2019 (5) TMI 1079 - AT - Customs

Valuation of imported goods - rejection of declared value - which is correct value at which the goods imported which is required to be accepted for the purpose of assessment of Customs duty? - HELD THAT - The valuation of the imported goods has to be done as per Section 14 of the Customs Act read with Custom Valuation Rules, 2007, which has not been followed in this case. Investigation has been done in an unprofessional manner and the prices has been arbitrarily enhanced by the Customs Officer which has not been rectified in the impugned order in spite of various submissions made by the appellant. The Department has not been able to provide any value for the contemporaneous import but for the third invoice the source of which is not disclosed. In view of that it will be inappropriate and contrary to the provisions of the Section 14 of the Customs Act read with Custom Valuation Rules, 2007 to reject the transaction value as has been held by the lower adjudicating authority and learned Commissioner (Appeals) in the impugned order. The department is directed to release the consignment at declared price within a fortnight from the receipt of this order - Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Mis-declaration of the value, description, and quantity of imported goods.
2. Rejection of transaction value and re-assessment based on multiple invoices.
3. Imposition of penalties and confiscation of goods.
4. Compliance with Customs Valuation Rules, 2007.

Issue-wise Detailed Analysis:

1. Mis-declaration of the value, description, and quantity of imported goods:
The main appellant filed a Bill of Entry for the clearance of various imported items, declaring the value at ?37,10,497/- and self-assessed Customs duty of ?10,82,621/-. During examination, it was found that the goods were mis-declared in terms of description, quantity, and value. The goods were initially declared as unbranded but were found to be branded items. The weight discrepancy was minor (25380 Kgs. vs. 25340 Kg.). The investigation revealed the submission of three different invoices with varying values for the same consignment.

2. Rejection of transaction value and re-assessment based on multiple invoices:
The adjudicating authority rejected the declared transaction value based on the first invoice and accepted the value from the third invoice (USD 129573.28) for re-assessment. The appellant contended that they agreed to pay the duty based on the third invoice under duress to avoid demurrage charges, and the acceptance was not voluntary. The department failed to investigate the origin of the third invoice and did not find any evidence of contemporaneous imports or extra payments made by the appellant.

3. Imposition of penalties and confiscation of goods:
The adjudicating authority ordered the confiscation of goods and imposed penalties under various sections of the Customs Act, 1962. The Commissioner (Appeals) upheld the duty demand and confiscation but reduced the redemption fine and penalty amounts. The appellant challenged the imposition of penalties, arguing that the valuation was done arbitrarily and without proper investigation.

4. Compliance with Customs Valuation Rules, 2007:
The appellant argued that the impugned order did not follow the principles of the Customs Valuation Rules, 2007. They contended that the department did not provide any evidence of contemporaneous imports at higher values or conduct a proper market enquiry. The department's reliance on the third invoice, which was neither retrieved from the appellant's records nor accepted by them, was deemed inappropriate. The Tribunal found that the investigation was conducted unprofessionally and the valuation was arbitrarily enhanced without proper justification.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal. It directed the department to release the consignment at the declared price, emphasizing that the valuation should comply with Section 14 of the Customs Act and the Customs Valuation Rules, 2007. The Tribunal found the department's actions and the adjudicating authority's decision to be contrary to legal provisions and based on inadequate investigation.

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