2017 (2) TMI 134 - AT - Customs

Undervaluation of the goods imported - ICs, transistors etc. - Held that - the respondents have produced documentary evidence of contemporaneous imports by other importer, which was verified by him and he noticed the value declared by the respondent were consistent with value declared by others; adjudicating authority correctly records that statements lacks credibility due to contemporaneous evidence, we agree this findings - even if assuming that the statements are to be relied, and there was undervaluation, the provisions of Customs Valuation Rules needs to be followed which would mean that Rule 5 & Rule 6 of the Valuation Rules needs to be applied which contemplates for the application of contemporaneous value; which adjudicating authority has done so, we have no hesitation in upholding the findings of the adjudicating authority. The impugned order is correct, legal and does not suffer from any infirmity - appeal rejected - decided against revenue.

Summary

Issues:
Undervaluation of imported goods

Analysis:
The judgment involves three appeals that raise a common question of law regarding the undervaluation of imported goods. The respondent imported electronics items like ICs and transistors and cleared them on the declared value. The Department of Revenue initiated an investigation based on information received, suspecting undervaluation. The investigation included a search of the premises and recording of statements from the proprietors admitting undervaluation. Show-cause notices were issued for rejection of declared value and demanding differential duty. The adjudicating authority dropped the proceedings due to lack of corroborative evidence and the respondent's ability to produce contemporaneous import values lower than the declared value, as per Customs Valuation Rules.

The Departmental Representative argued that the confessional statements should be relied upon for re-determining the value, citing a previous tribunal decision. However, the respondent's counsel contended that the adjudicating authority was correct in dropping the proceedings as the respondent provided contemporaneous import values and adhered to Customs Valuation Rules. The counsel referenced legal precedents to support their argument, emphasizing the importance of transaction value and supporting evidence for statements made before Customs Authority.

After considering the submissions and records, the Tribunal found that the main issue was the undervaluation of the imported goods. The undisputed facts were that the respondents declared transaction values for ICs and transistors, which were accepted for clearance. The Department's opposition was solely based on the proprietors' admission of undervaluation without supporting evidence. The Tribunal noted the lack of supporting evidence from the Department and upheld the adjudicating authority's decision to drop the proceedings.

The Tribunal agreed with the adjudicating authority's findings that the respondent's produced evidence of contemporaneous imports by other importers, consistent with their declared values. The Tribunal also supported the application of Customs Valuation Rules, specifically Rule 5 and Rule 6, for determining value based on contemporaneous evidence. Ultimately, the Tribunal held that the impugned order was correct, legal, and without any infirmity, rejecting the Revenue's appeals as devoid of merits.