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2020 (2) TMI 966 - AT - Customs


Issues Involved:
1. Alleged mis-declaration of the motor yacht model.
2. Under-valuation of the imported motor yacht.
3. Application of Customs Valuation Rules, 2007, specifically Rule 3(1) and Rule 12.
4. Imposition of penalties under Section 112(a) and Section 114A of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Alleged Mis-declaration of the Motor Yacht Model:
The appellants imported a motor yacht model "Azimut 68 Evolution," but due to a typographical error, it was declared as "Azimut 68" in the Bill of Entry. The appellants submitted documents like the owner's manual, builder's certificate, and EC type examination certificate to establish their bonafides and argue that there was no mis-declaration. The Commissioner noted that the specifications pertained to "Azimut 68 Evolution" and suggested that the documents were procured during the investigation. The Tribunal found that if the appellants had submitted the documents along with the Bill of Entry, the wrong declaration could be seen as a typographical error. However, due to the absence of proof from either party, the Tribunal remanded the matter back to the Original Authorities to determine if the mis-declaration was intentional or a clerical error.

2. Under-valuation of the Imported Motor Yacht:
The Revenue contended that the declared value of ?9,99,69,800/- was incorrect and sought to re-determine the assessable value at ?17,74,67,817/-. The appellants argued that the value declared was correct and was the amount paid to the foreign supplier. The Tribunal noted that the Commissioner re-determined the value under Rule 3(1) of the Customs Valuation Rules, 2007, without following the sequential procedure from Rules 4 to 9 as required under Rule 12. The Tribunal emphasized that the Commissioner should have first rejected the declared value under Rule 12 before re-determining it under Rule 3(1).

3. Application of Customs Valuation Rules, 2007:
The Tribunal highlighted the provisions of Rule 12, which allows the proper officer to reject the declared value if there is reasonable doubt about its truth or accuracy. The Tribunal found that the Commissioner did not properly reject the declared value under Rule 12 and instead considered the price quoted in the proforma invoice as the actual price paid. The Tribunal noted that the Commissioner should have followed the sequential procedure from Rules 4 to 9 after rejecting the declared value under Rule 12.

4. Imposition of Penalties:
The Commissioner imposed penalties of ?10,00,000/- and ?15,00,000/- under Section 112(a) and Section 114A of the Customs Act, 1962, on the Vice President of M/s. Afcon Infrastructure Ltd. and the Director of M/s. Mydream Properties Pvt. Ltd., respectively. The appellants argued that the penalties were not sustainable due to the incorrect re-valuation of the goods. The Tribunal found that the adjudicating authority should properly evaluate the evidence and legal provisions before determining the value and imposing penalties.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter back to the Original Authorities for proper appreciation of the available records, evidence, and legal aspects. All issues were kept open for re-determination by the adjudicating authority. The appeal was allowed by way of remand.

 

 

 

 

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