2013 (6) TMI 418 - AT - Customs

Mis-declaration of value of the import - Revenue s grievance that the car imported from United Kingdom was not the country of manufacture but was Austria - levying of redemption fine and penalty - Held that - There is no dispute that the country of manufacture of the car in both cases is different from country of export. The car import policy being the law of the land which was subject matter of scrutiny by Customs and Import having been made under that policy, contravention of that law is prevented by Customs. The Assessee having contravened policy without the import being made from the country of manufacture defeats the spirit and object of the policy. That made the cars confiscable and the cars became smuggled goods liable to penal consequence of law of customs. Perusal of the import condition as per policy clearly throws light that legislature intended import of cars to enjoy notification benefit only if such import is made from the country of manufacture. The landing port should be the port of export and if it is in a land locked country, that may be imported from the adjoining country situated in the land locked of coastal line from which export was permissible. When the cars in question came from United Kingdom, it was exported from country of manufacture to UK and there after the cars were exported from U.K. into India destination. Therefore no inference can be drawn to equate the imports from country of manufacture. In view of observations having seen from the anxiety of Review Committee pointing out loss of Revenue, the matter should go back to Adjudicating Authority to confront the gravity of charge of violation of import policy and undervaluation of the imported car to the assessee along with review observation for leading their defence since there is clear case of under valuation and violation of mandatory conditions of import policy making the goods confiscable.

Summary

Issues:
1. Valuation of imported car from United Kingdom.
2. Imposition of redemption fine and penalty on the assessee.
3. Compliance with import policy regarding country of manufacture.

Analysis:

Issue 1: Valuation of imported car from United Kingdom
In the case, the Revenue contended that the imported car from the United Kingdom was undervalued by the assessee, as the country of manufacture was Austria, not the United Kingdom. The Revenue argued that the Adjudicating Authority failed to properly examine the value aspect of the imported car, causing prejudice to Revenue. The Review Committee highlighted the legal infirmity in the order, emphasizing the need for a proper valuation of the cars for the levy of duty, redemption fine, penalty, and interest. The Committee referred to discrepancies between the declared value and the actual value found online, leading to a recommendation for re-determination of the assessable value based on the true value of the car.

Issue 2: Imposition of redemption fine and penalty on the assessee
The assessee, in their appeal, argued against the imposition of redemption fine and penalty, claiming that the valuation issue was not considered during adjudication. The Review Committee found that the importer willfully suppressed the true value of the car to evade Customs duty, leading to a recommendation for an increase in the redemption fine and penalty imposed on the importer. The Committee highlighted the evasion of Customs duty due to misdeclaration of value and recommended the payment of the evaded duty along with interest, as well as penalties under relevant sections of the Customs Act.

Issue 3: Compliance with import policy regarding country of manufacture
The judgment emphasized the importance of complying with the import policy, which mandated that cars should be imported from the country of manufacture. The Review Committee pointed out that the import of cars from a different country than the country of manufacture rendered the goods liable to confiscation under the Customs Act. The judgment highlighted the legislative intent behind the import policy, requiring imports to be made from the country of manufacture to enjoy notification benefits. The matter was remanded to the Adjudicating Authority for re-adjudication, with a directive to consider evidence related to the violation of import policy and under-valuation, providing the assessee with an opportunity to defend their case.

In conclusion, the judgment focused on the proper valuation of imported cars, the imposition of fines and penalties for misdeclaration, and the necessity of complying with import policies regarding the country of manufacture. The case was remanded for re-adjudication to ensure a fair and thorough examination of the issues raised.