2022 (3) TMI 953 - AT - Customs

Valuation of imported goods - rejection of transaction value - enhancement of assessable value - mis-declaration of goods - mismatch of invoices - HELD THAT - Only few goods were found to be mismatch with the invoice and packing list. It is found that the appellant had given cogent explanation based on the statement and clarification of the shipper, via E-mail, clarifying that due to a large variety of goods being small in nature there occurred error at the time of packing of the goods, resulting in some mismatch and finding of few undeclared goods which is not deliberate. It is found that the shipper had also offered to take back the undeclared goods as per the shipping documents. Thus, it is found that there is no case of any deliberate mis-declaration on the part of the appellant (importer) who had filed the Bill of Entry declaring the goods under import as per the invoice and packing list. Accordingly, the allegation of mis-declaration is set aside. Rejection of declared value - HELD THAT - The court below have rejected the transaction value against the provisions of law without complying with the condition precedent for rejection. Further, it is found that the revaluation have been resorted to without following the due process of law - the rejection of transaction value as well as the revaluation of the goods done are set aside. Thus, the declared value as per the Bill of Entry is accepted. The order of confiscation as well as the redemption fine imposed are set aside - the penalty imposed on the proprietor Shri Joginder Singh under Section 112(a) of the Act are set aside - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Mis-declaration and undervaluation of imported goods.
2. Requirement of No Objection Certificate (NOC) for certain items.
3. Rejection of declared assessable value and revaluation of goods.
4. Confiscation of goods and imposition of redemption fine.
5. Imposition of penalty under Section 112(a) of the Customs Act, 1962.

Detailed Analysis:

1. Mis-declaration and Undervaluation of Imported Goods:
The department's case was that some undeclared items were found during the examination of the goods, which required a No Objection Certificate (NOC) from the Assistant Drug Controller (ADC). The importer admitted responsibility for the mis-declaration, stating that the excess quantity of goods was inadvertently shipped by the supplier from China. The importer could not produce any evidence of placing an order for the undeclared items and admitted to not being registered with any Drug or Cosmetic Controlling Authority.

2. Requirement of No Objection Certificate (NOC) for Certain Items:
The items mentioned in Table 02 from S. No. 1 to 6 were categorized as 'cosmetics' and required pre-registration with the ADC under the Drugs & Cosmetics Act, 1940. The importer was not able to produce the required NOC and thus relinquished his title/claim on these items.

3. Rejection of Declared Assessable Value and Revaluation of Goods:
The department conducted a market enquiry to ascertain the assessable value of the goods, rejecting the declared value. The revaluation resulted in a significant increase in the assessable value and the corresponding duty. The importer accepted the market enquiry findings and the revised assessable value under pressure to minimize demurrage and detention charges.

4. Confiscation of Goods and Imposition of Redemption Fine:
The adjudicating authority confiscated the goods requiring NOC (valued at ?52,57,183/-) under Section 111(d) of the Customs Act, 1962. The remaining goods (valued at ?22,65,922/-) were confiscated under Section 111(m) with an option to redeem on payment of a fine of ?8,80,000/-. The importer argued that the confiscation and redemption fine were arbitrary and not in accordance with the law.

5. Imposition of Penalty under Section 112(a) of the Customs Act, 1962:
A penalty of ?7,50,000/- was imposed on the proprietor of Rubal International under Section 112(a) for mis-declaration and undervaluation. The importer contended that the penalty was not justified as there was no deliberate attempt to mis-declare the goods.

Tribunal's Findings:

Mis-declaration and Undervaluation:
The Tribunal found that the explanation given by the importer based on the supplier's email was cogent and that the error in packing was inadvertent. There was no deliberate mis-declaration on the part of the importer.

Requirement of NOC:
The Tribunal confirmed the absolute confiscation of the 6 items requiring NOC, as the importer had relinquished the title to these goods.

Rejection of Declared Value and Revaluation:
The Tribunal held that the rejection of the transaction value and the revaluation of goods were done without following the due process of law. The declared value as per the Bill of Entry was accepted.

Confiscation and Redemption Fine:
The Tribunal set aside the order of confiscation and the redemption fine imposed on the remaining goods (Serial No. 7 to 48).

Penalty under Section 112(a):
The penalty imposed on the proprietor under Section 112(a) was also set aside by the Tribunal.

Conclusion:
The appeal was allowed, and the impugned order was set aside. The appellant was entitled to consequential benefits in accordance with the law. The Tribunal confirmed the absolute confiscation of the 6 items requiring NOC but set aside the confiscation, redemption fine, and penalty imposed on the remaining goods and the proprietor.