2024 (5) TMI 142 - AT - Customs

Misdeclaration in the quantity of goods imported - enhancement of the value - Transaction value - demand of duty - confiscation - Penalty - value enhanced by merely relying on NIDB data without supplying details to the appellant - No reasons stated in the order for rejection of the transaction value - whether there are sufficient grounds for rejection of transaction value, enhancement of value of goods - HELD THAT - There is no discussion as to the details of the Bills of Entry which have been relied by the adjudicating authority. The place of import, the foreign supplier, quantity of the goods, the nature of the goods imported etc., would affect the value of the goods imported. These details are to be discussed by the adjudicating authority as well as the Commissioner (Appeals) to hold that there are sufficient grounds to reject the transaction value and for enhancing the value of the goods. We do not see such discussions either in the order passed by the adjudicating authority or the Commissioner (Appeals). Thus, we find that the enhancement of the value of goods cannot be sustained and requires to be set aside. Order accordingly. On perusal of the records it is seen that in the bill of entry, packing list as well as other documents the quantity is declared in kilograms. However, payment of duty is on the basis of measurement in meters. On examination it was found that instead of 11,815 kilograms as declared by appellant, the total quantity imported is 11,900 kilograms. We note that the said difference in quantity is too low so as to allege intentional misdeclaration of the goods. There will be some variation in the quantity during the voyage of the goods. Taking into consideration these aspects as put forth by the Ld. Counsel for appellant, we hold that the allegation of mis-declaration of the goods cannot sustain. Consequently, the Redemption fine and penalty imposed are set aside. In the result, the impugned order is set aside. The appeal is allowed with consequential relief if any.

Summary

Issues:
- Undervaluation of imported goods
- Allegation of misdeclaration in quantity of goods imported
- Imposition of redemption fine and penalty

Undervaluation of imported goods:
The appellant filed Bill of Entry declaring the goods as knitted interlining at a certain value. After examination, it was found that the goods were different than declared. The department alleged undervaluation and enhanced the value of the goods. The appellant challenged this decision, arguing that the principles of natural justice were violated as they were not provided copies of the Bills of Entry relied upon for enhancing the value. The Ld. Counsel contended that the value cannot be enhanced solely based on NIDB data without providing details to the appellant. The Tribunal found that there was no proper discussion or annexure regarding the Bills of Entry relied upon, leading to the conclusion that the enhancement of the value of goods cannot be sustained. The order was set aside.

Allegation of misdeclaration in quantity of goods imported:
The penalty was imposed on the appellant for alleged misdeclaration in the quantity of goods imported. The appellant declared the quantity in kilograms, but the duty was paid based on the measurement in meters. The department found a slight difference in the quantity imported compared to what was declared. The appellant argued that the difference was insignificant and unintentional as they imported the goods in kilograms. The Tribunal agreed with the appellant, noting that the variation in quantity during the voyage of goods is common. As there was no intentional misdeclaration, the redemption fine and penalty imposed were set aside.

Imposition of redemption fine and penalty:
The adjudicating authority imposed a penalty and redemption fine on the appellant. The department argued that the appellant was provided with details of NIDB data and that the under valuation was significant. However, the Tribunal found that there was no proper discussion or annexure regarding the NIDB data. The Tribunal held that the penalty and redemption fine were not justified as there was no intentional misdeclaration of goods by quantity. Therefore, the impugned order was set aside, and the appeal was allowed with consequential relief.