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2020 (6) TMI 425 - AT - CustomsValuation - rejection of declared value - import of Synthetic Rubber PBR Non Oil Off Grade Loose Lumps in Super Sacks Packing - Confiscation - Penalty - HELD THAT - The CIPET Test Report supports the correct description of the impugned goods in the Bills of Entry, which is rather more detailed than mentioned in the CIPET Report and thus there is no misdescription. We also find that there is no admission of Appellant admitting to undervaluation, or of any extra financial consideration apart from the declared transaction value, paid to the overseas supplier. Further, there is no evidence that the appellant and overseas supplier are related parties or that the invoice value was not the transaction value. The Department has failed to show any contemporaneous evidence of higher price, and thus the transaction value cannot be rejected, as held by the Hon ble Apex Court in COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, NOIDA VERSUS M/S. SANJIVANI NON-FERROUS TRADING PVT. LTD. 2018 (12) TMI 738 - SUPREME COURT and COMMISSIONER OF CUSTOMS, CALCUTTA VERSUS SOUTH INDIA TELEVISION (P) LTD. 2007 (7) TMI 9 - SUPREME COURT . The allegation of undervaluation cannot be sustained - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Rejection of declared value for import of Synthetic Rubber PBR Non Oil Off Grade Loose Lumps. 2. Confiscation of goods under Section 111(m) of the Customs Act, 1962. 3. Demand of differential duty under Section 28 of the Customs Act, 1962. 4. Imposition of penalty under Section 114A of the Customs Act, 1962. Detailed Analysis: 1. Rejection of Declared Value for Import: The appellant, a regular importer of Synthetic Rubber PBR Non Oil Grade Loose Lumps, declared the value of the goods at ?45.40 per kg and ?26.81 per kg for two separate Bills of Entry. The Department, based on NIDB data, re-determined the values at ?77.99 per kg and ?50.86 per kg, respectively. The appellant argued that the NIDB data used for comparison was for different quantities and qualities of goods. The Tribunal found merit in the appellant's contention, noting that the NIDB data was not comparable due to differences in quantity and quality. The Tribunal also criticized the arbitrary nature of the "just and fair approach" adopted by the adjudicating authority to re-determine the value at 75% of the NIDB data without proper reasoning. 2. Confiscation of Goods: The adjudicating authority ordered the confiscation of the goods under Section 111(m) of the Customs Act, 1962, but allowed the appellant to redeem the goods on payment of a redemption fine of ?1,50,000. The Tribunal found that the CIPET Test Report supported the correct description of the goods as declared by the appellant. There was no evidence of misdescription or any extra financial consideration paid to the overseas supplier apart from the declared transaction value. Therefore, the confiscation order was deemed unjustified. 3. Demand of Differential Duty: The adjudicating authority confirmed a demand of differential duty amounting to ?12,85,013 under Section 28 of the Customs Act, 1962, along with interest under Section 28AA. The Tribunal found that the Department failed to provide contemporaneous evidence of higher prices and could not prove that the declared value was not the actual transaction value. The Tribunal referred to the Supreme Court's rulings, which emphasized that transaction value should be accepted unless there is evidence of extra financial consideration or a relationship between the importer and supplier affecting the price. 4. Imposition of Penalty: A penalty of ?12,85,013 was imposed under Section 114A of the Customs Act, 1962, for alleged willful acts of omission and commission by the appellant. The Tribunal noted that there was no admission by the appellant of undervaluation or any evidence of extra financial consideration. The Department's failure to provide evidence of contemporaneous higher prices meant that the allegation of undervaluation could not be sustained, rendering the penalty unjustified. Conclusion: The Tribunal set aside the impugned order, allowing the appeal with consequential benefits. The rejection of the declared value, confiscation of goods, demand of differential duty, and imposition of penalty were all found to be unsustainable due to lack of evidence and arbitrary decision-making by the adjudicating authority. The Tribunal emphasized the importance of adhering to the principles of natural justice and the necessity of providing concrete reasons for rejecting transaction values.
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