2017 (12) TMI 1178 - AT - Customs

Valuation - imported cut & polished Diamonds - redemption fine - Held that - when value of diamonds imported was mis-declared and that was confiscated, imposition of a token redemption fine of ₹ 5,00,000/- under misplaced sympathy is liable to criticism - So also when there was huge difference in the value declared and determined, establishing deliberate mis-declaration, levy of penalty of ₹ 5 lakhs also appears to be too low and is an incentive to wrong doing. Appeal dismissed - decided against appellant.

Summary

Issues: Mis-declaration of imported goods, valuation of imported diamonds, confiscation of goods, imposition of redemption fine and penalty, appeal against adjudication findings.

The judgment pertains to a case involving the mis-declaration of imported cut and polished diamonds. The Revenue contended that the diamonds were undervalued by the importer, leading to a significant variance between the declared value and the value suggested by the Expert Trade Panel Members. The adjudicating authority noted the discrepancy and assessed the value of the consignment at a lower figure based on the panel's suggestion, resulting in the imposition of penalties under Section 111 of the Customs Act, 1962.

During the proceedings, the appellant failed to challenge the valuation made by the Expert Trade Panel Members, which led the Revenue to assert that the method of valuation remained uncontroverted. The failure of the appellant to provide a basis to challenge the valuation resulted in the confirmation of the mis-declaration of import, justifying the confiscation of the goods and the imposition of penalties by the adjudicating authority.

The judgment criticized the imposition of a token redemption fine of ?5,00,000 by the learned Commissioner, highlighting that such leniency towards overvaluation was unwarranted. The court expressed surprise at the low penalty imposed, considering the deliberate mis-declaration and the significant difference in the declared and determined values. The judgment emphasized that such leniency could be seen as an incentive for wrongful practices and questioned why the Revenue did not appeal against the misplaced sympathy shown by the adjudicating authority.

Ultimately, the appeals were dismissed, and the Registry was directed to send a copy of the order to the Chairman of the Board for the issuance of proper guidelines to protect the nation's economic interests, emphasizing the role of customs as the guardian of the nation.