2019 (2) TMI 1257 - AT - Customs

Valuation of imported goods - TX4000/2014-LINGS / FULL Stack (HW only) - rejection of declared value - enhancement of value based on similar goods - Rule 6 of Customs Valuation Rules, 1988 - scope of SCN - Held that - In the first place, the demand of differential duty under Section 28 of the Act is not sustainable as the same has not been invoked in the show-cause notice and therefore the demand is beyond the show-cause notice. The products which were imported by the appellant were only hardware whereas the products compared with other importers were loaded with software also - Further Revenue has not been able to bring on record that the appellant and the supplier were related parties and there was any flow back from the appellant to the supplier. Appeal allowed - decided in favor of appellant.

Issues:
- Rejection of appeal by Commissioner (Appeals)
- Allegations of mis-declaration of imported goods
- Differential customs duty, confiscation, and penalty imposition
- Sustainability of impugned order
- Demand of duty beyond show-cause notice
- Challenge to assessment and demand
- Comparison of imported goods with other importers
- Lack of evidence of related parties or flow back
- Setting aside of impugned order

Rejection of Appeal by Commissioner (Appeals):
The appeal was directed against the order passed by the Commissioner (Appeals) rejecting the appellant's appeal. The Customs Department initiated proceedings against the appellant for allegedly mis-declaring the value of imported goods, leading to the demand for differential customs duty, confiscation of goods, and imposition of penalties. The appellant challenged the sustainability of the order, arguing that it went beyond the show-cause notice and failed to appreciate the facts and the law.

Allegations of Mis-declaration of Imported Goods:
The appellant was accused of mis-declaring the value of goods imported from Singapore, which led to proceedings initiated by the Customs Department. The show-cause notice alleged that the value declared by the appellant was lower compared to similar goods imported by other parties, such as Motorola India Pvt. Ltd. and Siemens Public Communications. The Customs Department sought to re-determine the value of the goods under the Customs Valuation Rules, 1988, and imposed penalties under the Customs Act, 1962.

Differential Customs Duty, Confiscation, and Penalty Imposition:
The Additional Commissioner confirmed the demand for differential customs duty, along with interest, and ordered the confiscation of imported goods with an option for redemption upon payment of a fine. Additionally, a penalty was imposed on the appellant under Section 112(a) of the Customs Act. The appellant appealed this decision before the Commissioner (Appeals), who upheld the order, leading to the present appeal.

Sustainability of Impugned Order:
The impugned order was challenged by the appellant on various grounds, including the demand for differential duty beyond the show-cause notice, failure to challenge the assessment before making the demand, and lack of evidence to support the allegations of mis-declaration. The appellant argued that the comparison of imported goods with those of other importers was flawed and that there was no proof of any relationship between the appellant and the supplier.

Setting Aside of Impugned Order:
After considering the submissions of both parties and reviewing the material on record, the Tribunal found that the demand for differential duty was unsustainable as it was not invoked in the show-cause notice. The Tribunal also noted that the assessment was complete and not challenged, and that the goods imported by the appellant were different from those of other importers. In the absence of evidence of related parties or flow back, the Tribunal set aside the impugned order, allowing the appeal of the appellant with consequential benefits.

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