2018 (8) TMI 38 - AT - Customs

Import of Restricted Item - old and used tyres of various sizes and of mixed brands - License not produced by appellant - enhancement of value based on opinion of Chartered Engineer - Confiscation - Penalty - Held that - Admittedly, the foreign supplier has raised the invoices for the goods in question which invoice has not been rebutted by the Revenue by producing any evidence on record. As such, to enhance the value of such goods depending upon the opinion of the Chartered Engineer is not justifiable - enhancement of value set aside. Inasmuch as the appellant have admittedly not produced the license to import the goods. The confiscability of the goods and imposition of penalty is upheld - the enhancement of the value has already been set aside. Appeal allowed in part.

Summary

Issues:
1. Undervaluation of imported old and used tyres.
2. Non-production of required import license.
3. Confiscation of goods and imposition of penalty.

Analysis:

Undervaluation of imported old and used tyres:
The appellant imported old and used tyres, declaring their value based on the foreign supplier's invoice. Revenue suspected undervaluation and sought to enhance the value based on a Chartered Engineer's opinion. The Original Adjudicating Authority increased the value significantly. On appeal, the charge of undervaluation was upheld, but the Commissioner (Appeals) reduced the redemption fine and penalty. The Tribunal noted that the imported tyres were old and used, with varying values based on factors like years of use and residual life. The Tribunal found no evidence challenging the foreign supplier's invoice, which should be considered the correct assessable value. Consequently, the Tribunal set aside the enhancement of the assessable value.

Non-production of required import license:
The appellant failed to produce the necessary import license, leading to the view that the goods were liable for confiscation and penalty imposition. The Tribunal upheld the confiscation of goods and the penalty due to the absence of the import license. However, considering the reversal of the value enhancement, the Tribunal reduced the redemption fine to 15% of the assessable value and the penalty to 10% of the goods' value. This reduction was based on a legal principle from a previous decision upheld by the Hon'ble Allahabad High Court.

Confiscation of goods and imposition of penalty:
Due to the absence of the import license, the confiscation of goods and penalty imposition were upheld. The Tribunal's decision to reduce the redemption fine and penalty percentages was based on legal precedent. The appeal was disposed of in accordance with the above terms, providing relief to the appellant in terms of the reduced financial liabilities while upholding the confiscation and penalty due to the non-compliance with licensing requirements.