2017 (7) TMI 929 - AT - Customs

Valuation - export of readymade garments - overvaluation - confiscation - redemption fine - penalty - Held that - even though, the appellant presently is contesting the value determined by Revenue without any market enquiry, we find that the value has been determined on the basis of the documents submitted by the Director of the respondent. The main thrust of the argument raised by the respondent was not on value but on the quantum of fine and penalty ordered after confiscation of the impugned export goods. Consequently, we find no reason to interfere with the value as determined by the adjudicating authority. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Reduction of redemption fine and penalty imposed under section 114 of the Customs Act 1962.

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI was filed by the Revenue against an order in appeal no.704/2015 dated 14.07.2015. The case involved the export of goods declared as readymade garments for Dubai, UAE, where Revenue suspected overvaluation. The Director of the exporting company admitted to overvaluation during interrogation and submitted relevant documents. The Additional Commissioner allowed withdrawal of the consignment with a redemption fine of ?16 lakhs and a penalty of ?4 lakhs. Upon challenging this order, the Commissioner (A) reduced the redemption fine to ?2.5 lakhs and penalty to ?75,000. The Revenue appealed against this reduction, seeking reinstatement of the original order.

During the proceedings, the Revenue argued that the consignment was heavily overvalued, as admitted by the Director, justifying the confiscation and redemption fine. On the other hand, the respondent's counsel contended that the valuation was arbitrary without a market survey, urging to uphold the impugned order.

After hearing both sides and examining the records, the Tribunal found that the valuation was based on documents submitted by the respondent's Director, with the main dispute focusing on the quantum of fine and penalty post-confiscation. The Commissioner (A) reduced the fines citing lack of objective parameters in valuation, costs incurred by the appellant due to detention, and the appellant's first-time offense. Upholding the Commissioner's reasoning, the Tribunal found no grounds to interfere with the impugned order, leading to the rejection of Revenue's appeal.

In the final pronouncement, the Tribunal upheld the impugned order, maintaining the reduction in redemption fine and penalty, ultimately rejecting the Revenue's appeal.