2017 (9) TMI 8 - AT - Customs

Mis-declaration of imported goods - goods were declared as glass sets, but on verification, a total of 857 cartons of glass sets along with 248 cartons of glass chatons, of different marks and sizes, were found in the container - whether or not there is a violation of provisions of Customs Act on the part of the importer, M/s Parth Corporation? - Held that - The QR code on the packages as well as the manner of storage of, initially undeclared, items (chatons) in the consignment clearly established that M/s Parth Corporation were aware of the contents of the shipment and also under-valuation of the imported goods - the impugned order is sustainable and accordingly we hold that M/s Parth Corporation have violated the provisions of Customs Act by their act of attempted clearance by mis-declaring the import item as well as value, in the bill of entry. Penalty u/s 112 of CA - Held that - We find no supporting evidence recorded in the impugned order to conclude that M/s Pajil & Co. had tried to aid the original importer in execution of wrong high sea sale agreement and had been an active member of this conspiracy - We find no support, by way of evidence, discussed in the impugned order - Entering into high sea sale agreement based on the information provided by the original importer by itself, will not attract the penal provisions of Section 112 unless evidence are available to the effect that such high sea buyer had knowledge of possible undeclared item in the consignment and under-valuation - penalty not sustainable. Valuation of the imported consignment - whether the original authority is right in rejecting the declared value in terms of Rule 12 of the Valuation Rules? - Held that - it is to be noted here that the person behind the import clearly stated that the value declared is not correct and they are agreeable to enhancement of value. In fact, the importer stated that they were willing to pay the differential custom duty, as per enhancement proposed by customs along with the penalty and fine. It is clear, that based on such facts and evidences, that the original authority is correct in invoking Rule 12 for rejection of declared value. Whether or not the original authority followed the provisions of valuation rules for fixing the correct assessable value? - Held that - The rules, which were reproduced in para 14 of the impugned order, clearly stipulate that when the transaction value is fixed either in terms of Rule 4 or Rule 5, if more than one transaction value of such goods is found, the lowest such value shall be used to determine the value of imported goods. The methodology adopted in the impugned order is contrary to the said legal provisions - the valuation of the imported goods requires re-examination by the original authority in line with the applicable provisions of valuation rules - also, the aspect of confiscation and quantum of redemption fine needs re-examination - matter on remand. Appeal allowed - decided partly in favor of appellant, partly decided against appellant, and part matter on remand.

Summary

Issues:
Violation of provisions of Customs Act by the importer
Penal proceedings against M/s Prajil & Co.
Valuation of the imported consignment

Violation of Provisions of Customs Act by the Importer:
The case involved the import of goods where discrepancies were found during examination, leading to re-valuation and penalties under the Customs Act, 1962. The original authority rejected the declared value, re-determined the assessable value, ordered confiscation, and imposed penalties. The appellants contended that there was no misdeclaration and the loading of value was unjustified. They argued that the original authority did not follow Customs Valuation Rules and adopted an enhanced value against the rules. The Tribunal found that the importer violated the Act by misdeclaring the imported items and their value, leading to re-valuation and penalties.

Penal Proceedings Against M/s Prajil & Co.:
Regarding penal proceedings against M/s Prajil & Co., the Tribunal noted that the impugned order lacked evidence to support penal action under Section 112 of the Act. M/s Prajil & Co. had initially filed the bill of entry but later requested to stop clearance due to disputes. The Tribunal found no evidence that M/s Prajil & Co. aided in any conspiracy or had knowledge of undeclared items, thus ruling that penal action against them was not legally sustainable.

Valuation of the Imported Consignment:
In analyzing the valuation of the imported consignment, the Tribunal considered whether the original authority rightly rejected the declared value and followed valuation rules. The original authority rejected the declared value based on additional invoices and comparative data. However, the Tribunal found that the methodology used to determine the value was contrary to valuation rules. It directed the original authority to re-examine the valuation in line with the rules and provide the importer with necessary data before making a decision. The Tribunal allowed the appeal filed by M/s Prajil & Co., directing the original authority to re-determine the value and decide on fines and penalties accordingly.