2022 (12) TMI 1249 - AT - Customs

Recovery of Differential duty - rejection of declared value - levy of penalty under section 112 (a) of the Customs Act - tungsten level in the Steel Bounded Cemented Carbide was mentioned as 8% in the Bill of Entry - HELD THAT - It is not in dispute that the tungsten level in the Steel Bounded Cemented Carbide was shown by the appellant in Bill of Entry at 8% instead of 75.3%. It is also not in dispute that the level of tungsten in Steel Bounded Cemented Carbide would determine its value. The appellant accepted the test report which determined the level of tungsten in the imported good at 75.3% and also accepted that the value of the goods would be 46.50 US per kg instead of 12 US per kg. Such being the position, the Commissioner (Appeals) committed no illegality in confirming the demand of differential duty. There is, therefore, no good reason, and indeed none could be pointed out by learned counsel for the appellant, to reduce the penalty imposed upon the appellant under section 114AA of the Customs Act or reduce the redemption fine under section 125 of the Customs Act. Appeal dismissed.

Issues Involved:
1. Rejection of declared value in the Bill of Entry.
2. Demand for differential duty.
3. Imposition of penalties under sections 112(a) and 114AA of the Customs Act.
4. Imposition of redemption fine under section 125 of the Customs Act.
5. Reduction of penalties and redemption fine by the Commissioner (Appeals).

Issue-wise Detailed Analysis:

1. Rejection of Declared Value in the Bill of Entry:
The Joint Commissioner of Customs rejected the declared value in the Bill of Entry dated 12.10.2012, which stated the tungsten content in the Steel Bonded Cemented Carbide as 8%. Upon testing, the actual tungsten content was found to be 75.3%. The appellant admitted this discrepancy in a statement under section 108 of the Customs Act, acknowledging the mistake and accepting the higher tungsten content. The Joint Commissioner re-determined the value at 46.5 US$ per kg, significantly higher than the declared 12 US$ per kg.

2. Demand for Differential Duty:
The re-determination of the value led to an order for the recovery of differential duty. The total differential duty recoverable was calculated at Rs. 28,11,711/- for twelve consignments, including the one in question. The Commissioner (Appeals) upheld this demand, confirming that the appellant's acceptance of the higher tungsten content and value justified the differential duty.

3. Imposition of Penalties Under Sections 112(a) and 114AA of the Customs Act:
The Joint Commissioner imposed a penalty of Rs. 28,11,711/- under section 112(a) and Rs. 5,00,000/- under section 114AA of the Customs Act. The penalties were based on the appellant's admission of mis-declaration and the intent to evade customs duty. The Commissioner (Appeals) reduced the penalty under section 114AA to Rs. 2,00,000/- but upheld the penalty under section 112(a).

4. Imposition of Redemption Fine Under Section 125 of the Customs Act:
A redemption fine of Rs. 3,00,000/- was imposed for the consignment covered by Bill of Entry No. 8201053 dated 12.10.2012. The Commissioner (Appeals) reduced this fine to Rs. 2,00,000/-, considering the circumstances and the appellant's cooperation during the investigation.

5. Reduction of Penalties and Redemption Fine by the Commissioner (Appeals):
The Commissioner (Appeals) acknowledged the appellant's admission of the error and cooperation but still found the imposition of penalties and fine justified. However, considering the circumstances, the penalties and fine were reduced. The appellant's counsel argued for further reduction, but the Tribunal found no merit in this appeal and upheld the Commissioner (Appeals)' order.

Conclusion:
The Tribunal dismissed the appeal, confirming the demand for differential duty and the reduced penalties and redemption fine. The Tribunal found no illegality in the Commissioner (Appeals)' decision, as the appellant had admitted the mis-declaration and accepted the higher value for the goods. The penalties and fine were deemed appropriate given the circumstances.

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