2023 (3) TMI 1081 - AT - Customs

Confiscation of imported goods - barge - rejection of declared value under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - section 28 and section 114A of Customs Act, 1962 - HELD THAT - It is found that the adjudicating authority has incorporated facts, not suitably tested by offering opportunity to challenge, which is anathema to just and fair adjudication. The deficiency in not placing the appellants on notice of these allegations would need to be remedied and it is only by a fresh adjudicating process that the factual position may be established. As pointed out by Learned Council, the restricted framework of section 28 and section 114A of Customs Act, 1962 would have to be adhered to in in the fresh proceedings. The adjudicating authority is also obliged to explain the different positions adopted for valuation of the same vessel which, but for a brief while, was within Indian territorial waters and, yet, was found to be valued with substantial difference on the two occasions; this could have a significant bearing on the manner in which the residual method is used for conformity with the scheme of valuation espoused in rule 3 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Matter remanded back to the adjudicating authority for fresh determination of all issues that the appellants have raised the proceedings - appeal allowed by way of remand.

Summary

Issues involved:
- Confirmation of duty of customs
- Confiscation of 'work accommodation barge'
- Imposition of penalty under section 114A of Customs Act, 1962

Confirmation of duty of customs:
The appellant, M/s Jayesh Shipping Pvt Ltd, contested the confirmation of duty of customs on the re-determined value of 'barge' imported against a bill of entry. They argued that the transaction value in the memorandum of agreement and bill of sale had been discarded, invoking rule 12 of Customs Valuation Rules. The appellant challenged the penalty imposed under section 112 of Customs Act, 1962. The impugned vessel had been imported initially for offshore oil operations and later offered for sale through competitive tender. The appellant declared the bid price in the bill of entry, supported by a bill of sale, for assessment. Investigations revealed discrepancies in the valuation estimates provided by various parties, leading to a show cause notice and subsequent order.

Confiscation of 'work accommodation barge':
The 'work accommodation barge' was initially imported at a lower value for temporary deployment. The vessel underwent a transfer of registry and name before being offered for sale through a memorandum of agreement. The appellant declared the bid price in the bill of entry for assessment, which was later disputed based on valuation estimates by different surveyors and insurers. The investigating authorities found discrepancies in the valuation reports, leading to the issuance of a show cause notice and subsequent order.

Imposition of penalty under section 114A of Customs Act, 1962:
The appellant contested the penalty imposed under section 114A of the Customs Act, arguing that the re-assessment process did not adhere to valuation provisions. They claimed that the declared price was the transaction value and should not have been rejected. The appellant highlighted flaws in the valuation estimates provided by surveyors and argued that penalties were unjustified given the circumstances of the transaction. The Authorized Representative supported the rejection of the declared value, citing deficiencies in the valuation reports and invoking rule 9 of Customs Valuation Rules. The appellant filed a miscellaneous application to include additional grounds challenging the impugned order, which was allowed. The case was remanded back to the adjudicating authority for a fresh determination of all issues raised by the appellants.