2018 (1) TMI 71 - AT - Customs

Misdeclaration of imported goods - undervaluation - heavy Melting scrap, re-rollable steel scrap and other items of iron and Steel - difference of opinion - Held that - As there are contrary views and difference of opinion between the Members, therefore, the matter be placed before the Hon ble President to refer the matter to the third member to resolve the issue - Whether in the facts and circumstances of the case when the goods were mis-declared as admitted by Shri. K. K. Garg, M.D., the valuation of the goods can be determined on the basis of opinion of chartered engineer based on cotemporaneous bills of entry of similar scrap and the appeals dismissed, as held by the member (Technical)? - matter referred to Third Member.

Summary

Issues: Misdeclaration of goods, Undervaluation, Expert opinion of Chartered Engineer, Discrepancy in valuation, Misdeclaration by Managing Director, Appeal against the order.

Analysis:
1. Misdeclaration of Goods and Undervaluation:
The case involved the import of steel scrap by a company, which was found to be different from the description provided in the bill of entry. The Revenue alleged misdeclaration and undervaluation, leading to the initiation of proceedings against the appellants. The original adjudicating authority upheld the charges, confiscating the goods and imposing penalties. The Commissioner (Appeals) also rejected the appeals, prompting the appellants to approach the Tribunal.

2. Expert Opinion of Chartered Engineer:
The Revenue heavily relied on the opinion of a Chartered Engineer to determine the nature and value of the imported goods. The appellants challenged the credibility of the engineer, arguing that he was not qualified to provide an opinion on the specific type of scrap. The Tribunal noted that the engineer's opinion was based on the average prices of certain metals in the market, without concrete evidence of how those metals could be segregated from the imported scrap. The Tribunal found the reliance on the engineer's opinion unjustified.

3. Discrepancy in Valuation and Misdeclaration by Managing Director:
The Tribunal observed discrepancies in the valuation of the goods proposed by the Chartered Engineer compared to the declared value. The Managing Director of the company admitted to the misdeclaration of the goods but disputed the suggested value. The Tribunal examined the cross-examination of the engineer and found no substantial evidence to support the enhanced valuation based on the engineer's opinion.

4. Appeal Against the Order:
The Tribunal set aside the impugned order, allowing both appeals with consequential relief. The Member (Technical) differed in opinion, upholding the decision of the Ld. Commissioner (A) based on the misdeclaration of goods and the reliance on the Chartered Engineer's opinion. This led to a referral to the Hon'ble President for the matter to be placed before a third member to resolve the conflicting views between the Members.

In conclusion, the Tribunal emphasized the importance of concrete evidence and expert opinions in determining the valuation of imported goods. The case highlighted the need for transparency and accuracy in declarations to avoid penalties and confiscation. The differing opinions among the Members underscored the complexity of such cases and the necessity for thorough examination of all aspects before reaching a final decision.