2016 (4) TMI 368 - AT - Customs

Enhancement of value - Enhanced only on the basis of NIDB data without rejecting the transaction value - Import of goods describing as Stainless Steel Coils Grade 201 Ex Stock but found of prime quality and weight was also found in excess - Held that - there is neither any allegation nor any evidence on record to show that the value agreed upon between the importer and the exporter does not reflect the correct position. As the similar issues are considered in number of earlier decisions it is held that adoption of NIDB Data without any other evidence on record to establish the transaction value is incorrect and not proper and justified. Also revenue has not made any efforts to reject the transaction value. There is virtually no evidence on record to indicate that the value agreed upon between the importer and the exporter is not correct or any consideration of the goods has flown back to the exporter from the appellant. If that be so the transaction value would reflect the correct assessable value of the imported items. Otherwise also there is catena of decisions holding so. Therefore the value cannot be enhanced. Imposition of penalty - Held that - imposition of penalty of 25, 000/- on the importing firm is not justified in as much as the Appellate Authority has himself arrived at a finding in favour of the assessee. Having held that there was no malafide on the part of the importer it was not proper for the Appellate Authority to impose penalty on the firm. No tests have been carried out no experts opinion obtained and as such it is difficult to accept the Revenue s proposal that the goods were not of the Grade declared by the assessee and were of higher Grade. However apart from observing that there was no willful mis-declaration by the importer so as to avoid incidence of a higher duty department has also observed that even a small percentage of the excess goods covered by one of bills of entries was also not at the instance of the importer. However in spite of that department has imposed penalty on the importer. Therefore the said part of the impugned order of Commissioner (Appeals) is self-contradictory thus not calling for imposition of any penalty on the importer. - Decidde in favour of appellant with consequential relief

Summary

Issues: Valuation of imported goods based on NIDB data, Mis-declaration of goods quality, Imposition of penalties

Valuation of Imported Goods:
The case involved an importer who filed bills of entries for Stainless Steel Coils Grade 201 "Ex Stock" imported from China. The appraisal raised concerns about the quality and weight discrepancies, leading to proceedings for enhancing the value of the goods. The Adjudicating Authority increased the value based on NIDB Data, leading to confiscation and penalties. On appeal, the Commissioner (Appeals) noted the lack of evidence for prime quality goods and reduced penalties. However, the Commissioner upheld the value enhancement based on NIDB data. The Tribunal analyzed the reliance on NIDB data, emphasizing the need to reject transaction value before using alternative methods. They found no evidence to dispute the agreed value between importer and exporter, leading to the decision that NIDB data was not a valid basis for valuation enhancement. Citing previous decisions, the Tribunal set aside the impugned orders, allowing the appeal against the valuation enhancement.

Mis-declaration of Goods Quality:
The examination of the goods at clearance suggested prime quality, contrary to Grade 201 "Ex Stock" declaration. The Commissioner (Appeals) highlighted the lack of concrete evidence supporting the goods' actual quality. The Tribunal echoed this sentiment, questioning the reliance on visual examination without expert opinions or tests. They noted the absence of willful mis-declaration by the importer and the self-contradictory nature of the penalty imposition, ultimately ruling against penalizing the importer for the quality discrepancy.

Imposition of Penalties:
Regarding penalties, the Commissioner (Appeals) reduced the fines based on the lack of evidence implicating the importing firm or its Director. The Tribunal found the penalty imposition contradictory, especially considering the absence of malafide intent by the importer. They concluded that penalties were unwarranted, aligning with the Commissioner's observations. The Tribunal's analysis focused on the lack of evidence supporting penalties and the absence of intentional misrepresentation by the importer, leading to the decision to overturn the penalties imposed on the importing firm and its Director.

In conclusion, the Tribunal's judgment addressed the issues of valuation based on NIDB data, mis-declaration of goods quality, and the imposition of penalties. The decision emphasized the importance of rejecting transaction value before resorting to alternative valuation methods, questioned the reliance on visual examination for determining goods quality, and deemed the penalties unjustified due to the lack of evidence supporting intentional wrongdoing by the importer.