2021 (4) TMI 571 - AT - Customs

Valuation of imported goods - small printer part, big printer part and data cable - redetermination of value based on contemporaneous import data of the goods that were actually imported - SCN waived by importer itself - Confiscation of goods - redemption fine and penalty - HELD THAT - The issue of re-determination of the duty under Section 17 when the importer gives in writing that he does not want the show cause notice and accepts the re-determination was decided by this Bench and the batch of appeals in the case of Commissioner of Customs versus Hanuman Prasad Sons 2020 (12) TMI 1092 - CESTAT NEW DELHI where it was held that The Commissioner (Appeals) completely failed to advert to the crucial aspect that the importers had themselves accepted the enhanced value. The Commissioner (Appeals) in fact, proceeded to examine the matter as if the assessing officer had enhanced the declared value on the basis of other factors and not on the acceptance by the importers. This casual observation is not based on the factual position that emerges from the records of the case. The appellant had indeed declared the value of the goods incorrectly and on being pointed out agreed to reassessment of duty and waived his right to show cause notice and personal hearing. The appellant also undertook to pay the fine and penalty. Therefore, the Assessing Officer is not required to issue a speaking order. The reassessment of the duty is final as it was uncontested. Considering the declared value was only about 2% of the actual value as re-determined, it is found that the Adjudicating Authority was correct in confiscating the goods under Section 111 (m). Quantum of redemption fine - HELD THAT - Second proviso to Section 125 places an upper limit of fine that it should not exceed the market price of the goods confiscated. In this case, the assessable value of the goods which are confiscated is ₹ 9,21,951/- and the penalty imposed was only ₹ 2 lakhs, which was further reduced to ₹ 1 lakh by the First Appellate Authority. The amount of fine imposed is, therefore, only about 11% of the assessable value which given the facts and circumstances of the case is just and fair. Penalty u/s 112 (a) of Customs Act - HELD THAT - The penalty imposable under Section 114AA can be upto five times the value of the goods - In the present case, the actual duty was re-determined as ₹ 1,60,327/-, whereas the duty which would have been paid as per the assessee declaration was only ₹ 2,634/-. Thus, the duty sought to be evaded was over ₹ 1,50,000/- and the penalty imposed under Section 112 (a) read with Section 114AA was only ₹ 90,000/-, which was further reduced to ₹ 40,000/- by First Appellate Authority. This is a fair amount of penalty - Penalty upheld. Appeal dismissed - decided against appellant.

Issues Involved:
1. Legality and propriety of the impugned order.
2. Mis-declaration of goods and re-determination of value.
3. Confiscation of goods under Section 111 (m) of the Customs Act.
4. Imposition of redemption fine under Section 125 of the Customs Act.
5. Imposition of penalty under Section 112 (a) read with Section 114AA of the Customs Act.

Detailed Analysis:

1. Legality and Propriety of the Impugned Order:
The appellant argued that the impugned order was not legal or proper. They cited previous judgments (Handtex vs. Commissioner of Customs, Raigad and Nitish Tools Pvt. Ltd.) to support their claim that changes made during assessment do not necessarily indicate mis-declaration. The Tribunal found that the appellant had accepted the reassessment in writing and waived the right to a show cause notice and personal hearing, making the reassessment final and uncontested.

2. Mis-declaration of Goods and Re-determination of Value:
The appellant imported goods declaring a value of ?15,141/-. Upon examination, the customs authorities found the actual value to be ?9,21,951/-. The appellant accepted the enhanced value and requested the release of their consignment on nominal fine and penalty. The Tribunal noted that the appellant’s acceptance of the reassessment and waiver of a show cause notice and personal hearing meant the reassessment was final.

3. Confiscation of Goods under Section 111 (m) of the Customs Act:
The goods were confiscated under Section 111 (m) due to mis-declaration of value. The Tribunal upheld this confiscation, noting that the declared value was only about 2% of the actual value. Section 111 (m) states that goods not corresponding in value with the entry made under the Act are liable for confiscation.

4. Imposition of Redemption Fine under Section 125 of the Customs Act:
The Additional Commissioner imposed a redemption fine of ?2,00,000/-, which was reduced to ?1,00,000/- by the First Appellate Authority. The Tribunal found this amount to be just and fair, as it was only about 11% of the assessable value of the goods (?9,21,951/-).

5. Imposition of Penalty under Section 112 (a) read with Section 114AA of the Customs Act:
A penalty of ?90,000/- was initially imposed under Section 112 (a) read with Section 114AA, which was reduced to ?40,000/- by the First Appellate Authority. The Tribunal upheld this penalty, noting that the duty sought to be evaded was over ?1,50,000/-. The penalty imposed was found to be fair and in accordance with the provisions of the Customs Act.

Conclusion:
The Tribunal upheld the impugned order, finding no reason to interfere with the decisions made by the lower authorities. The appeal was rejected, affirming the reassessment of duty, confiscation of goods, and the imposition of fines and penalties.

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