2017 (5) TMI 740 - AT - Customs

Rectification of mistake - import of CD s - valuation - Held that - the goods in this case were sold only to the persons who were having agreement with the owner of licence i.e M/s Microsoft. Hence in such case the value can be determined under Rule 8 by giving reasonable flexibility towards expenses taxes and profit margins. Thus the Rule 7 has got no application. Extended period of limitation - Held that - it is only after detailed investigation by the department the arrangement of payments made in complex manner was unearthed. Since the facts were suppressed and wrongful declaration was made consequentially the extended period has been rightly invoked. Redemption fine - penalty - Held that - the goods were imported by wrongful declaration. The facts were concealed from the department - redemption fine and penalty upheld. ROM application dismissed.

Issues Involved:
Rectification of mistake in Tribunal's order regarding customs duty on media, valuation under Customs Valuation Rules, applicability of extended period for demand, reliance on previous legal decision for bonafide mistake, confiscation of provisionally assessed goods, imposition of penalty on provisionally assessed goods.

Analysis:

1. Rectification of Mistake in Tribunal's Order:
The Applicants sought rectification of the Tribunal's order on various grounds, including the levy of customs duty on media alone under Heading No.85.24. However, the Tribunal found this submission untenable, emphasizing that the value of software, including royalty, must be considered for duty levy. The adjudicating authority's detailed findings were accepted by the Tribunal, dismissing the Applicant's contention.

2. Valuation under Customs Valuation Rules:
The Applicant argued for valuation under Rule 7 instead of Rule 8, providing details of prices of import goods sold post-import in India. The Tribunal noted that the submission was made on the extended period of limitation, and explained why valuation under Rule 7 was not appropriate. The Tribunal considered the price list of similar goods as a benchmark, concluding that Rule 8 should apply due to the specific circumstances of the case.

3. Applicability of Extended Period for Demand:
The Applicant claimed that the extended period for demand was not applicable as they had disclosed the payment of customs duty based on media value. However, after a detailed investigation revealed suppressed facts and wrongful declarations, the Tribunal upheld the invocation of the extended period, as the arrangement of payments was complex and misrepresented.

4. Reliance on Previous Legal Decision for Bonafide Mistake:
The Applicant cited a legal decision to support their claim of non-payment of duty being a bonafide mistake. However, the Tribunal found that the facts were concealed, and wrongful declarations were made, justifying the imposition of penalties and redemption fines due to imported goods being cleared provisionally based on misrepresented information.

5. Confiscation of Provisionally Assessed Goods and Penalty Imposition:
Regarding the confiscation of provisionally assessed goods and penalty imposition, the Tribunal upheld these actions due to the wrongful declaration and concealment of facts by the Applicants. Out of 49 consignments, only 4 were cleared provisionally, while the rest were finally assessed, leading to the conclusion that confiscation and penalties were justified based on the circumstances of the case.

In conclusion, the Tribunal dismissed the rectification of mistake application, maintaining the original order based on the detailed analysis and findings presented for each issue raised by the Applicants.

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