2018 (2) TMI 31 - AT - Customs

Valuation - mis-declaration of value - enhancement of invoice price - penalty - Held that - Indenting agents have no knowledge of the trade transaction; their role is merely to bring buyer and seller together in the highseas sale for a commission. In the instant case evidence was collected by the department that some amount over and above the invoice value was paid. Payment was made through account payee cheque. The statement given by Shri Niraj Sharma is also doubtful. The show-cause notice is based merely on suspicion without having actual fact. It may be mentioned that scrap is always cheaper than the prime metal. Sale price on highseas could also be cheaper than the sale by the exporter. The charge of under-invoicing has to be supported by the evidence of prices of contemporaneous imports of similar/identical goods - determination of such price has to be in accordance with the relevant rules and subject to the provision of Section 14(1). It is made clear that these provisions are not mutually exclusive. Therefore Rule 4 must be the price paid or payable on such goods at the time and place of importation in the course of international trade. Section 14 (1) speaks of deemed value. Appeal allowed.

Summary

Issues: Mis-declaration of value in import transactions, imposition of penalties, retraction of statements under duress, reliance on evidence, under-valuation charges, admissibility of invoices.

The judgment by the Appellate Tribunal CESTAT MUMBAI involved a case where the application for early hearing by M/s. Mittal Pigments Pvt. Ltd. was allowed due to the long pendency of the appeal and pressure from the department for recovery. The appeals were against an order dated 30.03.2010 regarding the alleged undervaluation of Non Ferrous Metal Scrap imports. The appellants had sold some consignments on high sea sales, leading to enhanced import values and penalties. The main contention was the discrepancy in the invoice prices. The department alleged under-valuation, while the appellants argued that the invoice values matched the actual transaction values. The department relied on statements from indenting agents and reports from customs authorities to enhance the value of imports. Both parties presented their arguments, with the appellants emphasizing the validity of the invoice values. The Tribunal noted that retracted statements made under duress could not be relied upon and emphasized the need for corroborative evidence to support under-valuation charges. The judgment highlighted the importance of contemporaneous import prices and the burden of proof on the department to establish under-valuation. The Tribunal found the department's allegations to be assumptive and lacking in corroborative evidence, leading to the setting aside of the impugned order and allowing all the appeals. The judgment was pronounced on 23.01.2018 by the Tribunal.