2017 (6) TMI 881 - AT - Customs

Valuation - imported colour TV panels - It appeared to revenue that as per the examination reports, the goods under declaration vide bills of entry were mis-declared with regard to description, models, specifications other parts, and therefore, value - whether the learned Commissioner have rightly rejected the declared value and revalued the same under Rule 12 of customs valuation Rules 2007? - whether the goods in question have been rightly held to be liable to confiscation with option to redeem by payment of redemption fine and further the penalty imposed of Rs. Eight lakhs under Section 112 (a) of the Act have been rightly imposed? Held that - there is no test report obtained by learned Commissioner from any approved Laboratory or Government Laboratory and in such circumstances the revaluation done appears to be untenable - reliance placed upon the opinion of Samsung India Electronic Private Limited and Sony India Private Limited who are not the approved Government Labs or valuer and at the same time are the competitors of the appellant in manufacturing and import of TV panels and colour Tvs, selling and marketing the same in India - the impugned order is vitiated and fit to be set aside. The learned Commissioner will have the sample of goods tested or valued by an approved valuer or from the Government Lab/Chartered Engineer, and as per the opinion of such competent laboratory or engineer etc., the valuation shall be finalized in accordance with the Valuation Rules, 2007. Appeal allowed by way of remand.

Issues Involved:
1. Rejection and revaluation of declared value under Rule 12 of Customs Valuation Rules, 2007.
2. Liability of goods to confiscation with an option to redeem by payment of redemption fine.
3. Imposition of penalty under Section 112(a) of the Customs Act, 1962.

Detailed Analysis:

1. Rejection and Revaluation of Declared Value:
The primary issue was whether the Commissioner rightly rejected the declared value of imported LED TV panels and revalued them under Rule 12 of the Customs Valuation Rules, 2007. The appellant had filed warehousing bills of entry for Samsung/Sony LED TV panels from Thailand. Discrepancies were found during examination, such as mismatched model numbers, undeclared curved models, and additional parts like motherboards and table stands. The revenue suspected misdeclaration and undervaluation, prompting them to seek import prices from Samsung and Sony. Samsung indicated that the goods were not bare panels but complete TV sets with additional parts, while Sony provided specific FOB prices for certain models. The Commissioner concluded that the declared value was liable for rejection due to misdeclaration and revalued the goods by adding the value of panels, additional parts, and assembly charges.

2. Liability of Goods to Confiscation:
The Commissioner held that the goods were liable to confiscation due to misdeclaration. The appellant argued that the declared value was the transaction value under customs rules and that minor discrepancies should not influence the price. However, the Commissioner found deliberate misdeclaration with the intent to evade duty, leading to the conclusion that the goods were neither mere LED panels nor complete TVs but were fitted with additional parts. Consequently, the goods were considered liable for confiscation with an option to redeem by paying a fine.

3. Imposition of Penalty:
The Commissioner imposed a penalty of Rs. Eight lakhs under Section 112(a) of the Customs Act, 1962, citing deliberate misdeclaration to evade duty. The appellant contended that there was no misdeclaration and that the goods were correctly declared as LED panels with additional parts included in the price. The Commissioner, however, determined that the misdeclaration warranted the penalty.

Judgment and Directions:
The Tribunal found that the Commissioner relied on opinions from Samsung and Sony, who were not approved government labs or valuers and were competitors of the appellant. There was no test report from any approved laboratory, making the revaluation untenable. The Tribunal allowed the appeal by remanding the case with directions:

1. The imported consignment should be released provisionally, retaining samples for testing, subject to the appellant furnishing a bond for the revalued amount and a bank guarantee for each bill of entry.
2. The Commissioner should have the samples tested or valued by an approved valuer or government lab/chartered engineer. The valuation should be finalized based on the competent laboratory's opinion, allowing the appellant to file objections before passing a reasoned order.

The appeal was allowed by way of remand with these directions.

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