2016 (12) TMI 1157 - AT - Customs

Confiscation and penalty - mis-declaration of value of goods - evasion of duty - import of Pioneer brand automobile speaker - Held that - reliance placed on the decision of the case of Mytri Enterprises Vs. Commissioner of Customs, Mumbai 2004 (7) TMI 182 - CESTAT, MUMBAI where the value of same pioneer brand speakers was enhanced on the basis of same quotation of traders of Dubai and prices available on the website - In the present case also same quotation and prices available on websites were relied upon therefore decision of Mytri Enterprises directly applicable to the facts of the present case - it was held in the case that the Custom Officer has rightly rejected the price of speakers imported by the appellant as declared in the Bill of Entry, applying Rule 10A of the Valuation Rules. We are also satisfied that in such an eventuality, the prices which are fixed is based on concurrent findings of facts. From the above judgments it can be observed that products are identical i.e. Pioneer brand speakers, the facts such as product specification, declared price, enhanced price, evidences such as quotation, price available on website etc. are identical therefore aforesaid judgment is directly applicable in the present case. Taking into consideration the overall facts and aforesaid judgment, we are of the view that lower authorities have rightly enhanced the value and confirmed the differential duty. Since the appellants deliberately suppressed the value by mis-declaring, the goods were liable for confiscation. Though the redemption fine was not imposed, for purpose of imposition of penalty, availability of the goods which was liable for confiscation is not necessary, therefore penalty was rightly imposed in lieu of confiscation. Since differential duty rightly confirmed under proviso to Section 28 (1) of the Customs Act, penalty imposed under Section 114A is inevitable. As per our above discussion and the settled legal position, the impugned orders are upheld and appeals are dismissed. Appeal No. C/1349/05 - appeal of Star Audio - stands abated for the reason of demise of proprietor of the said firm.

Summary

Issues Involved:
1. Mis-declaration and under-invoicing of imported goods.
2. Enhancement of the value of imported goods based on external sources.
3. Validity of quotations and market prices as evidence.
4. Reopening of final assessments.
5. Denial of cross-examination and principles of natural justice.
6. Imposition of penalties and confiscation.

Detailed Analysis:

1. Mis-declaration and Under-invoicing of Imported Goods:
The appellants imported Pioneer brand automobile speakers from various countries including China, Thailand, Japan, Malaysia, Korea, and Mexico. The goods were supplied by dealers from Dubai, Hong Kong, and Singapore. Upon physical examination and market survey, it was found that the appellants had grossly mis-declared and under-invoiced the value of the imported speakers to evade customs duty. The investigation revealed that the declared prices were significantly lower than the actual market prices.

2. Enhancement of the Value of Imported Goods Based on External Sources:
The value of the imported speakers was enhanced based on contemporaneous imports and market surveys, including quotations from dealers in Dubai and prices obtained from various websites. The adjudicating authority confirmed the differential duty under Section 28(1) of the Customs Act, 1962, and imposed interest under Section 28AB. The appellants argued that the quotations were outdated and unreliable, and that the value had already been enhanced at the time of clearance based on NIDB data.

3. Validity of Quotations and Market Prices as Evidence:
The appellants contended that the quotations relied upon by the revenue were unsigned and received by fax, making their authenticity doubtful. They also argued that the quotations were obtained six months before the import, and electronic goods prices can decrease rapidly. The adjudicating authority, however, found consistency in the prices mentioned in the quotations and those available on websites, and concluded that the declared prices were substantially lower.

4. Reopening of Final Assessments:
The appellants argued that the Bill of Entry had been finally assessed at the time of clearance, and the final assessment could not be reopened without filing an appeal. The Tribunal held that if fresh evidence is unearthed after the assessment, the revenue is within its legal authority to issue a show cause notice demanding differential duty under Section 28. Therefore, the enhancement of value based on new evidence was permissible.

5. Denial of Cross-examination and Principles of Natural Justice:
The appellants sought cross-examination of the officers who obtained the quotations, which was denied, leading to a claim of violation of natural justice. The Tribunal noted that the appellants had the opportunity to demolish the quotations by producing evidence in their favor but did not avail themselves of it. The Tribunal found no violation of natural justice in this regard.

6. Imposition of Penalties and Confiscation:
Penalties were imposed under Section 111(m) and Section 114A of the Customs Act for mis-declaration and evasion of duty. The appellants argued that penalties in lieu of confiscation were not sustainable as the goods were not available for confiscation. The Tribunal upheld the penalties, stating that the availability of the goods is not necessary for imposing penalties in lieu of confiscation. The Tribunal also upheld the differential duty and penalties imposed by the lower authorities.

Conclusion:
The Tribunal dismissed the appeals, except for the appeal of Star Audio, which stood abated due to the demise of the proprietor. The Tribunal upheld the enhancement of value, confirmation of differential duty, and imposition of penalties based on the findings of mis-declaration and under-invoicing by the appellants. The Tribunal relied on the consistency of the evidence from quotations and market prices, and the legal authority to reopen assessments based on new evidence.