2017 (5) TMI 27 - AT - Customs

Mis-declaration of goods - denial of benefit of N/N. 6/2002-Cus. dt. 1.3.2002 - appellant declared the goods as Shima Seiki Fully Fashioned High Speed Glove Knitting Machine . But that was ultimately found by the Textile Commissioner to be old and used Shima Seiki Glove Knitting Machines - Held that - The goods came without proper accompanying documents - Misdeclaration of description of the goods was apparent when Discharge Port Chartered Engineer physically examined the goods in the presence of appellant. He valued the goods systematically which remained unrebutted stating any logical reason by the appellant. Such material on record proved misdeclaration of the goods on both count. There was undue claim of notification benefit - appeal is liable to be dismissed and misdeclaration of description of goods has also crippled the appellant to get notification benefit - decided against appellant.

Summary

Issues: Misdeclaration of goods description and value, denial of exemption benefit, application of Customs Valuation Rules, imposition of redemption fine, imposition of penalty

The judgment by the Appellate Tribunal CESTAT Chennai involved several key issues. Firstly, the appellant had declared imported goods as "Shima Seiki Fully Fashioned High Speed Glove Knitting Machine," but the Textile Commissioner found them to be "old and used Shima Seiki Glove Knitting Machines." Secondly, there was a discrepancy in the declared value of the goods, with the appellant declaring ?70,44,750 while a Chartered Engineer valued them at ?96,11,105 upon physical examination. Thirdly, the appellant claimed exemption under a customs duty notification, which was denied as the imported goods did not meet the notification conditions.

The Tribunal noted that a show cause notice was issued to the appellant regarding the misdeclaration of goods description and value, leading to the invocation of Rule 10A of the Customs Valuation Rules, 1988. The adjudicating authority passed an order based on the evidence provided, including the physical examination results and the failure of the appellant to rebut the allegations.

Upon hearing both sides and examining the record, the Tribunal found that there was indeed misdeclaration of goods description and value. The Discharge Port Chartered Engineer's examination supported this finding, as the goods were not as declared by the appellant. The adjudicating authority correctly applied the valuation rules to determine the assessable value, considering contemporaneous imports and the lack of evidence from the appellant to support their declaration.

Regarding the redemption fine and penalty imposed, the Tribunal upheld the authority's decisions. The determination of the redemption fine was based on a scientific basis provided in the adjudicating authority's order, and the penalty of ?7 lakhs was deemed reasonable considering the gravity of misdeclaration and the attempt to benefit unduly from exemptions.

In conclusion, the Tribunal dismissed the appeal entirely, upholding the findings related to misdeclaration of goods, denial of exemption benefit, application of valuation rules, redemption fine, and penalty. The judgment emphasized the importance of accurate declaration and compliance with customs regulations to prevent fraudulent activities.