2018 (9) TMI 1288 - AT - Customs

Valuation of imported goods - Heavy Melting Scrap - enhancement of value based on NIDB data for re-rollable scrap - Held that - The appellant have explained that so called re-rollable scrap was old used and defective materials which were imported for the purposes of utilization in furnace, as Heavy Melting Scrap - further, the value was enhanced by referring to NIDB data on which has been held to be not in accordance with law, by umpteen number of decisions of the Tribunal - enhancement of value not justified. Mis-declaration as regards the quantity of the material - Held that - The excess quantum is almost one third (1/3) of the total weight of the goods declared by the assessee, thus calling for their confiscation and imposition of penalty upon the appellant. The said excess goods would be cleared by the appellant on payment of duty leviable thereon by adopting the declared value. Redemption fine - Penalty - Held that - Commissioner has confiscated the entire consignment on the findings of under valuation with an option to the appellant to redeem the same on payment of redemption fine of ₹ 12 lakhs as has imposed penalty of ₹ 6 lakhs - quantum of redemption fine and penalty reduced. Appeal allowed in part.

Summary

Issues:
1. Alleged mis-declaration of imported goods.
2. Enhancement of value based on NIDB data.
3. Confiscation of goods and imposition of penalties.

Analysis:
1. The appellant imported Heavy Melting Scrap but the consignment was found to contain re-rollable scrap as well. The Revenue enhanced the value based on this finding, leading to the initiation of proceedings resulting in the impugned order. However, the Tribunal noted that the evidence of re-rollable scrap was based on visual examination by a Customs Officer without expert validation. The appellant clarified that the material was old, used, and defective, intended for furnace utilization as Heavy Melting Scrap. The Tribunal found no justification for value enhancement based on NIDB data, as it was not in accordance with established law by previous Tribunal decisions. Therefore, the value enhancement was deemed unjustified.

2. In addition to the mis-declaration of the material, there was a significant excess in quantity compared to the declared weight by the appellant. This excess quantity, amounting to almost one third of the total weight, led to the Tribunal's decision to confiscate the goods and impose penalties on the appellant. The excess goods could only be cleared upon payment of the applicable duty based on the declared value. This action was taken to address the mis-declaration and ensure compliance with duty payment requirements.

3. Regarding the redemption fine and penalties imposed, the Commissioner had confiscated the entire consignment due to undervaluation, offering the appellant the option to redeem it by paying a redemption fine of ?12 lakhs and a penalty of ?6 lakhs. However, since the Tribunal upheld the confiscation of only the excess goods, the redemption fine was reduced to ?3 lakhs, and the penalty was reduced to ?2 lakhs. By partially allowing the appeal in these terms, the Tribunal aimed to balance the penalties imposed while addressing the mis-declaration and excess quantity issues effectively.