2020 (3) TMI 269 - AT - Customs

Valuation of imported goods - Rough Marble Blocks - enhancement of declared value on the basis of contemporaneous import - basic objection of the Revenue is that the floor price of USD 275 per MT CIF of the goods-Rough Marble was fixed under policy circular no. 13 (RE- 08)/2004-09 dated 30/06/2008. HELD THAT - In the identical issue, this Tribunal in the case of Siemens M/S SIEMENS GAMESHA RENEWABLE POWER PVT. LTD. VERSUS C.C. MUNDRA 2018 (8) TMI 371 - CESTAT AHMEDABAD has taken a view that merely on the basis of minimum import price fixed by policy circular cannot be a reason for enhancement of the value. Therefore, the value was enhanced on the basis of policy circular taking the floor price is not sustainable. It is also observed that the Adjudicating Authority deviated from the basic objection and relied upon contemporaneous import wherein the import was made at the rate of USD 275. Even the price of USD275 per MT CIF is also keeping in view the policy circular. Secondly, the appellant were not provided the contemporaneous bills of entry. Therefore, if any new material was to be relied upon the appellant were to put to notice, which the Adjudicating Authority failed to do so. Therefore, in violation of principle of natural justice, the enhancement of value on the basis of contemporaneous import cannot be allowed - the enhancement of the value set aside. Violation of requirement of circular - HELD THAT - In case of declared value is less than the floor price, i.e USD 275, the appellant is required to obtain authorization from DGFT in terms of circular no. 13 (RE- 08)/2004-09 dated 30/06/2008. However, the appellant have not obtained any authorization. Therefore, for violation of the condition of the circular the appellant s goods was rightly confiscated. However, considering the facts, the enhancement of the value is set aside - The redemption fine and penalty needs to be reduced. Appeal allowed in part.

Summary

Issues Involved:
- Enhancement of value of goods based on policy circular
- Confiscation of goods for non-compliance with circular
- Imposition of redemption fine and penalty
- Violation of principle of natural justice

Analysis:

1. Enhancement of value of goods based on policy circular:
The Adjudicating Authority increased the value of the goods from the declared price to USD 275 per MT CIF, citing a policy circular. However, the Tribunal noted that merely relying on the minimum import price set by a policy circular is not sufficient grounds for enhancing the value. Citing a previous judgment, the Tribunal held that the enhancement based solely on the floor price specified in the circular was not sustainable. The Tribunal emphasized that the Adjudicating Authority should not have relied on contemporaneous imports without providing the appellant with relevant information or notice. Therefore, the Tribunal set aside the enhancement of the value.

2. Confiscation of goods for non-compliance with circular:
The appellant failed to obtain authorization from the Directorate General of Foreign Trade (DGFT) as required by the circular due to the declared value being below the specified floor price. Consequently, the Adjudicating Authority confiscated the goods. The Tribunal acknowledged the violation of the circular's condition but decided to set aside the enhancement of the value. The Tribunal upheld the confiscation of goods but reduced the redemption fine and penalties imposed, considering the circumstances.

3. Imposition of redemption fine and penalty:
The Adjudicating Authority had imposed redemption fines and penalties on the appellant under the Customs Act, 1962. The Tribunal, after setting aside the enhancement of the value, decided to reduce the redemption fine and penalties significantly. The revised fines were lowered from ?2 lakhs to ?1 lakh and from ?40,000 to ?20,000 in one case, and from ?1,00,000 to ?50,000 and from ?20,000 to ?10,000 in each of the other cases. The Tribunal modified the impugned order accordingly.

4. Violation of principle of natural justice:
The Tribunal found that the Adjudicating Authority deviated from the basic objection raised by the Revenue and relied on contemporaneous imports without providing the appellant with necessary information or notice. This deviation was seen as a violation of the principle of natural justice. The Tribunal emphasized that any new material relied upon should have been communicated to the appellant, which was not done in this case. Therefore, the Tribunal set aside the enhancement of the value based on contemporaneous imports.

In conclusion, the Tribunal partly allowed the appeals, setting aside the enhancement of value, reducing the redemption fines and penalties, and emphasizing the importance of adhering to principles of natural justice in such matters.