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2017 (10) TMI 1134 - AT - CustomsValuation - enhancement of declared value - fax message seized from residential premises of Shri MKPP - Held that - the show-cause notice admitting to compare the incomparable imports from different suppliers, from different countries and where there is an apparent difference in description of the imported product. In such a scenario, the attempt of the department to enhance the import values of all the consignments based on the fax message recovered from Shri BMS relating to B/E No.304848, dated 07.12.2000 is legally not justified - enhancement of value does not sustain. Penalties - Held that - penalty u/s 114(a) of the CA, 1962 can be imposed only in respect of the differential liability determined in respect of B/E No.304848 - it would in the interest of justice to reduce the penalty imposed under section 112(a) ibid of Shri MKPP reduced to ₹ 10,000/-. Appeal allowed in part.
Issues:
1. Alleged misdeclaration of values in import of Camphor. 2. Adjudication leading to imposition of differential duty and penalties. 3. Appeal challenging the impugned order. Issue 1: Alleged misdeclaration of values in import of Camphor The case involved M/s. Esjaypee Impex Pvt. Ltd. (EIPL), importers of Camphor, under scrutiny for alleged misdeclaration of values. Investigations revealed discrepancies between actual sales prices and declared values for customs purposes. The department initiated proceedings against EIPL, alleging misdeclaration of values for 23 consignments of Camphor imported between Oct. 99 to Apr. 01. The impugned order re-determined unit prices, confirmed differential duties, and imposed penalties under various provisions of law. The appellant challenged the basis for value enhancement, arguing against revising values based on quotations and lack of evidence corroborating the charges. The appellant also contested the violation of natural justice principles in furnishing details for value enhancement. Issue 2: Adjudication leading to imposition of differential duty and penalties During the hearing, the appellant's counsel argued against the department's proposal to enhance declared import values based on fax messages seized from the premises of an indenting agent. The Tribunal noted an under-valuation in a specific import consignment as a benchmark for enhancing values of all 23 Camphor consignments imported through Chennai Port. However, the Tribunal found merit in the appellant's grievance regarding incomparable imports from different suppliers and countries, leading to the setting aside of value enhancement for 22 consignments. The Tribunal upheld the enhancement only for the specific import covered by Bill of Entry No. 304848, dated 07.12.2000. Regarding penalties, the Tribunal reduced the penalty imposed on the Managing Director of EIPL in the interest of justice. Issue 3: Appeal challenging the impugned order The appeal primarily focused on contesting the department's basis for value enhancement and penalties imposed. The appellant argued against the department's reliance on fax messages and lack of concrete evidence supporting the charges of undervaluation. The Tribunal, after considering the arguments from both sides, concluded that the enhancement of import values for 22 consignments was legally unjustified due to incomparable imports from different suppliers. The Tribunal upheld the enhancement only for the specific import covered by Bill of Entry No. 304848, dated 07.12.2000. Additionally, the Tribunal reduced the penalty imposed on the Managing Director of EIPL, considering the reduced gravity of the infraction.
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