2018 (3) TMI 517 - AT - Customs

Misdeclaration of value of imported goods - undervaluation - Revenue entertained a view that the appellants did not declare the correct value for duty purposes and admitted to short paid customs duty by not including the cost of design in the value of the impugned goods - confiscation - penalty - Held that - The original authority recorded that even after two months of filing Bill of Entry, the appellant did not come with full explanation to justify their initial declaration of value or bonafideness in not declaring the correct value. It is apparent and clear that the detailed investigation and follow up by the officers has brought out various facts which did not support the case for bonafine belief on the part of the appellants. The non-inclusion of design charges is, admittedly, not in line with the valuation provisions. The redemption fine imposed is 10% of the value of assessment and the penalty is 5% of such value. These cannot be considered as excessive. Appeal dismissed - decided against appellant.

Issues:
1. Correct valuation of imported goods
2. Confiscation of goods
3. Penalty under Section 112(a) of the Customs Act, 1962
4. Bonafide belief of the appellants
5. Assessment of redemption fine and penalty

Correct Valuation of Imported Goods:
The appeal challenged an Order by the Commissioner of Customs, Chennai, regarding the correct valuation of imported "Dryers, Heater and Cooler." The Revenue alleged that the appellants did not declare the correct value for duty purposes, leading to a re-determination of the value under Customs Valuation Rules, 2007. The original authority found the declared transaction value unacceptable and ordered confiscation of goods with a redemption payment and imposed a penalty under Section 112(a) of the Customs Act, 1962. The appellants argued they had a bonafide belief in the declared value's accuracy, but the officers' investigation revealed discrepancies in their explanations and documents, undermining their claim. The Tribunal upheld the original authority's findings, emphasizing the lack of bonafide belief and supporting the confiscation and penalty.

Confiscation of Goods and Penalty under Section 112(a) of the Customs Act, 1962:
The appellants contested the confiscation of goods and penalty imposed by the original authority under Section 112(a) of the Customs Act, 1962. They argued for a substantial reduction in the redemption fine and penalty, citing their adherence to procedures and presenting purchase orders and documents to demonstrate their bonafideness. However, the Tribunal, after considering both parties' submissions and examining the records, concluded that the appellants failed to provide a full disclosure of documents and a coherent defense during the investigation. The Tribunal noted discrepancies in the appellants' explanations, including the submission of a revised invoice with incorrect values. The Tribunal found no merit in the appeal, upholding the redemption fine and penalty as not excessive and dismissing the appeal.

Bonafide Belief of the Appellants:
The appellants claimed a bonafide belief in the accuracy of the declared value of the imported goods. They argued that the declaration on the invoice stating "value for customs purpose only" did not indicate an attempt to under-declare the value. However, the Tribunal found that the appellants' explanations and actions during the investigation did not support their claim of bonafide belief. The Tribunal highlighted the discrepancies in the appellants' submissions and the lack of justification for the non-inclusion of design charges in the valuation, concluding that the appellants' plea for bonafide belief was not substantiated by the facts presented.

Assessment of Redemption Fine and Penalty:
The Tribunal noted that the redemption fine imposed was 10% of the assessed value, and the penalty was 5% of the same value. After reviewing the facts and circumstances of the case, the Tribunal determined that the redemption fine and penalty were not excessive. The Tribunal found no grounds to interfere with the original authority's decision regarding the assessment of the redemption fine and penalty, ultimately dismissing the appeal for lack of merit.

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