2017 (1) TMI 210 - AT - Customs

Valuation - Misdeclaration of the quantity of goods iron buttons and fittings and the value thereof - value of goods enhanced based on contemporaneous imports value - whether enhancement of value sustainable? - Held that - reliance placed on the decision of the case of Punjab Processors Pvt. Ltd. vs. CC, 2003 (9) TMI 86 - SUPREME COURT OF INDIA , where it was held that customs authorities while assessing value of imports, are not bound by the figures mentioned in the invoice and can rely on contemporaneous evidence to show that the invoice value is not correct - enhanced value justified - appeal rejected - decided against appellant-assessee.

Summary

Issues: Misdeclaration of quantity of goods and their value, rejection of refund claim, reliance on contemporaneous imports, legal validity of enhanced value.

In the judgment by the Appellate Tribunal CESTAT MUMBAI, the appeal was directed against Order-in-Appeal No. 191/2005 (JNCH) dated 26.05.2005. Despite the appellant not appearing for the hearing, the Tribunal proceeded with the disposal of the appeal due to its age. The issue revolved around the misdeclaration of the quantity of "iron buttons and fittings" and the subsequent enhancement of their value by the assessing officer, which was upheld by the first appellate authority based on contemporaneous imports.

The appellant contended that the rejection of the refund claim on a fresh ground was legally flawed, emphasizing their status as a manufacturer exporter of readymade garments and the legitimacy of the transaction value under the REP license. However, the Tribunal noted that the first appellate authority had made a clear finding supported by legal precedents, stating that when goods are misdeclared, the declared value loses validity, and the authorities can enhance the value based on contemporaneous imports. This approach was deemed lawful, citing relevant Supreme Court decisions like CC, Mumbai vs. Shibani Engg. Systems 1996 (86) ELT 453 (SC) and Punjab Processors Pvt. Ltd. vs. CC, 2003 (157) ELT 625 (SC) to support the reliance on contemporaneous evidence over invoice figures.

The Tribunal highlighted that the factual position regarding the misdeclaration was not disputed by the appellant in their appeal memo, leading to the rejection of the appeal for lacking merit. The judgment underscored the legal principle that when goods are found misdeclared, the declared value cannot be relied upon for assessment, and authorities have the discretion to enhance the value based on contemporaneous evidence. The decision reaffirmed the authority's power to reject undervalued declarations and uphold enhanced values in line with legal precedents, ultimately dismissing the appeal due to the absence of substantive grounds for challenge.