2008 (5) TMI 390 - AT - Customs

Confiscation, redemption fine and penalty - valuation - Held that - we find that no incriminating evidence have been found nor any duplicate invoices or suppression of invoices etc. are involved in this case. Therefore, while confirming the differential duty demand which has been made on the basis of comparable prices, we waive confiscation of the imported goods, imposition of redemption fine and penalty in this case - the Adjudicating Commissioner is not justified in ordering demand of interest on the differential duty payable - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Disputed valuation, demand of duty and interest, confiscation, redemption fine, penalty, provisional assessment, demand of interest under Section 18 of the Customs Act, 1962.

Disputed Valuation and Demand of Duty:
The appellants filed an appeal challenging the disputed valuation adopted by the Department, along with the demand of duty and interest. The advocate representing the appellants sought to limit arguments related to the disputed issue. The appellants decided not to challenge the demand of differential duty but contested the demand of interest, citing the absence of a provision for demanding interest under Section 18 of the Customs Act, 1962 at the material time. The Tribunal noted that the valuation declared by the appellants was not accepted by the Department, and a higher valuation was adopted based on a study of comparable goods. However, no incriminating evidence or suppression of invoices was found. Consequently, the Tribunal confirmed the differential duty demand but waived confiscation, redemption fine, and penalty due to the lack of incriminating evidence.

Imposition of Redemption Fine and Penalty:
The advocate for the appellants argued for the waiver of redemption fine and penalty, emphasizing that there was no suppression or misstatement of facts, and no incriminating evidence was found against the appellants. The Tribunal, after hearing both sides, found that the valuation was conducted based on comparable prices without any evidence of wrongdoing by the appellants. Therefore, the Tribunal decided to waive the redemption fine and penalty in this case.

Provisional Assessment and Demand of Interest:
The Tribunal addressed the issue of provisional assessment and the demand of interest. The goods were initially assessed provisionally at the declared valuation on execution of a bond and bank guarantee. The Tribunal held that since there was no provision for demanding interest under Section 18 of the Customs Act, 1962 at the material time for provisional assessment cases, the Adjudicating Commissioner's order to demand interest on the payable differential duty was not justified. Consequently, the Tribunal partly allowed the appeal, confirming the differential duty demand but waiving the confiscation, redemption fine, and penalty, and rejecting the demand for interest on the payable duty.

Conclusion:
In conclusion, the Tribunal upheld the differential duty demand based on a higher valuation of comparable goods but waived confiscation, redemption fine, and penalty due to the absence of incriminating evidence against the appellants. The Tribunal also ruled against the demand for interest on the payable differential duty in provisional assessment cases where no provision existed for such demand under Section 18 of the Customs Act, 1962 at the relevant time.