2017 (4) TMI 544 - AT - Customs

Undervaluation of goods being automobile parts - Smuggling of goods - seizure of goods after importation and clearance against bill of entry - t NIDB data for the contemporaneous imports reflects higher value of identical goods - Held that - For such purpose, proving the value to be wrong declaration, independent evidence is required and mere reference to NIDB data is not sufficient. It is held by various Courts that NIDB data cannot be made the basis for enhancement of the value. As regards the other goods seized from the premises - On verification of the sellers, the address of the shops etc. shown in the sales challans, were found to be either false or non-existence. - When the appellant was confronted with the said fact, he clearly deposed that the goods were purchased by him from the sales representative and sale was not directly from the shops. The appellant has also produced the sales tax challan along with sales bill on record. This fact establish that the goods stand purchased in India only. As regards their foreign origin and smuggled character, we note that even though the said goods are considered to be imported goods, the same are not notified in terms of provisions of section 123 of the Customs Act. As such, the burden to establish that they are smuggled into India lies heavily on the Revenue and is required to be discharged by production of sufficient evidence. Demand set aside - Decided in favor of assessee.

Summary

Issues:
1. Under-valuation of imported auto parts.
2. Seizure of locally procured goods.
3. Confiscation and penalty imposition.

Under-valuation of imported auto parts:
The appellant imported automobile parts under a Bill of Entry and paid customs duty. Subsequently, the goods were seized on suspicion of under-valuation. The Revenue proposed enhancement of the goods' value, leading to the appeal. The appellant argued that the value was rejected without evidence, solely based on NIDB data. The Tribunal held that mere doubt is insufficient for alleging under-valuation. It emphasized that NIDB data cannot be the sole basis for value enhancement, citing legal precedents. Consequently, the Tribunal found the enhancement unjustified.

Seizure of locally procured goods:
Apart from the imported goods, other goods procured locally were seized. The appellant claimed these goods were purchased locally and produced sales bills and tax returns as evidence. The Revenue doubted the goods' origin due to discrepancies in seller addresses. However, the appellant clarified that purchases were made through sales representatives and not directly from shops. The Tribunal noted the lack of evidence proving the goods were smuggled, especially since they were not notified under the Customs Act. As a result, the confiscation and value enhancement of these goods were deemed unwarranted and unjustified.

Confiscation and penalty imposition:
Given the setting aside of the value enhancement and confiscation, the Tribunal ruled out imposing penalties on the appellant. The appeal was allowed, providing consequential relief to the appellants. The decision was pronounced in open court on 7/4/17.