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2025 (1) TMI 359 - AT - CustomsRecovery of differential customs duty with penalty under section 112(a) (ii) and 114 (AA) of the Customs Act, 1962 - self-assessed transaction value was rejected and re-determination of the value - undervaluation of the goods - no opportunity for the pre-show cause notice consultation was provided - Violation of principles of natural justice. Violation of principles of natural justice - no opportunity for the pre-show cause notice consultation was provided - HELD THAT - The pre-liminary contention raised by the learned counsel for the appellant that no opportunity for the pre-show cause notice consultation was provided, needs to be rejected out rightly as from the records of the case, it is found that the appellant had been evading the investigation as despite service of summons dated 09.04.2019, 16.05.2019, 24.10.2019 and 21.02.2020 seeking their appearance on the dates specified, the appellant failed to appear. Once the appellant had chosen not to cooperate with the Department, the question of providing the pre-show cause notice consultation does not arise - thee are no violation of the mandatory provisions of providing pre-show cause notice consultation to the appellant. Whether there was any mis- declaration in the valuation of the goods imported by the appellant? - HELD THAT - The investigation was initiated on the basis of an intelligence that many Delhi based importers were engaged in suppression of actual transaction value and resorted to gross undervaluation in import of Automotive Windshield (Automotive Safety Glass) of assorted sizes for various models of vehicles and the appellant was one of such importers. Search of the office premises of the appellant company on 12.10.2018, resulted in recovery of a CPU, printouts were taken from the email of certain documents including actual invoices under a Panchnama of the same date - From the recovery of invoices, it is evident that two sets of parallel invoices were maintained, one was the actual invoice bearing higher valuation and the other parallel set of invoice of lower valuation was for the purpose of presentation before the customs for assessment. The apparent intent in resorting to such unlawful means was to suppress the actual transaction value so as to evade duty on the higher amount. Once the goods imported are found to be mis-declared in valuation, the declared value needs to be rejected under rule 12 of CVR, 2007. Here the appellant has indulged in manipulation of the invoices and fraudulently suppressed the actual transaction value of the goods imported by them so as to evade the customs duty on higher valuation and therefore, the declared value has been rightly rejected in terms of rule 12 - there are no error in determining the value of the goods on the basis of the actual invoices. In fact, there can be no better evidence of correct transaction value, as reflected in the original invoices issued by the foreign supplier and which has been admitted by the appellants and in fact, Jaspreet Singh had admitted to make the payment of duty on that basis. The department has adduced direct evidence of undervaluation. The modus operandi between Shri Jagmohan Kaushal and Shri Jaspreet Singh clearly establishes a case of conspiracy and in view of the settled principle it is therefore, impossible for the department to unravel every link of the transaction, many facts relating to these illicit transactions remain in the knowledge of the person concerned, CC, Madras vs. D.Bhoormull. The department has sufficiently discharged the burden of proving the undervaluation, which is unrebutted by the appellant in the absence of any substantial evidence. Since it is an established case of mis-declaration, under valuation and suppression of actual invoices, the goods are liable for confiscation as per section 111(m) of the Act - In view of the reasoning for invocation of the extended period of limitation and the findings recorded by the adjudicating authority, the penalty imposed on the appellant under section 114(A) and 114(AA) affirmed. No interference is called for even on the quantum of penalty in view of the discussion on merits. Conclusion - The mis-declaration and undervaluation warrant rejection of declared values and imposition of penalties. Appeal dismissed. 1. ISSUES PRESENTED and CONSIDERED The core legal questions addressed in this judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Mis-declaration and Undervaluation
Rejection and Re-determination of Transaction Value
Penalties and Extended Limitation Period
3. SIGNIFICANT HOLDINGS
The judgment provides a comprehensive analysis of the appellants' conduct, affirming the lower authority's decision to impose penalties and re-determine the transaction value based on actual invoices. The court's reasoning underscores the importance of compliance with customs regulations and the consequences of fraudulent practices.
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