2023 (4) TMI 614 - AT - Customs

Valuation of imported goods - modified Tapioca Starch - rejection of assessabla value - redetermination of value under Rule 5 of the Valuation Rules - allegation of misdeclaration of import value by wilful suppression of facts - extended period of limitation - seeking refund of deposit of Rs. 10 lakhs by the respondent during the investigation - HELD THAT - It is evident from the SCN that the demand in dispute is regarding the past consignments which were already cleared as per the declared values by the respondent. The assessment, therefore, attained finality. Once the assessment attained finality, it can be either appealed against to the Commissioner (Appeals) by either side or a notice under section 28 can be issued by the Revenue. While appeal to the Commissioner (Appeals) can be for any aspect of the assessment, a notice under section 28 can be issued only to recover duty not paid, short paid or erroneously refunded or not levied and it can be issued only by the proper officer . The notice can be issued within the normal period of limitation of one year under section 28 (1) from the date of clearance of goods for home consumption or, within the extended period of limitation of 5 years if the short payment or non-payment is because of collusion or any willful misstatement or suppression of facts. In this case, the SCN was issued invoking the extended period of limitation and there is not even any allegation of collusion or suppression of facts and the only allegation is of willful mis-statement of the value by the respondent, which was inferred from his statement. If the SCN is issued alleging non-payment or short payment of duty, the basis of such an allegation must be on sound footing, backed by evidence. There is nothing in the SCN and in the grounds of appeal before us which shows that the declared value was incorrect apart from the statements. The statements, as summarized, only show that the respondent was ignorant of many factors, but it does not establish that the respondent had mis-declared the value. It is also evident that there was no chemical analysis report nor was any sample drawn to allege mis-declaration of the nature of the goods. Deposit of Rs. 10 lakhs by the respondent during the investigation - HELD THAT - It can only be called as deposit. The mere fact that some amount has been deposited during investigation does not establish in any way the case of the Department. Needless to say since the respondent has succeeded, the amount so deposited should have been refunded to him, if it has not already been refunded. Appeal of Revenue dismissed.

Summary

Issues:
The issues involved in the judgment are the rejection of declared value of imported goods, re-determination of value under Customs Valuation Rules, imposition of penalty, and recovery of differential duty based on alleged mis-declaration by the importer.

Comprehensive Details:

1. Rejection of Declared Value and Re-determination under Valuation Rules:
The appeal was filed by the Revenue challenging the order-in-appeal that rejected the Revenue's appeal and upheld the order of the Joint Commissioner regarding imported goods declared as modified Tapioca Starch. The Revenue alleged mis-declaration by the importer to evade customs duty. The Revenue argued that the declared value was low compared to industry standards, and the importer lacked documentary evidence for the prices. However, the Tribunal found no sufficient evidence to reject the declared value and re-determine it under the Valuation Rules. The Tribunal emphasized the importance of sound evidence to support allegations of mis-declaration.

2. Imposition of Penalty and Recovery of Differential Duty:
The Revenue contended that the importer willfully mis-declared the import value to evade duty, leading to the proposal of recovering the differential duty and imposing penalties. The Revenue highlighted the importer's admission of paying the differential duty and depositing a sum during the investigation. However, the Tribunal noted that mere deposit during investigation does not establish the case against the importer. The Tribunal found no substantial evidence to confirm the allegations of mis-declaration and upheld the decision to drop the proceedings, emphasizing the lack of evidence such as chemical analysis reports or samples to support the Revenue's claims.

3. Legal Assessment and Conclusion:
The Tribunal analyzed the grounds presented by both parties and examined the statements and evidence provided. It emphasized the importance of a strong foundation of evidence to support allegations of mis-declaration. The Tribunal concluded that there was a lack of substantial evidence to support the Revenue's claims of mis-declaration and evasion of duty. Therefore, the impugned order was upheld, dismissing the Revenue's appeal and providing consequential benefits to the respondent. The Tribunal highlighted the need for evidence-based allegations in cases of duty evasion and mis-declaration to ensure fair assessment and decision-making in customs matters.

(Order pronounced in open court on 12/04/2023.)