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2017 (1) TMI 689 - AT - Customs100% EOU - technical collaboration agreement - mis-declaration of goods - undervaluation - suppression of facts - confiscation - penalty - Held that - the learned Commissioner has correctly valued the imported goods on the basis of various rules of valuation as contained in Customs Valuation Rules and he has also come to the conclusion that the method adopted by the Chartered Engineer was fair and reasonable and has taken into consideration all the relevant factors. Further with regard to the intention of the importer to mis-declare the value of the goods, the evidence which has come clearly shows that he has an intention to mis-declare the value and has not rightly declared the value of the imported products - impugned order upheld - appeal dismissed - decided against appellant.
Issues Involved:
1. Assessment of the value of imported goods. 2. Liability of goods for confiscation. 3. Imposition of redemption fine and penalty. 4. Entitlement to duty-free import of secondhand capital goods by a 100% EOU. 5. Validity and acceptance of the Chartered Engineer's certificate. Detailed Analysis: 1. Assessment of the Value of Imported Goods: The Commissioner of Customs assessed the value of the imported goods under Rule 8 of the Customs Valuation Rules, 1998, read with subsection (1) of Section 14 of the Customs Act, 1962. The appellant declared a notional value of USD 10,000, which was found to be incorrect upon inspection, revealing the actual value to be USD 1,94,600. The Commissioner concluded that the declared value did not reflect the true value of the goods, as they were part of a technical collaboration agreement with the supplier, who was a related party. The Commissioner determined the correct assessable value to be ? 40,48,301 based on the Chartered Engineer's assessment. 2. Liability of Goods for Confiscation: The goods were held liable for confiscation under Section 111(m) of the Customs Act, 1962, due to mis-declaration of value and failure to declare the secondhand nature of the goods. The discrepancies in the invoices and the undervaluation indicated an intention to mis-declare the value, making the goods subject to confiscation. 3. Imposition of Redemption Fine and Penalty: The Commissioner provided the option to redeem the confiscated goods on payment of a redemption fine of ? 5 lakh and imposed a penalty of ? 5,000 under Section 112(a) of the Customs Act, 1962. The appellant's mis-declaration and undervaluation justified the imposition of these penalties. 4. Entitlement to Duty-Free Import of Secondhand Capital Goods by a 100% EOU: The appellant argued that as a 100% Export Oriented Unit (EOU), they were entitled to import secondhand capital goods duty-free under Notification No. 52/2003-Cus. The Department did not contest this entitlement. However, the appellant's mis-declaration of the value and nature of the goods negated the benefit of duty-free import, as the declared value was not in accordance with Section 14(1) of the Customs Act, 1962. 5. Validity and Acceptance of the Chartered Engineer's Certificate: The appellant challenged the reliance on the Chartered Engineer's certificate, arguing that it did not justify the value adopted. The Commissioner, however, found the certificate and the method adopted by the local Chartered Engineer to be fair and reasonable. The local Chartered Engineer assessed the value considering the goods' condition and depreciation, arriving at a fair FOB price. The Commissioner upheld this valuation method, rejecting the appellant's contention that the goods were supplied free of charge. Conclusion: The Tribunal upheld the Commissioner's order, affirming the reassessment of the goods' value, the liability for confiscation, and the imposition of redemption fine and penalty. The appellant's appeal was dismissed, confirming the correctness of the Commissioner's valuation under Rule 8 of the Customs Valuation Rules, 1998, and the application of Section 14(1) of the Customs Act, 1962. The Tribunal found no infirmity in the impugned order, which was pronounced in open court on 02/01/2017.
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