2014 (2) TMI 974 - AT - Customs

Penalty for mis-declaration of goods - import of CRT picture tubes 14 CRT picture tubes - whether the Mis declaration is deliberate - Valuation of goods - Confiscation - Penalty u/s 112(a) - While the colour picture tubes for use in colour television are classifiable under sub-heading 85401190 where the basic customs duty is 12.5%, the data/graphic display tubes ( colour ) with phosphor dot Screen pitch smaller than 0.4 mm are classifiable under sub-heading 85404000 where the tariff rate itself is nil. Held that - Since the assessment is online and in normal course, the assessment would have been done online on the basis of declared description without seeing the invoice and without examination as bill of entry had been assessed online under Risk Management System under no assessment, no examination order and without any compulsory compliance requirement, the act of the appellant has to be treated as deliberate, as when the invoice mentioned the goods as stock lot of colour picture tubes and the goods were actually colour picture tubes meant for colour television, there was absolutely no reason for the appellant for mentioning the words data graphic display tubes colour with phosphor dot Screen pitch smaller than 0.4 mm in the bill of entry and at the same time, classifying the same under sub-heading 85404000 pertaining to data/graphic display tubes and claiming nil rate of duty on this basis. In the background in which the wrong description had been given, it has to be treated as deliberate. - the description of the goods had been deliberately mis -declared with intent to evade the duty so as to attract the provisions of Section 111(m). - Decided against the assessee. Declaration of valuation - Held that - The price of the goods in these bills of entry could be adopted for the goods, in question, if and only if, those bills of entry were in respect of import of identical goods or similar goods within the meaning of these terms as defined in the Customs Valuation Rules, in comparable quantity. Since, the details of the goods covered under these bills of entry have not been disclosed, it is not known as to whether goods imported under these bills of entry were also unbranded and of the same country of origin or the same were branded goods of different country of origin and also whether the quantities were comparable. Without such comparison, the unit import price of these bills of entry cannot be adopted in respect of the goods, in question. Penalty of ₹ 1.5 Lakh u/s 112 (a) maintained - Decided against assessee.

Issues Involved:
1. Misdeclaration of Goods
2. Misclassification of Goods
3. Valuation of Goods
4. Imposition of Penalty

Issue-wise Detailed Analysis:

1. Misdeclaration of Goods:
The appellant declared the imported goods as a "stock lot of colour picture tubes" with various screen sizes, claiming classification under heading 8540 4000. The initial examination by a junior officer suggested that the goods appeared old but unused and were unbranded. However, the Deputy Commissioner later examined the goods and concluded that they were new and not stock lot, leading to the conclusion that the goods were misdeclared.

2. Misclassification of Goods:
The appellant classified the goods under heading 8540 4000, which pertains to "data or graphic display tubes, colour with a phosphor dot screen pitch smaller than 0.4mm," attracting a nil rate of duty. The Deputy Commissioner, after examination, concluded that the goods were not data/graphic display tubes but were colour picture tubes classifiable under heading 8540 0090, which attracts a duty rate of 12.5%. The appellant's claim of wrong classification was deemed deliberate to evade customs duty.

3. Valuation of Goods:
The declared value of the goods was Rs.4.81 lakhs, which was enhanced to Rs.15.88 lakhs based on NIDB data. The appellant argued that the enhancement was arbitrary and that the goods were unbranded, making the comparison with NIDB data inappropriate. The Revenue, however, justified the enhancement based on the auction price of Rs.10 lakhs, which was significantly higher than the declared value, indicating undervaluation.

4. Imposition of Penalty:
The Additional Commissioner imposed a penalty of Rs.1.50 lakhs on the appellant under Section 112(a) of the Customs Act, 1962, for misdeclaration and undervaluation of goods. The Commissioner (Appeals) upheld this decision. The appellant argued that the penalty was unjustified as the goods were not cleared and were sold by auction. The Tribunal, however, maintained the penalty, concluding that there was deliberate misdeclaration and undervaluation with intent to evade duty.

Separate Judgments Delivered:

Majority Opinion:
The majority opinion, delivered by Member (Technical) and Member (Judicial), concluded that:
- There was deliberate misdeclaration of the description and classification of the goods.
- The declared value was significantly lower than the auction price, indicating undervaluation.
- The penalty of Rs.1.50 lakhs was justified and maintained under Section 112(a) of the Customs Act, 1962.

Dissenting Opinion:
Member (Judicial) disagreed with the majority on the following points:
- There was no deliberate misdeclaration of the description or value of the goods.
- The penalty imposed was unjustified as the goods were not cleared and were sold by auction.
- The enhancement of value based on NIDB data was inappropriate without proper disclosure and comparison of identical goods.

Final Order:
As per the majority order, the penalty of Rs.1.50 lakhs is maintained against the appellant, and the appeal is rejected.

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