2024 (5) TMI 17 - AT - Customs

Undervaluation - Imports of high-end foreign cars - concessional duty benefit - Notification No.21/2002 Cus - Interest - Penalty - Whether the revenue authorities are correct in redetermining the assessable value of the car imported by the appellant - HELD THAT - The first appellate authority, while ordering the re-determination of the assessable value, has inter alia held that the imported vehicle was undisputedly new, which finding has again been accepted by the revenue without challenging the same. In the impugned order, the first appellate authority has referred to an alleged e-mail and an alleged original sale invoice raised by the Japanese dealer on the UK dealer, which according to the first authority, justify the fixing of assessable value at ₹49, 84, 163. Further, the Ld. first appellate authority has held that since the vehicle is held to be a new one, the same would also entitle the appellant for concessional rate of BCD. We have seen the invoices, one which was raised on the Broker at UK by the Japanese dealer and the other one which was raised by the UK Broker on the appellant; both are for two different cars; one refers to Ultimate Silver colour car carrying an invoice amount of 8,900,000 Yen and the other refers to a Black colour car carrying an invoice amount of 63,000 USD. That apart, invoice raised by the Japanese dealer is dated 18.08.08, but the invoice raised by the UK dealer and the appellant is 30.06.08 which is much before the date of even purchase by the UK dealer, hence, there has been much ado about nothing insofar as the invoices are concerned and therefore, the alleged difference in the purchase value by the appellant as made out in the Order-in-Original which was upheld in the impugned order lacks any merit. We reiterate that it was the revenue, which alleged irregularities/under-valuation and hence, it was incumbent upon the revenue to prove its case. But however, other than uncorroborated e-mail and two different invoices, no documentary evidence is furnished before us by the revenue, in support. Hence, we cannot agree with the stand of the revenue which lacks merit, for which reason the impugned order becomes unsustainable. In the result, we set aside the impugned order and allow the appeal with consequential benefits, if any, as per law.

Summary

Issues: Determination of assessable value of imported car, Alleged under-valuation, Concessional duty benefit, Liability for penalties under Customs Act.

Assessable Value of Imported Car:
The appellant imported a black Nissan GTR car from Japan, declaring the cost at US dollars 63,000. The proper officer assessed the value at &8377;32,06,952 upon arrival in India. The appellant availed concessional duty benefit under Notification No.21/2002-Cus. An investigation alleged under-valuation due to collusion with a third party, resulting in differential duty demand. The adjudicating authority referred to various sources to determine assessable value, including a retracted statement. The first appellate authority reduced the assessable value, accepted by the revenue without challenge. The appellant's declared value was not accepted, prompting the re-determination of differential duty.

Alleged Under-Valuation:
The investigation alleged collusion with a third party, leading to under-valuation and wrongful duty benefit. The appellant rebutted the allegations, but the original authority confirmed the differential duty, leading to the appeal. The first appellate authority held the imported car as new, directing re-determination of assessable value at &8377;49,84,163. The revenue accepted this finding without challenge. The lack of evidence beyond an email and invoices led to the impugned order being set aside, as the revenue failed to prove under-valuation.

Concessional Duty Benefit:
The appellant availed concessional duty benefit under a specific notification. The first appellate authority recognized the appellant's entitlement to the concessional rate of Basic Customs Duty (BCD) due to the vehicle being deemed new. The revenue's failure to provide substantial evidence beyond email correspondence and invoices led to the unsustainable nature of the impugned order.

Liability for Penalties under Customs Act:
The short points for consideration included whether the appellant was liable for penalties under Sections 114A & 114AA of the Customs Act, 1962. The lack of substantial evidence provided by the revenue, beyond uncorroborated email and invoices, led to the impugned order being set aside, and the appeal being allowed with consequential benefits as per law.