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2005 (5) TMI 217 - AT - CustomsValuation (Customs) - Transaction value - Enhancement of value - Misdeclaration of description of the goods - Demand and penalty - HELD THAT - The Revenue is relying on the imports of similar goods in Mumbai. However the copies of the Bills of Entry are not available. The appellant contends that without giving him the copy of the Bills of entry relied on by the Revenue it would not be proper to demand the duty on enhanced value. He contended that it would be a violation of the principles of natural justice. He also contended that in the absence of details it cannot be said that the goods imported by the appellants and the goods pertaining to the Bills of entry relied on by the revenue are identical. We find that the OIO has no merits in as far as demand of duty is concerned. Since the appellants had not contested the mis-declaration of the description of the goods the penalty imposed u/s 112(a) is justified. Hence we set aside the demand of duty. Since the duty is set aside the penalty is leviable only for mis-declaration. Hence we reduce the penalty to Rs. 1, 00, 000/- (Rupees One lakh only). The appeal is disposed of in above terms.
Issues: Mis-declaration of goods description and value, reliance on contemporaneous imports, application of Customs Valuation Rules, imposition of penalty
Mis-declaration of Goods Description and Value: The appeal was filed against an order passed by the Commissioner of Customs, Cochin, regarding mis-declaration of goods. The appellant declared the goods as "motors for compressors" in the Bill of Entry, but upon examination, it was revealed that the goods were actually compressors for air-conditioners. The Revenue compared the declared value with information from Mumbai Customs House, showing higher values for similar goods. The Commissioner fixed the value of the imported compressors at US $ 135 per piece, higher than the declared value of US $30. A demand of Rs. 9,43,447/- was confirmed, along with a penalty of Rs. 8,00,000/-. The appellants challenged the order, arguing that the relevant Bill of Entry from Mumbai was not produced, and there was no evidence that the goods imported in Mumbai were identical to those imported by the appellants. The Tribunal noted the principles of natural justice and held that without the Bills of Entry relied upon by the Revenue, it could not be concluded that the goods were identical. The demand of duty was set aside, but the penalty for mis-declaration was upheld, albeit reduced to Rs. 1,00,000/-. Reliance on Contemporaneous Imports and Customs Valuation Rules: The Revenue relied on information from Mumbai Customs House to establish the value of the imported compressors. The Revenue argued that the goods imported in Mumbai were identical to those imported by the appellants, justifying the adoption of contemporaneous value. However, the Tribunal emphasized the need for concrete evidence and held that without the Bills of Entry, it could not be assumed that the goods were identical. The Tribunal referred to previous judgments, including the case of Saahil Trends v. CC (Prev), Ahmedabad, highlighting that the value enhancement based on unavailable Bills of Entry was not justified. The Tribunal also cited the case of Finolex Industries Ltd. v. CCE, Pune, emphasizing that rejection of transaction value solely based on higher prices of other importers was not permissible under the Customs Act. The Tribunal ultimately set aside the demand of duty but reduced the penalty imposed on the appellants. Imposition of Penalty: The appellants did not contest the mis-declaration of the goods description, leading to the imposition of a penalty under Section 112(a). The Tribunal justified the penalty but reduced it to Rs. 1,00,000/- since the duty demand was set aside. The Tribunal's decision highlighted the importance of accurate declaration of goods to avoid penalties and emphasized the need for proper evidence to support value assessments in customs cases. This judgment underscores the significance of providing concrete evidence, adherence to Customs Valuation Rules, and ensuring fair proceedings in customs cases involving mis-declaration of goods and values. It emphasizes the principles of natural justice and the need for transparency and accuracy in customs assessments to prevent unjust penalties and demands.
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