2023 (7) TMI 323 - AT - Customs

Valuation of imported goods - Enhancement of value based on NIDB data - violations of PFT Act and the PFA Rules - packages imported did not contain the details of manufacturer as required under the said Act - confiscation of the goods - imposition of redemption fine and penalty. Enhancement of value based on NIDB data - demand of differential duty - HELD THAT - It is correct that in show cause notice the proposal is to enhance the value in terms of Rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules 2007. However adjudicating authority has applied Rule 5 to confirm the enhancement of value and to demand differential duty. The value has been enhanced solely on the basis of NIDB data. The details of bill of entry has been mentioned. It is not clear as to which is the country from which the contemporaneous imports are made. So also the name of the supplier is not clear. The appellant ought to be provided with complete details of the contemporaneous import relied upon to enhance the value. The courts have cautioned against the sole reliance of NIDB data for enhancement of value - In the case of M/S. TOPSIA ESTATES PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS CHENNAI (IMPORT-SEAPORT) 2015 (1) TMI 750 - CESTAT CHENNAI the Tribunal held that the value declared cannot be rejected merely on the basis of NIDB data. In the present case the department has failed to substantiate as to how the value adopted on the basis of NIDB data is comparable in the absence of details required in the nature of name of manufacturer country of origin etc. to arrive at contemporaneous price. The facts being so there are no sufficient reasons to reject the transaction value and for the enhancement of value. The demand of differential duty cannot sustain and requires to be set aside. Confiscation of the goods and the imposition of redemption fine and penalty - main allegation of violations of PFT Act and the PFA Rules is that the packages imported did not contain the details of manufacturer as required under the said Act - HELD THAT - The infractions alleged under the PFA Act and Rules and FFS Act 2006 if any has been rectified - The Tribunal in the case of M/S. AVENUE IMPEX VERSUS THE COMMISSIONER OF CUSTOMS 2012 (2) TMI 39 - MADRAS HIGH COURT had occasion to consider a similar situation. The imported goods which did not comply with the requirement of providing necessary details on the bulk bags was ordered to be released after complying with the repacking and relabelling in the customs bonded premises. In the present case the goods having been released after rectifying the deficiency and on fulfilment of the conditions as per direction of Hon ble High Court the confiscation of goods cannot sustain. Consequently the redemption fine and penalties imposed are required to be set aside. The impugned order cannot sustain. The same is set aside. Appeal is allowed.

Summary

Issues Involved:
1. Enhancement of value and demand of differential duty.
2. Confiscation of goods and imposition of redemption fine and penalties for violations of provisions of the PFA Act and PFA Rules.

Summary:

Enhancement of Value and Demand of Differential Duty:
The adjudicating authority enhanced the value of the imported "Monosodium Glutamate" based on NIDB data, which was contested by the appellant. The Tribunal noted that the enhancement was done without providing complete details of contemporaneous imports, such as the country of origin and the name of the supplier. The Tribunal cited previous decisions, emphasizing that NIDB data alone cannot justify the rejection of declared value. Consequently, the Tribunal found insufficient reasons to reject the transaction value and set aside the demand for differential duty.

Confiscation of Goods and Imposition of Redemption Fine and Penalties:
The adjudicating authority held that the goods were liable for confiscation due to non-compliance with the PFA Act and PFA Rules, specifically the absence of the manufacturer's details on the packages. The appellant argued that the PFA Act had been repealed and replaced by the FSS Act, 2006, which should apply. The Tribunal noted that the Hon'ble High Court had directed the provisional release of goods after rectifying the deficiencies through repacking and relabelling under customs supervision. Given that the infractions were rectified, the Tribunal held that the confiscation, redemption fine, and penalties could not be sustained and set them aside.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal with consequential relief, if any, due to the lack of sufficient grounds for value enhancement and the rectification of labeling deficiencies as per the High Court's direction.