2019 (12) TMI 1218 - AT - Customs

Valuation of imported goods - misdeclaration - rejection of declared value on the basis of contemporaneous import value - RUDs not provided - time limitation - penalty. Undervaluation - confiscation - HELD THAT - The facts on the basis of which the allegation of undervaluation have been made, like NIDB data or import value of M/s EGPL were available to Revenue all throughout. It is admitted that M/s EGPL is also a regular importer of O-General ACs directly from the manufacturer located at Thailand - Accordingly, the demand with respect to 11 past bills of entry which were filed and assessed prior to 13.03.2012 is held time barred and accordingly set aside - Consequently, the revaluation and confiscation is also set aside with respect to these 11 bills of entry. Rejection of transaction value with respect to the live bill of entry - goods found and seized in the godown - HELD THAT - Admittedly, in the facts of the case the buyer and seller are not related. Further, there is no allegation by Revenue that the appellant have remitted any amount directly or indirectly to the seller and shipper of the goods other than through normal banking channel, than the amount mentioned in the import documents. Accordingly, rejection of transaction value by Revenue is held to be against Section 14 of the Customs Act and the same is set aside. Further, the differential duty worked out and demanded from the appellant based on MRP of M/s EGPL is also bad and untenable for the reason that the goods are not manufactured in India. Thus, there is no prescribed MRP by the manufacturer under the legal Metrology Act read with the rules thereunder. In case of import, the importer is free to determine his retail selling price or MRP. There is no law under which the present appellants are bound to sell the goods at the retail selling price or MRP by M/s EGPL. Further distinguishing features in the sales made by M/s EGPL like providing of free installation, providing of copper tubing etc and after sales service are not being done or provided by the present appellants. In this view of the matter, the MRP of the appellant is not comparable with the MRP of M/s EGPL - Further, it is admitted fact that the imported goods found in the godown of the appellant have been imported by filing proper bills of entry which have been duly assessed by the competent officer of the customs. In this view of the matter, the impugned order suffers from impropriety and at the same time is erroneous. The penalty imposed on Shri Rohit Sakhuja is also set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Misdeclaration in the bill of entry and liability of goods to confiscation.
2. Limitation period for past imports.
3. Rejection of transaction value based on contemporaneous import value.
4. Provision of Relevant Documents (RUDs) to the appellant.

Issue-Wise Detailed Analysis:

Misdeclaration and Confiscation:
The core issue was whether the appellant misdeclared the value of imported goods, making them liable for confiscation. The investigation revealed that the appellant undervalued the goods, and the value was re-determined based on contemporaneous imports by M/s EGPL. The adjudicating authority ordered the confiscation of the goods under Section 111(m) of the Customs Act, with an option to redeem them on payment of a fine. The Tribunal found that the goods were imported by filing proper bills of entry duly assessed by customs officers, and there was no substantial evidence of misdeclaration. Thus, the confiscation order was set aside.

Limitation Period:
The appellant argued that the show cause notice was time-barred for the fourteen past bills of entry, which were filed and assessed more than twelve months before the notice date. The Tribunal agreed, noting that the data used to allege undervaluation were available to the Revenue throughout, and there was no suppression of facts by the appellant. Consequently, the demand for differential duty and confiscation related to these eleven bills of entry was set aside as time-barred.

Rejection of Transaction Value:
The transaction value was rejected based on higher values declared by M/s EGPL for identical goods. The Tribunal held that the rejection of transaction value was against Section 14 of the Customs Act, as there was no evidence that the appellant paid any amount over the declared value through improper channels. The Tribunal emphasized that the transaction value should be the price paid or payable for the goods when sold for export to India, provided the buyer and seller are not related and the price is the sole consideration. The re-determined value based on M/s EGPL's imports was found to be inappropriate, and the differential duty demand was set aside.

Provision of Relevant Documents (RUDs):
The appellant contended that they were not provided with copies of bills of entry filed by M/s EGPL and NIDB data, which were relied upon to determine the comparable price. The Tribunal noted that the failure to provide these documents was a significant procedural lapse, affecting the appellant's ability to contest the findings effectively. The Tribunal directed that the case be re-examined, considering the appellant's right to access all relevant documents.

Additional Findings:
- The Tribunal found that the declared MRP by the appellant was higher than the sale prices and there was no evidence of selling goods at higher prices than the declared MRP.
- The exemption from additional customs duty under Notification No. 29/2010-Cus was denied on insufficient grounds, as the appellant was not required to submit sales bills or evidence of VAT payment for goods covered by MRP provisions.
- The Tribunal held that only seized goods could be confiscated, and since the goods related to the eleven past bills of entry were not seized, the confiscation order was not sustainable.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeals of the appellants. The penalty imposed on the appellant and other individuals was also set aside. The judgment emphasized adherence to procedural fairness, proper valuation principles under the Customs Act, and the necessity of providing relevant documents to the appellant for a fair trial.