2024 (4) TMI 641 - AT - Customs

Valuation of imported goods - rejection of value - enhancement of value, on the basis of a price quote appearing on the internet website - Confiscation on account of mis-match colour, batch number and batch quantity, which occurred on account of mistake on the part of the foreign supplier - confiscation also on the ground that one batch number being omitted to be mentioned by mistake in the Test Certificate of the Testing Laboratory. Enhancement of value - HELD THAT - Merely on the basis of the quote available on particular website it is not sufficient to enhance the value of the imported goods. at the same time the value appearing on website is abnormally high i.e. 0.36 per piece therefore the matter needs to be reconsidered on the basis of other material, if any. It is also observed that for applying the value of contemporaneous import it will also be important to see various factor such as similar goods, same quality, country of the export and the time of import. Therefore, merely on the basis of the quote available on the website value cannot be enhanced. Confiscation of the goods on the basis mis-match of colour, batch number and batch quantity - appellant submitted that the mistake has occurred in the part of the supplier which has subsequently been clarified by the supplier - HELD THAT - It is prima facie found that because of this error it does not conclusively lead to any mala fide on the part of the appellant. The Adjudicating authority must reconsider the clarification given by the supplier and also to see that whether there is any intention to evade/ short paid the custom duty. It is also the submission of the appellant that even though this mistake has occurred the total quantity of the goods is matching. This aspect also needs to be re-looked into by the adjudicating authority. Confiscation on allegation that in test certificate one batch number is mentioned wrongly - HELD THAT - It is found that it was a typographical error and the testing laboratory has rectified the error. Once the typographical error has been rectified, the mistake dose not remains and after rectification only for the mere typographical error goods cannot be confiscated. Therefore the adjudicating authority has to reconsider this matter accepting the rectification of the error done by the concerned laboratory. The entire matter needs to be reconsidered therefore the impugned order is set aside. The appeals are allowed by way of remand to the adjudicating authority for passing a fresh order.

Summary

Issues involved:
1. Whether the transaction value of the imported goods can be rejected and enhanced under Rule 5 of the Customs Valuation Rules, 2007 based on a price quote from a website when there are no contemporary imports at that price.
2. Whether the imported goods are liable to confiscation under Section 111 (m) of the Customs Act, 1962 due to mismatch in color, batch number, and quantity.
3. Whether the imported goods are liable to confiscation under Section 111 (d) of the Customs Act, 1962 due to a typographical error in a Test Certificate.

Issue 1:
The appellant argued that the rejection of the transaction value and enhancement under Rule 5 based on a website quote without contemporaneous imports is legally flawed. They emphasized the need for comparable prices of imported goods in India. The Tribunal found the reliance on the website quote insufficient and the value abnormally high, suggesting a reconsideration based on other factors.

Issue 2:
Regarding confiscation under Section 111 (m) due to color and batch discrepancies, the appellant contended that it was a supplier's mistake with no revenue loss, thus not justifying confiscation. The Tribunal agreed that the error did not indicate malice on the appellant's part and advised a review by the adjudicating authority considering the supplier's clarification and intent to evade custom duty.

Issue 3:
Concerning confiscation under Section 111 (d) due to a batch number error in a Test Certificate, the appellant argued it was a typographical mistake rectified by the testing laboratory. The Tribunal held that goods cannot be confiscated for a mere typographical error post-rectification, directing the adjudicating authority to reconsider the matter acknowledging the error correction.

The Tribunal set aside the impugned order, remanding the case to the adjudicating authority for a fresh decision, ensuring the appellant's right to a fair hearing.