2023 (6) TMI 200 - AT - Customs

Classification of imported goods - Ultrasonic Cleaner - misdeclaration of description and value of the goods - change of classification from declared CTH 84239020 to CTH 90610010 - rejection of declared value - HELD THAT - No reason has been given in the Impugned order for rejecting the transaction value except stating that the goods were miss-classified. It is settled law that miss classification of the goods cannot be the reason for rejection of the declared value which is determine on the transaction value between the supplier of the goods and the receiver in the course of international trade. Hon'ble Supreme Court has consistently held that the proper reason for rejection of the transaction value needs to be recorded. It is not even the case that these Ultrasonic Cleaners were not complete or sold in the market for addition of some other value. Hence the deducted value as per Rule 7 of Custom Valuation Rules method applied by the revenue without rejecting the transaction value cannot be justified. Appellant does not dispute any other part of the order. Reassessment order as per the impugned order should be done on the basis of the transaction value declared by the appellant at the time of assessment. With the notification impugned order is upheld. Appeal partly allowed.

Issues Involved:
1. Classification of imported goods.
2. Valuation of imported goods.
3. Imposition of differential duty.
4. Imposition of penalties.
5. Appropriation of deposited amounts.

Summary:

1. Classification of Imported Goods:
The Tribunal addressed the reclassification of goods imported under various Bills of Entry. The goods initially classified under CTH 84239020 and CTH 84336010 were reclassified to CTH 90610010 and CTH 84562000 respectively. The Tribunal upheld the reclassification, noting that the goods were misclassified to evade customs duty.

2. Valuation of Imported Goods:
The appellant contested the valuation of Ultrasonic Cleaners, arguing that the value should be based on the transaction value as per Section 14 of the Customs Act, 1962, rather than the deductive value method applied by the authorities. The Tribunal found that no proper reason was given for rejecting the transaction value and stated, "It is settled law that misclassification of the goods cannot be the reason for rejection of the declared value." The Tribunal held that the value of Ultrasonic Cleaners should be as per the declared transaction value.

3. Imposition of Differential Duty:
The Tribunal confirmed the differential duty amounts for various Bills of Entry, including Rs. 49,446 for Bill of Entry No. 935942, Rs. 34,641 for Bill of Entry No. 682092, and Rs. 4,23,900 for past imports. The Tribunal ordered that the differential duties be paid along with applicable interest under Section 28AA of the Customs Act, 1962.

4. Imposition of Penalties:
Penalties were imposed on the appellant under Section 112(a) and Section 114A of the Customs Act, 1962, for acts of omission and commission related to the importation of goods. The Tribunal upheld the penalties, noting that the appellant deliberately misclassified goods to evade customs duty.

5. Appropriation of Deposited Amounts:
The Tribunal ordered the appropriation of Rs. 5,00,000 deposited by the appellant towards the liabilities arising from the differential duties and penalties. The Tribunal also directed the release of the bank guarantee provided by the appellant for the provisional release of goods.

Conclusion:
The Tribunal partly allowed the appeal, upholding the transaction value for Ultrasonic Cleaners while affirming the reclassification, differential duties, penalties, and appropriation of deposited amounts. The bank guarantee provided by the appellant was ordered to be released.

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