2005 (10) TMI 178 - AT - Central Excise

Demand - Confiscation - fine and penalty - Valuation (Customs) - clearance of parts for Computer and data cartridges - HELD THAT - The appellants are not able to give proper explanation for the existence of the parallel invoices. They only say that the parallel invoices indicate the list price and by negotiations they got the price reduced. They also urged the point that the foreign exchange remitted is only as per the declared value in the invoice submitted to the customers. In our view the parallel invoices issued after the date of filing of the Bills of Entry cannot be related to the goods imported under those Bills of Entry. Hence the prices found in the parallel invoices issued prior to the filing of the Bills of entry alone should be adopted for assessment purposes. Where the parallel invoices are issued later than the dates of filing of the Bills of Entry the declared value can be accepted. In the light of the above observation the original authority should re-compute the duty liability and the appellants shall pay the same. We cannot accept the contention of the appellants that no fine can be imposed in respect of goods which are already cleared. Once the goods are held liable for confiscation fine can be imposed even if the goods are not available. We uphold the finding of the misdeclaration in respect of the parallel invoices issued prior to the date of filing of the Bills of Entry. Hence there is misdeclaraiion and suppression of value and the offending goods are liable for confiscation u/s 111(m) of the Customs Act. Hence the imposition of fine even after the clearance of the goods is not against the law. Since the original authority has to re-compute the duty liability the imposition of fine as well as penalty u/s 112(a) of the Customs Act is kept open. In the light of the above observation we remand the matter to the original authority for de novo consideration in the light of the above observations. The orders should be issued within a period of three months from the date of receipt of this order.

Issues:
1. Undervaluation of imported goods leading to confiscation and penalty.
2. Legal validity of show cause notice under Section 28 of the Customs Act.
3. Applicability of case laws in determining under-valuation.
4. Use of incriminating documents like parallel invoices and cost analysis statement.
5. Imposition of fine and penalty after clearance of goods.
6. Appeal against non-imposition of mandatory penalty under Section 114A.

Analysis:

1. The case involved appeals against an Order-in-Original passed by the Commissioner of Customs regarding undervaluation of imported goods. The Revenue proceeded against the appellants based on incriminating documents like parallel invoices and a cost analysis statement. The Commissioner held that goods with undervaluation were liable for confiscation under Section 111(m) of the Customs Act and imposed a fine and penalty. The appellants challenged these findings before the Tribunal.

2. The Tribunal analyzed the legal validity of issuing a show cause notice under Section 28 of the Customs Act post-clearance of goods. It held that such notices could be issued based on investigations conducted subsequent to clearance, rejecting the contention that assessment review is mandatory before issuing notices. The Tribunal distinguished cited case laws and emphasized the importance of incriminating documents in determining undervaluation.

3. The appellants argued against under-valuation charges, citing case laws supporting their stance. They contended that payments were made through banking channels as per submitted invoices, challenging the basis for the charges. The Tribunal examined the relevance of contemporary imports and the adjudicating authority's findings, emphasizing the need for proper assessment based on evidence.

4. The Tribunal scrutinized the use of incriminating documents like parallel invoices and the cost analysis statement. It noted discrepancies in the documents and their impact on valuation. The Tribunal highlighted the need for authenticated documents for assessment purposes and the Commissioner's reliance on parallel invoices for determining values, categorizing them based on issuance dates.

5. Regarding the imposition of fines and penalties post-clearance, the Tribunal upheld the Commissioner's decision, emphasizing that fines could be imposed even after goods clearance if liable for confiscation. It directed a re-computation of duty liability and allowed for the imposition of fines and penalties under Section 112(a) of the Customs Act, remanding the matter for further consideration.

6. In a separate appeal by the Revenue, the issue of non-imposition of mandatory penalty under Section 114A was raised. The Tribunal rejected the appeal, citing the Apex Court's judgment on the retrospective effect of Section 114A. The Tribunal upheld the decision, concluding the proceedings without imposing the penalty.

This detailed analysis of the judgment highlights the key issues, legal interpretations, and the Tribunal's findings, providing a comprehensive overview of the case.

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