2019 (9) TMI 715 - AT - Customs

Valuation of imported goods - marble slabs - rejection of declared value - enhancement of value based on contemporaneous imports - HELD THAT - The findings of the original authority, which was upheld in the impugned order, have based the enhancement of assessable value on imports that were contemporaneous as well as others that were not contemporaneous. Moreover, despite the enhanced value being in excess of the threshold prescribed in the Foreign Trade Policy for free importability, the first appellate authority has confirmed the actions of the original authority in confiscating the goods for violation of the import policy prescription. The confiscation of 21.71 sq meter of marble slabs that were in excess of the declaration is sustainable in law. The enhancement of the assessable value appears to have relied upon four bills of entry of which only two pertains to the period prior to the import effected against bill of entry no. 466132/16.09.2011. However, it is not ascertainable from the records if those two bills of entry can be accepted as benchmarks or had been subject to re-assessment in like manner and, thereby, not appropriate for subjecting the impugned goods to revised valuation. The enhancement of value does not appear to be sustainable in law. As the goods are, admittedly, imported at a value below the threshold prescribed for free importability and the policy had come into force on 4th August, 2011 with shipment occurring thereafter, the plea of the appellant that the quotation received in June 2011 as proforma invoice would entitle them to relief in accord with the transitional provision in the Foreign Trade Policy is not acceptable. While setting aside the valuation, the confiscation of the goods under section 111(d) of Customs Act, 1962 is upheld - the redemption reduced to ₹ 2,00,000/- and the penalty to ₹ 1,00,000/- - appeal allowed in part.

Summary

Issues involved:
Import of marble slabs subject to policy restriction, assessable value declaration below threshold, confiscation of excess slabs, enhancement of assessable value, compliance with Customs Valuation Rules, applicability of transitional provisions in Foreign Trade Policy.

Analysis:
The appellant, M/s Bemisal Project Developers & Hotels Pvt Ltd, appealed against an order-in-appeal regarding the import of marble slabs subject to a policy restriction limiting free importability to slabs valued over US $60/sq metre. The original authority had confiscated goods due to the declared assessable value of US $51/sq metre, leading to redemption on payment of a fine and penalty. Additionally, 21.71 sq metre of excess marble slabs were confiscated. The assessable value was enhanced to US $60/sq metre based on imports by various persons during a specific period.

The Tribunal considered the arguments of the appellant's counsel and the Authorized Representative. It noted that the original authority's decision to enhance the assessable value was based on contemporaneous and non-contemporaneous imports, exceeding the threshold for free importability set by the Foreign Trade Policy. Despite this, the first appellate authority upheld the confiscation for violating the import policy.

The Tribunal found the confiscation of excess marble slabs to be legally sustainable. However, it raised concerns about the basis for enhancing the assessable value, which relied on only two out of four bills of entry, and the lack of clarity on whether these bills were appropriate benchmarks. The Tribunal also highlighted the failure to assess the conformity of the assessable value determination with the Customs Valuation Rules.

Given these issues, the Tribunal concluded that the enhancement of value was not legally sustainable. It rejected the appellant's plea for relief under transitional provisions of the Foreign Trade Policy based on a proforma invoice received before the policy came into force. The Tribunal set aside the valuation, upheld the confiscation under the Customs Act, and reduced the redemption fine and penalty imposed by the original authority.

In summary, the Tribunal modified the impugned order by setting aside the valuation, upholding the confiscation, and reducing the fine and penalty amounts, emphasizing the importance of compliance with Customs Valuation Rules and the applicable policy restrictions.