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2018 (10) TMI 1574 - AT - Customs


Issues Involved:
1. Misdeclaration of Country of Origin
2. Misdeclaration of Quantity and Value
3. Rejection of Transaction Value
4. Valuation Method Adopted by the Department
5. Confiscation and Redemption Fine
6. Imposition of Penalties

Issue-wise Detailed Analysis:

1. Misdeclaration of Country of Origin:
The appellants were accused of misdeclaring the country of origin for carpets imported under Bill of Entry dated 24.02.2011 as the USA, while the goods were actually of Indian origin. The appellant argued that this was a clerical error and sought correction under Section 149 of the Customs Act. The tribunal found that the error was clerical and did not amount to misdeclaration intended to evade duties, as the goods were declared as old and used.

2. Misdeclaration of Quantity and Value:
For the Bill of Entry dated 11.05.2011, the department alleged misdeclaration due to discrepancies in the declared quantity and the actual quantity found during inspection. The tribunal noted that the declared area in square yards matched the duty assessed, indicating no misdeclaration. Additionally, the department's claim of undervaluation was based on the assumption that the relationship between the parties influenced the price, which was not substantiated with evidence.

3. Rejection of Transaction Value:
The department rejected the transaction value declared by the appellant, citing misdeclaration and the relationship between the parties. The tribunal found that there was no evidence to show that the relationship influenced the price, and therefore, the rejection of the transaction value was not justified.

4. Valuation Method Adopted by the Department:
The department used Rule 9 of the Customs Valuation Rules, 2007, to revalue the goods by applying a depreciation method on the export mean value from 2007. The tribunal criticized this approach, stating that the department should have considered the value of similar or identical goods imported around the same time. The tribunal also noted that old and used carpets have little commercial value, and the department did not undertake a proper valuation exercise.

5. Confiscation and Redemption Fine:
The department ordered the confiscation of the goods under Section 111(d), 111(m), and 111(1) of the Customs Act, 1962, and imposed a redemption fine. The tribunal found that since there was no misdeclaration or undervaluation, the goods were not liable for confiscation, and therefore, the redemption fine was not justified.

6. Imposition of Penalties:
Penalties were imposed under Sections 114A and 114AA of the Customs Act, 1962. The tribunal held that since the charges of misdeclaration and undervaluation were not sustainable, the penalties imposed were also liable to be set aside.

Conclusion:
The tribunal allowed the appeals, setting aside the impugned order, and held that the appellants were entitled to consequential relief in accordance with the law. The differential duty demand, penalties, and redemption fine were all set aside.

 

 

 

 

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