the goods are intended for resale, not for personal use. The authority's calculation of MRP as 2.5 times the CIF value was deemed incorrect and unjustified. Therefore, the Tribunal set aside the requirement to pay CVD based on MRP and upheld the appellant's right to discharge CVD based on the declared value plus customs duty.

In conclusion, the Tribunal allowed the appeal on the issue of CVD calculation based on MRP, while rejecting the appeal on setting aside redemption fine, penalty, and anti-dumping duty, with modifications to the fines and penalties imposed.

Judgment Date: 1st December 2016