2013 (5) TMI 97 - AT - Customs

Appellant imported food products and declared assessable value through bill of entry which n the view of department is not correct/undervalued. Accordingly demand of differential duty/interest & penalties imposed - Held that - However, in this case there is admission by the appellant admitting undervaluation to the extent of 30%. Since that is the only evidence available the differential duty demand should be restricted to loading of declared price by 30% only. Further we reduce the redemption and penalty. Accordingly appeal is partially allowed.

Summary

Issues: Undervaluation of imported goods, confiscation of goods, imposition of redemption fine and penalty, appeal against the order of Commissioner (Appeals).

Undervaluation of imported goods:
The appellant imported food supplements and declared assessable values for two Bills of Entry. Revenue conducted inquiries and found the declared prices to be significantly lower than the supplier's price list. The appellant admitted to undervaluing the goods by 30% and deposited the balance Customs duty. The adjudication fixed revised assessable values based on the price list and a 30% loading. The appellant argued that the price list may not reflect the actual value in international trade due to various factors. The Tribunal agreed that the price list alone is not a sufficient basis for valuation and restricted the differential duty demand to a 30% loading as per the appellant's admission.

Confiscation of goods and imposition of redemption fine and penalty:
The goods were confiscated under Section 111 of the Customs Act, 1962, and a redemption fine and penalty were imposed. The redemption fine of Rs. 1,00,000/- and Rs. 30,000/- for the two Bills of Entries, along with a penalty of Rs. 60,000/- under Section 112 of the Customs Act, 1962, were deemed harsh by the appellant. The Tribunal found the redemption fine and penalty disproportionate to the mis-declaration involving a differential duty of about Rs. 85,000/-. Consequently, the redemption fine was reduced to Rs. 60,000/- and the penalty to Rs. 15,000/-.

Appeal against the order of Commissioner (Appeals):
The appellant filed an appeal with the Commissioner (Appeals) who upheld the decision. The appellant then appealed to the Tribunal, arguing that Revenue had not produced evidence of undervaluation and that the redemption fine and penalty were excessive. The Tribunal considered both sides' arguments, acknowledged the appellant's admission of undervaluation, and reduced the redemption fine and penalty due to the disproportionate nature of the penalties in relation to the mis-declaration amount. The appeal was partially allowed, modifying the redemption fine and penalty amounts accordingly.