2023 (10) TMI 759 - AT - Customs

Disposal of application filed under section 129B of Customs Act, 1994 - rectification of error apparent on record that came to be rejected - bar of limitation in section 28 of Customs Act, 1962 - acceptability of facts relating to the import and assessment under section 17 Customs Act, 1962 - Suppression / mis-representation or not - levy of penalty u/s 114A of CA - extended period of limitation. HELD THAT - In the erstwhile framework wherein acceptance of declared value as transaction value could be jeopardized by the latitude of deviating circumstances, determination of consequent duty liability did not necessarily imply misdeclaration of value and it could well be the inexorable purpose of rule 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 that may have given rise to short payment owing to the transactional circumstances having been suppressed at the time of assessment with its own consequence. Had the circumstances which prevailed prior to 1998, depicted in the decision of the Hon ble Supreme Court in EICHER TRACTORS LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI 2000 (11) TMI 139 - SUPREME COURT , and in accord thereof, be found to have justified the invoking of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 for re-determination of the assessable value by addition to the extent of concealed price of procurement, it would well have been within the scheme of law to confiscate the goods by resort to section 111 of Customs Act, 1962. The fresh determination would have been a consequence of non-compliance with section 14 of Customs Act, 1962 and rule 4 (2) of the said rules arising from deliberate misrepresentation of the transaction value in filing bill of entry. Confiscation of goods - HELD THAT - Section 111(m) of Customs Act, 1962 may be invoked only upon material particulars being misdeclared and this detriment is in addition to duty liability determined under section 28 of Customs Act, 1962. For such confiscation to be correct in law, it is necessary that the circumscribing circumstances must exist; the value itself has not been established as misdeclared even if the said value was placed on record for assessment without making known the circumstances in which the same goods had been procured from the manufacturer at higher price - A finding on inapplicability of confiscation did not necessarily extend to suppression/ misrepresentation deployed for enhancement of value for assessment. Levy of penalty u/s 114A of CA - HELD THAT - The legislative intent of compartmentalization of the two is evident in the incorporation of section 114A in Customs Act, 1962 that empowered imposition of penalty in consequence of such suppression/misrepresentation and explicitly excluding recourse to the penalty consequential to misdeclaration in proceedings for recovery of short paid duty - the submission of the appellant cannot be accepted that relief from confiscation amounts to relief from being subjected to the extended period for recovery of duty under section 28 of Customs Act, 1962. Time limitation - HELD THAT - As no new facts pertaining to circumstances in which the parallel transaction with manufacturer of the impugned goods was not tantamount to suppression/misrepresentation is on record and the non-applicability of the re-determined value is not in dispute in these proceedings, there are no reason to set aside the demand on ground of limitation. Appeal dismissed.

Summary

Issues:
The issues involved in the judgment are the application of the extended period under section 28 of the Customs Act, 1962, the acceptability of facts relating to import and assessment under section 17 of the Customs Act, 1962, the distinction between 'suppression/misrepresentation' and 'misdeclaration' for independent consequences, and the concurrence of findings on confiscation and limitation under the Customs Act, 1962.

Extended Period under Section 28:
The Tribunal deliberated on the application of the extended period under section 28 of the Customs Act, 1962, which allows for a longer period for recovery of duties in cases of collusion or suppression of facts. The case involved an appeal by M/s Shashi Dhawal Hydraulics Pvt Ltd regarding short-paid import duties on 'David Brown hydraulic pumps'. The Tribunal examined whether the circumstances warranted the invocation of the extended period, focusing on the existence of suppression/misrepresentation that influenced the valuation of imported goods. The Tribunal emphasized the importance of establishing suppression/misrepresentation to justify the application of the extended period for duty recovery.

Acceptability of Facts under Section 17:
The judgment also addressed the acceptability of facts related to import and assessment under section 17 of the Customs Act, 1962. The Tribunal considered whether the facts presented by the appellant justified restricting the demand under section 28 to the normal period of limitation. The assessment involved evaluating the transactions between the appellant's sister concern and the manufacturer of the imported goods, highlighting the need to adhere to Customs Valuation Rules for determining the assessable value. The Tribunal emphasized the significance of factual accuracy in assessing duty liability under the Customs Act.

Distinction between Suppression/Misrepresentation and Misdeclaration:
Another key aspect of the judgment was the distinction between 'suppression/misrepresentation' and 'misdeclaration' for independent consequences. The Tribunal analyzed the implications of these terms in the context of duty recovery and confiscation under the Customs Act, 1962. The judgment underscored the legislative intent behind differentiating between suppression/misrepresentation and misdeclaration, particularly in imposing penalties and addressing non-compliance with valuation rules. The Tribunal's decision highlighted the nuanced interpretation of these terms in customs proceedings.

Concurrence of Findings on Confiscation and Limitation:
Lastly, the judgment discussed the concurrence of findings on confiscation and limitation under the Customs Act, 1962. The Tribunal examined the interplay between confiscation provisions and limitation periods, emphasizing the need for specific circumstances to justify confiscation under section 111(m) of the Act. The judgment clarified that relief from confiscation does not necessarily equate to relief from the extended period for duty recovery. By analyzing the legislative framework and case law precedents, the Tribunal dismissed the appeal based on the lack of new facts supporting a challenge to the duty demand on limitation grounds.