2023 (8) TMI 16 - AT - Customs

Undervaluation of imported goods - Car audio items viz. Car Speaker, CD Players, Amplifiers - manipulating the actual value of the imported consignments in collusion with the supplier firm and was declaring lower value before Indian Customs for assessment of duty thereby paying lesser amount of Customs duty - appellants are real importers or not - levy of penalties - HELD THAT - The duty cannot be demanded from the appellants as it is the fact on record that the appellants, namely, Shri Rakesh Magoo Shri John Miranda are not the real importers. In fact, the Bills of Entry has been filed in the name of Surya Trading Company Creative Enterprises and these Bills of Entry were assessed and the goods were cleared to those importers - the demand of duty from the appellants is not sustainable. Levy of Penalty on Rakesh Magoo and Shri John Miranda - HELD THAT - Shri Rakesh Magoo and Shri John Miranda were using IEC Code of various IEC holders for import of car electronic goods by under-valued the same and the differential amount has also been paid to the overseas suppliers through their office in India by illicit means - Shri Rakesh Magoo and Shri John Miranda were actively involved in import of the impugned goods and undervalued the same. Therefore, penalties imposed on the said Shri Rakesh Magoo and Shri John Miranda, are confirmed. Penalty imposed on M/s Sai Dutta Clearing Agency Private Limited - HELD THAT - They are also involved in the illegal imports by undervaluation of imported goods as it was in their knowledge that Shri Rakesh Magoo and Shri John Miranda, imported the goods in the name of IEC holder using IEC code for their illegal import. Accordingly, penalty imposed on M/s Sai Dutta Clearing Agency Private Limited, is also confirmed. Thus, no duty is payable on Shri Rakesh Magoo and Shri John Miranda, but penalties imposed on Shri Rakesh Magoo and Shri John Miranda and M/s Sai Dutta Clearing Agency Private Limited , are confirmed - appeal disposed off.

Summary

Issues Involved:
1. Demand of Duty
2. Imposition of Penalty
3. Confiscation and Redemption Fine
4. Valuation of Imported Goods

Summary:

1. Demand of Duty:
The Tribunal examined whether the duty could be demanded from the appellants, Shri Rakesh Magoo and Shri John Miranda, who were not the actual importers. The Tribunal noted that the Bills of Entry were filed in the names of Surya Trading Company and Creative Enterprises, and these were the entities that cleared the goods. Consequently, the Tribunal held that the demand of duty from the appellants was not sustainable, as per Section 28 of the Customs Act, which allows duty recovery only from the importer on record.

2. Imposition of Penalty:
The Tribunal considered the statements of the appellants and the evidence presented during the investigation. It was found that Shri Rakesh Magoo and Shri John Miranda were actively involved in importing car electronic goods using the IEC codes of various firms, and they undervalued the goods. The Tribunal confirmed the penalties imposed on Shri Rakesh Magoo and Shri John Miranda, as well as on M/s Sai Dutta Clearing Agency Private Limited, for their involvement in the illegal imports and undervaluation.

3. Confiscation and Redemption Fine:
The Tribunal noted that the goods were not available for confiscation by the DRI and had been released upon final assessment by the jurisdictional Customs Authorities. Therefore, the Tribunal held that redemption fine was not imposable, citing the decision of the Hon'ble Bombay High Court in the case of CC (Exports) Vs. Sudarshan Cargo Pvt. Ltd.

4. Valuation of Imported Goods:
The Tribunal addressed the issue of valuation and the manner in which it was determined. The Tribunal found that the DFS printouts relied upon did not comply with Section 138C(4)(c) of the Customs Act and could not be admitted as evidence. The Tribunal also noted the lack of corroborative material evidencing any cash payments to the suppliers. Therefore, the Tribunal concluded that penalties could not be imposed based on the valuation charges.

Conclusion:
The appeals were disposed of with the Tribunal holding that no duty was payable by Shri Rakesh Magoo and Shri John Miranda. However, the penalties imposed on Shri Rakesh Magoo, Shri John Miranda, and M/s Sai Dutta Clearing Agency Private Limited were confirmed.