2017 (3) TMI 912 - AT - Customs

Confiscation of the goods cleared by M/s Spak Exports - non-imposition of penalties on the CHA - Revenue s case is that some importers were utilizing regular import channels for importing various consumer items such as VCD players, Car Stereos, Video Cassettes, for handicam cameras, mobile accessories etc., and declared very low price and also for various contraventions undertaken - rejection of declared value - Held that - the conclusion reached by the adjudicating authority, that the value of the contemporaneous import needs to be applied is incorrect and is not in consonance with law due to there being no details of contemporaneous inputs in the adjudication order. In the absence of contemporaneous import details, we have to hold that the impugned order is unsustainable and liable to be set aside and declared value needs to be accepted. Non-imposition of penalty on the CHA - Held that - none of the ingredients of Section 112(a) is applicable as the adjudicating authority has not confiscated the goods u/s 111 - also the CHA s role in the entire case is not the one which would attract the provisions of Section 112(a) of the CA, 1962 for imposing penalty - imposition of penalty on the CHA is also devoid of merits and rejected. Appeal disposed off - decided in favor of importer and against Revenue.

Summary

Issues:
1. Differential duty demand based on under-valuation of imported goods.
2. Confiscation of goods cleared by the appellant.
3. Non-imposition of penalties on the Customs House Agent (CHA).

Analysis:
The judgment involves three appeals directed against Order-in-Original No. CC-SP-46/2005-Adjn ACC dated 31.12.2005. The appeals include one filed by M/s Spak Exports and two by Revenue concerning the same order. The investigation revealed importers utilizing regular channels for consumer items at low prices, leading to contraventions. The main appellant, Spak Exports, was investigated, and a show-cause notice was issued for demanding differential duty and violation of regulations. The adjudicating authority confirmed the duty, interest, and penalties on the appellant but not on the CHA. The main issue revolved around the under-valuation of goods imported by Spak Exports during a specific period under various Bills of Entry, leading to the rejection of declared values and application of Valuation Rules.

Regarding the under-valuation issue, the adjudicating authority concluded that the declared value needed rejection and applied the Valuation Rules. However, the appellate tribunal found the order incorrect for several reasons. Firstly, the manual filing of Bill of Entry due to technical problems could not be made an issue. Secondly, the determination of assessable value lacked details on the basis for reliance on transaction values of similar goods. Thirdly, the order contradicted itself by considering unbranded goods as similar/identical without technical identification. Due to the absence of contemporaneous import details, the tribunal held the order unsustainable and directed the acceptance of the declared value.

In terms of the appeals by Revenue, the tribunal found them devoid of merit. The appeal concerning non-confiscation of imported goods was disposed of in favor of the main appellant, rendering the appeal irrelevant. Additionally, the appeal against non-imposition of penalties on the CHA lacked merit as the CHA's role did not align with the provisions for penalty under the Customs Act, 1962. Consequently, the tribunal allowed the appeal by M/s Spak Exports and rejected the appeals by Revenue, leading to the restoration of the declared value and the rejection of penalties on the CHA.