2014 (11) TMI 785 - AT - Customs

Valuation of goods - Misdclaration of goods - Redemption fine and penalty - Held that - the word for amplifier is added with a malafide intention so as to justify lower assessable value of the goods. Inasmuch as there is admitted mis-declaration in the Bill of Entry, the value reflected therein, as transaction value, has to be rejected. inquiries made by the Revenue from CEAMA revealed that the computed value of the product should be US 11 or US 12. The Revenue has further taken the separate cost of various components of the product and has justifiably arrived at a lower value of US 8.67. The said value stand accepted by Shri Amarjit Singh Kalra, in his statement recorded during investigation. The firm vide his letter dated 30.11.08 has also accepted the said value and has agreed to collect the goods on payment of duty on the said value. In view of the above, we find no justifiable reason to interfere in the impugned order of the Commissioner as regards the value of the goods - Revenue has not conducted any inquiry in respect of margin of profit for the purpose of fixing the redemption fine. The said data is also not available before us but keeping in view the quantum of duty, which is be around ₹ 9,00,000, we reduce the redemption fine to ₹ 3,00,000 - No reason to interfere with penalty - Decided partly in favour of assessee.

Summary

Issues:
Under-valuation of imported goods, Mis-declaration in Bill of Entry, Confiscation of goods, Imposition of penalty on importing firm and its Director.

Under-valuation of imported goods:
The case involves the import of 'PCB board mounted' goods by the appellant, declared as 'PCB board mounted for amplifier' at a value of US$ 2.85 per piece, later found to be 'PCB board mounted for TV' during investigations. The value was further assessed at US$ 8.67 per piece based on inquiries and statements. The Commissioner confirmed the enhanced value, duty demand, and imposed penalties. The Tribunal upheld the value assessment, rejecting the appellant's contention of a mistake in description, as 'for amplifier' was added with a mala fide intention to lower the assessable value. The accepted value of US$ 8.67 per piece was maintained, and the Tribunal found no reason to interfere with the Commissioner's decision on the value of goods.

Mis-declaration in Bill of Entry:
The appellant's claim that the description change from 'PCB board mounted' to 'PCB board mounted for amplifier' was a mistake by the Customs House Agent (CHA) was dismissed as the addition of 'for amplifier' was intentional to justify a lower value. The Tribunal emphasized that the mis-declaration in the Bill of Entry led to the rejection of the transaction value. The investigations revealed a computed value of US$ 11 to US$ 12, later accepted at US$ 8.67 per piece by the appellant. The Tribunal upheld the Commissioner's decision on the mis-declaration and value assessment, highlighting the lack of justification for interference.

Confiscation of goods:
Following the under-valuation and mis-declaration, proceedings were initiated for the enhancement of value, duty demand confirmation, and confiscation of goods. The appellant was given the option to redeem the confiscated goods on payment of a redemption fine of &8377; 5,00,000. The Tribunal reduced the redemption fine to &8377; 3,00,000 considering the duty amount but upheld the confiscation decision. It was noted that no inquiry was conducted regarding the profit margin for fixing the redemption fine.

Imposition of penalty on importing firm and its Director:
Penalties of &8377; 2,00,000 on the importing firm and &8377; 1,00,000 on the Director were imposed for mis-declaration and under-valuation. The Tribunal found the firm's penalty reasonable given the findings, but set aside the separate penalty on the Director, stating it was not justified as penalties were already imposed on the firm. The Tribunal upheld the firm's penalty but removed the penalty on the Director.

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