2023 (8) TMI 265 - AT - Customs

Undervaluation of imported goods - rejection of declared value - enhancement of value as per Section 14 of the Customs Act, 1962 read with Customs (Determination of Value of Imported Goods) Rules, 2007 or not - demand based on Contemporaneous imports - under valuation proved with clinching evidence or not - mis-description of the goods, as to quantity of the goods or change of country of origin or manipulation of invoices in the Bill of Entry or not - Confiscation - penalty - HELD THAT - It is appropriate to refer to the Hon ble Supreme Court‟s analysis of the statutory provisions relating to valuation under the Customs Act, 1962 in the case of CENTURY METAL RECYCLING PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND OTHERS 2019 (5) TMI 1152 - SUPREME COURT where it was held that Declared valuation can be rejected based upon the evidence which qualifies and meets the criteria of certain reasons . Besides the opinion formed must be reasonable. Reference to foreign journals for the price quoted in exchanges etc., to find out the correct international price of concerned goods would be relevant but reliance can be placed on such material only when the adjudicating authority had conducted enquiries and ascertained details with reference to the goods imported which are identical or similar and certain reasons exists and justifies detailed investigation. On perusal of the order of the lower adjudicating authority, it is clear that reliance is placed on the values of imports effected in certain Bills of Entry during the relevant time mainly depending upon general description of the goods and the country of origin. Crucial commercial details of these consignments on which reliance is placed to determine contemporaneous prices as to the type, quality, quantity imported whether under any contract or whether any advance paid or whether the supply from the manufacturer or trader or whether the import is from any stock lot, etc., are not ascertainable - There was no discussion by the original adjudicating authority as to how the values of contemporaneous imports of identical / similar goods have been arrived at. Further, the respondent has intimated the clearances of same commodity by other importers nearly at or around the same price during the relevant period during the adjudication proceedings. The impugned goods in all these appeals are imported in terms of various contracts entered into with the suppliers abroad. If any condition of the contract is contravened, it is for the contracting parties to settle among themselves and raising a doubt about the validity of the contract is not proper in the absence of any evidence that such a contract is entered into with any ulterior motive affecting the price. Further, revenue has discredited the contract prices as the respondent has not reportedly imported the entire contracted quantities. From the Show Cause Notice, the Order-in-Original and records, contract numbers and the quantity contracted for import are only mentioned. Actual total quantity imported and how much is the shortfall and how it is to affect the transaction prices declared is not forthcoming. The Ld. Authorised Representative and Ld. Advocate have referred to many judicial decisions as detailed in the above paragraphs. But, the facts obtaining in these appeals are clearly distinguishable. There is nothing illegal or improper in suspecting the declared values of imported silk by the appellant. But, under valuation has not been conclusively proved by the Revenue. There are no cogent grounds to allow these appeals - the order of lower appellate authority is not required to be interfered with - there is no need to discuss about confiscability of the impugned goods - appeals filed by Revenue are dismissed.

Summary

Issues Involved:
1. Enhancement of value of imported goods under Section 14 of the Customs Act, 1962.
2. Allegation of mis-declaration and confiscation under Section 111(m) of the Customs Act, 1962.
3. Liability for penal action under Section 112 A of the Customs Act, 1962.

Summary:

Enhancement of Value:
The main issue was whether the enhancement of the value of imported Thrown Silk Yarn/Raw Silk was in accordance with Section 14 of the Customs Act, 1962, read with Customs (Determination of Value of Imported Goods) Rules, 2007. The Revenue argued that the declared values were undervalued compared to contemporaneous imports and sought to enhance the values based on higher values of identical/similar goods imported during the same period. The Tribunal found that the lower adjudicating authority did not provide sufficient commercial details of the consignments relied upon for determining contemporaneous prices, and there was no evidence of mis-declaration or extra payments by the importer. The Tribunal held that the declared transaction values should be accepted in the absence of conclusive evidence of under-valuation.

Allegation of Mis-Declaration and Confiscation:
The Tribunal examined whether the allegation of mis-declaration against the importer was justified and if the orders for confiscation of the imported goods under Section 111(m) of the Customs Act, 1962, were legally maintainable. The Tribunal found no evidence of mis-declaration regarding the description, quantity, or country of origin of the goods. The imported silk was cleared under valid contracts, and there was no allegation of extra payments or related parties influencing the price. Therefore, the Tribunal concluded that the confiscation orders were not justified.

Penal Action:
The Tribunal also considered whether the importer was liable for penal action under Section 112 A of the Customs Act, 1962. Since the mis-declaration of values was not conclusively established, the Tribunal found no justification for imposing penalties on the importer.

Conclusion:
The Tribunal dismissed the Revenue's appeals, upholding the lower appellate authority's decision that the under-valuation was not proved with clinching evidence and that the declared transaction values should be accepted. The Tribunal also found no grounds for confiscation or penal action against the importer. The order of the lower appellate authority was affirmed, and the appeals filed by the Revenue were dismissed with consequential relief, if any.