2021 (10) TMI 820 - AT - Customs

Valuation of imported goods - Tin Free Sheets (Secondary/Defective TFSSD) - enhancement of declared value - it is alleged that the entire consignment was Tin Sheets of width of 500 mm, whereas, the goods were declared by the importer as Tin Free Sheets - contemporaneous imports of identical goods were not available - applicability of Rule 5 of Customs Valuation Rules, 1998 - HELD THAT - The Tribunal vide its earlier Final Order, dated 11.12.2006 2006 (12) TMI 575 - CESTAT CHENNAI had remanded the matter with specific direction to supply copies of the details regarding the contemporaneous imports of similar goods which has been made the basis for enhancing the value of the imported goods and for re-determining the duty. In spite of such specific direction, the department has not provided the evidence regarding contemporaneous imports. Undisputedly, the department admits that there are no details of identical imports available for re-determination of the duty. They proceeded to enhance the value on the basis of contemporaneous price of similar goods imported. A table is also seen furnished with regard to the details of the bills of entry of the similar goods imported. Apart from this table, even after remand and repeated requests by the party, the department has not been able to furnish the details with regard to these bills of entry which according to them are contemporaneous imports of similar goods. It is not explained by the department how these goods are similar or akin to the goods imported by the appellant - The department should at least be able to explain from which source they have obtained the figures in the above table. Even after several stages of litigation, the department has not been able to throw any light on these aspects. It is also pertinent to note that appellant has raised this contention in the very first stage itself. The enhancement of value of goods merely on the basis of figures given in the table of the Show-cause notice has no legal basis - the enhancement of value of the goods as well as re-determination of duty/differential duty cannot sustain and requires to be set aside - as the enhancement of value, duty demand is set aside, the order of confiscation of goods as well as imposition of redemption fine and penalties cannot then sustain. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:

1. Classification and valuation of imported goods.
2. Adherence to principles of natural justice.
3. Jurisdiction of DRI to issue the show-cause notice.
4. Confiscation and imposition of redemption fine and penalties.

Detailed Analysis:

1. Classification and Valuation of Imported Goods:

The Directorate of Revenue Intelligence (DRI) received information that the appellant imported Tin Sheets misdeclaring them as Tin Free Sheets (TFSSD). Upon investigation, it was found that the goods were misdeclared to evade customs duty. The original authority classified the goods under CTH 721090 and rejected the declared value, fixing it at USD 465/MT for Belgium origin goods and USD 475/MT for Germany origin goods. The Tribunal, in its earlier order, remanded the matter for fresh consideration, directing the department to provide details of contemporaneous imports used to enhance the value. However, the department failed to furnish these details, leading to the conclusion that the enhancement of value and re-determination of duty lacked legal basis. The Tribunal set aside the enhancement of value and duty demand.

2. Adherence to Principles of Natural Justice:

The appellant argued that the department did not supply details of contemporaneous imports, violating principles of natural justice. The Tribunal had previously directed the department to furnish these details before enhancing the assessable value. Despite this, the department did not comply, and the Tribunal noted that the enhancement of value based on figures without supporting documents was arbitrary and lacked legal basis. Consequently, the Tribunal set aside the enhancement of value and the corresponding duty demand.

3. Jurisdiction of DRI to Issue the Show-Cause Notice:

The appellant challenged the jurisdiction of DRI to issue the show-cause notice, citing the Supreme Court decision in M/s. Canon India P. Ltd. The Tribunal acknowledged that DRI officers are not the proper officers to issue show-cause notices demanding customs duty under Section 28(4) of the Customs Act, 1962. The Tribunal held that the show-cause notice for re-classification and re-assessment of goods imported earlier was invalid as it was hit by the principle laid down in the Canon India judgment. However, for the live consignment, since the bill of entry was not yet assessed, the Tribunal held that the demand was not hit by the principle laid down in the Apex Court judgment.

4. Confiscation and Imposition of Redemption Fine and Penalties:

The original authority had ordered the confiscation of goods and imposed redemption fines and penalties. The Tribunal, having set aside the enhancement of value and duty demand, also set aside the order of confiscation, redemption fines, and penalties. The Tribunal concluded that the confiscation and penalties could not sustain as they were consequential to the invalid enhancement of value and duty demand.

Conclusion:

The Tribunal allowed the appeal, setting aside the impugned order, including the enhancement of value, duty demand, confiscation of goods, and imposition of redemption fines and penalties. The Tribunal also acknowledged the lack of jurisdiction of DRI to issue the show-cause notice for re-classification and re-assessment of earlier imported goods, in line with the Supreme Court's decision in M/s. Canon India P. Ltd. The appeal was allowed with consequential reliefs.