2020 (1) TMI 281 - AT - Customs

Valuation of imported goods - 130 rolls of 50 Micron Spangle Film - misdeclaration of description/weight of goods - determination of excess goods on estimation basis - rejection of declared value - Rule 12 of Customs Valuation Rules, 2007 - HELD THAT - As per the facts recorded in the order in original the excess weight found in the consignment over the declared weight as per the Bill of Entry was not determined on the basis of actual weighment, but on the basis of estimation - for making the charge of misdeclaration of weight, revenue has adopted a novel, self contradictory method of estimation. When they themselves agree that the length of the rolls was not identical, then what was basis for determining the total length of the 130 rolls to multiply the same by weight per unit length. Further in the entire exercise we are unable to determine what was the weight per unit length taken for estimation, and how the figure of 2.270 MT, arrived as short declared. It is not understood if Custom Officers were suspicious of misdeclaration of weight what prevented them from actually weighing the consignment as a whole and determining the actual weight of consignment. From perusal of the two Bill of entries it is quite evident that in the Bill of Entry Filed by the Appellants they have declared the gross weight of the consignment as 14950 kgs and Net weight of 14560 Kgs as per the packing list issued by the foreign supplier. In the amended Bill of Entry, as per the order of the Additional Commissioner, the Net Weight was amended to 16771 Kgs without changing the gross weight. This has created the situation wherein the Net Weight as per the assessed Bill of Entry is more than the Gross Weight of consignment. We are not in position to agree that there was any misdeclaration of the weight of the imported goods. Entire case of undervaluation has been made against the appellant, by not amending the declared value, but by enhancing the same to take into account the estimated undeclared weight - enhancement of value cannot be accepted. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to order in appeal, Confiscation of goods under Customs Act, Imposition of penalty, Misdeclaration of weight, Undervaluation of imported goods.

Challenge to Order in Appeal:
The appeal was filed challenging the order of the Commissioner (Appeals) Nhava Sheva, which upheld the order in original passed by the Additional Commissioner of Customs (Import), Group II(G). The Commissioner (Appeals) had confiscated the goods imported under a specific Bill of Entry and imposed a fine and penalty on the importers.

Confiscation of Goods under Customs Act:
The goods imported were confiscated under section 111(m) of the Customs Act, 1962, due to misdeclaration of weight. The importers were given the option to redeem the goods by paying a fine and appropriate duty on the redetermined value.

Imposition of Penalty:
A penalty was imposed on the importers under Section 112(a) of the Customs Act, 1962, in addition to the confiscation of goods.

Misdeclaration of Weight:
The case revolved around the misdeclaration of weight in the imported goods. The declared weight did not match the actual weight upon examination, leading to the rejection of the transaction value declared by the importer. The value was re-determined based on the actual weight of the goods, resulting in discrepancies in the Bill of Entry.

Undervaluation of Imported Goods:
The order in original enhanced the value of the goods to account for the estimated undeclared weight, leading to an increase in the assessed value. However, the Tribunal found discrepancies in the estimation method used by the revenue authorities and concluded that there was no misdeclaration of weight. The Tribunal set aside the impugned order and allowed the appeal, emphasizing the lack of evidence to support the charge of misdeclaration.

This detailed analysis of the judgment highlights the key issues of challenge to the order in appeal, confiscation of goods, imposition of penalty, misdeclaration of weight, and undervaluation of imported goods, providing a comprehensive overview of the legal proceedings and the Tribunal's decision.