2018 (10) TMI 113 - AT - Customs

Valuation of imported goods - Viscose Filament Yarn (VFY) - under-invoicing by misdeclaring the value - rejection of declared value - enhancement of value - allegation is that the appellants have misdeclared the Viscose Filament Yarn imported by them and also undervalued the said goods and evaded Customs Duty. Held that - It is seen that for the two containers for which the Bill of Entry No. 524213 dated 26.08.2003 was filed there was no misdeclaration with respect to description of goods. The differential duty demand confirmed on the ground of under-invoicing is Rs. 93, 261/- in respect of these two containers - Since from the previous imports it is seen that the goods were imported for higher value we find that there is no requirement for interfering with the enhancement of value. Thus the differential duty demand of Rs. 93, 261/- in respect of Bill of Entry dated 26.08.2003 is sustained and therefore the conclusion that the goods in these two containers are liable for confiscation does not require interference. Redemption fine u/s 125 of CA - Held that - The redemption fine imposed under Section 125 of the Customs Act 1962 is on the higher side. The enhancement of value being only marginal we are of the view that the redemption fine can be reduced to Rs. 30, 000/-. Penalty u/s 112(a) of CA - Held that - The penalty imposed under Section 112(a) in respect of the above Bill of Entry also appears to be on the higher side and is reduced to Rs. 15, 000/-. In respect of the 12 Bills of Entry it is brought out from evidence that only 2 Bills of Entry Nos. 499206 and 499208 both dated 11.06.2003 showed discrepancy with regard to the description of the Deneirage of the goods imported. While the Master Bill of Lading showed the description of both 600D and 120D the House Bill of Lading in respect of these two Bills of Entry showed declaration as 600D only - the differential duty demand as well as the penalty imposed in respect of the 10 Bills of Entry cannot sustain and requires to be set aside which we hereby do - the differential duty demand along with penalty in respect of the 2 Bills of Entry Nos. 499206 and 499208 dated 11.06.2003 is upheld. The matter is remanded to the adjudicating authority for requantification of the differential duty and for revision of penalty. Appeal allowed in part and part matter on remand.

Summary

Issues:
Misdeclaration and under-valuation of Viscose Filament Yarn (VFY) leading to differential duty demand, confiscation, and penalties.

Analysis:
1. The appellant, a partnership firm, was suspected of under-invoicing VFY by misdeclaring the Denier, prompting an investigation by the Special Intelligence and Investigation Branch (SIIB).
2. The Department alleged undervaluation based on the unit prices declared by the appellant for VFY of 600D and 120D, leading to differential duty demands, confiscation orders, and penalties.
3. The Original Authority enhanced the value of VFY for the two containers and 12 Bills of Entry, resulting in differential duty demands and penalties.
4. The Commissioner (Appeals) reduced the redemption fine and penalties, prompting the appeal before the Tribunal.
5. The appellant argued that the goods were correctly declared, and the Department's enhancement of value lacked a basis.
6. The Department contended that previous imports showed undervaluation, supporting the differential duty demands and penalties.
7. The Tribunal found no misdeclaration in the two containers but sustained the differential duty demand and confiscation orders.
8. The redemption fine and penalties were reduced for the two containers, while the differential duty demands and penalties for the 12 Bills of Entry were set aside.
9. The Tribunal remanded the matter for re-quantification of demands related to two specific Bills of Entry showing discrepancies.
10. The impugned Order was modified to reflect the reduced redemption fine and penalties, setting aside demands for 10 Bills of Entry but upholding demands for the two Bills with discrepancies.
11. The appeal was partly allowed, partly remanded, and the matter was referred back to the adjudicating authority for further action.