2017 (4) TMI 1201 - AT - Customs

Imposition of redemption fine and penalty - Section 112(a) of the CA, 1962 - valuation - the quantity and description of the goods differ from invoice produced by the party - case of appellant is that Mere presumption of investigating officer without considering the value of contemporaneous import is not a reason to allege undervaluation - Held that - There is no material on record to show that the appellant has suppressed the material facts from the customs authorities - Further, in similar circumstances, the customs has loaded the price but did not impose any redemption fine and penalty - appeal allowed - decided in favor of appellant.

Summary

Issues:
Imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962 based on alleged undervaluation of imported goods.

Analysis:
The appeal was filed against the order imposing a redemption fine of ?3 lakh and a penalty of ?2 lakh on the appellant under Section 112(a) of the Customs Act, 1962. The appellant had filed a bill of entry for clearance of imported goods, including perfume, deodorants, shampoo, and cosmetics, with a declared invoice value of 22,370.10 USD. Customs officers intercepted the consignments based on suspicion of undervaluation, leading to a detailed examination that revealed discrepancies between the declared goods and the actual quantity and description. A Chartered Engineer valued the goods at ?94,54,419, resulting in a re-determination of value and issuance of a show-cause notice proposing confiscation and penalties. The adjudicating authority enhanced the value, leading to the appeal. The Tribunal found the Chartered Engineer's valuation incorrect and remanded the matter for fresh decision. Upon reassessment, the adjudicating authority determined the assessable value at ?18,22,769 and imposed a fine and penalty, which the appellant challenged in the present appeal.

The appellant argued that the imposition of fine and penalty lacked legal basis, as there was no cogent evidence of undervaluation, and customs should have accepted the price actually paid unless proven otherwise. The appellant cited previous cases where higher values were assessed but no fine or penalty was imposed. Reference was made to a case from the Hon'ble CESTAT, Kolkata, where redemption fine and penalty were set aside in a similar scenario. The AR, however, supported the findings of the impugned order.

Upon review, the Tribunal noted that the appellant had accepted the loaded price by customs without suppressing any material facts. Comparing with similar cases where no fines or penalties were imposed despite higher values assessed, and considering the precedent from the Kolkata Bench, the Tribunal concluded that the imposition of fine and penalty in the present case was unjustified. Consequently, the Tribunal allowed the appeal, setting aside the fine and penalty with any consequential relief.

In the final judgment pronounced on 21/03/2017, the Tribunal ruled in favor of the appellant, overturning the imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962, based on the alleged undervaluation of imported goods.