2017 (11) TMI 949 - AT - Customs

Valuation - includibility - conversion cost - redemption fine - penalty - Held that - There is no cogent and credible reason and evidence brought out to show that there was no incurring of conversion cost of the vehicle to make that right hand drive from left hand drive. The vehicle was originated in USA and to came Thailand for export. Also the import was found to have been made in violation of import licensing conditions as well as undervalued - redemption fine and penalty upheld - appeal dismissed - decided against appellant.

Summary

Issues:
1. Duty liability enhancement due to non-inclusion of conversion cost in declared value.
2. Alleged violation of import licensing conditions and undervaluation.
3. Imposition of redemption fine and penalty.

Analysis:

Issue 1: Duty liability enhancement due to non-inclusion of conversion cost
The judgment noted that the conversion cost incurred in Thailand for changing a vehicle from left-hand drive to right-hand drive was not added to the declared value of the import. This omission resulted in the enhancement of duty liability by the Customs authorities. The appellant did not provide any credible evidence to dispute incurring the conversion cost, which led to the duty enhancement.

Issue 2: Alleged violation of import licensing conditions and undervaluation
The judgment highlighted that the import of the vehicle was found to have violated import licensing conditions and was undervalued. The vehicle, originally from the USA, was exported from Thailand. The appellant did not challenge the findings of the adjudicating authority regarding the violation of import conditions and undervaluation. The authority correctly imposed duty, redemption fine, and penalty based on the enhanced value of the vehicle.

Issue 3: Imposition of redemption fine and penalty
The judgment expressed surprise at the leniency of the redemption fine of &8377; 2 lakhs and penalty of &8377; 50,000 considering the assessable value of &8377; 21,96,598. The Tribunal emphasized the importance of imposing appropriate redemption fines and penalties in cases of misdeclarations to deter evasion. It deferred the determination of specific amounts to the Chief Commissioner of Customs, urging the issuance of guidelines for consistent enforcement.

In conclusion, the appeal was dismissed, affirming the duty enhancement and the imposition of redemption fine and penalty. The judgment underscored the need for stringent penalties in cases of misdeclarations to prevent evasion, leaving the determination of specific quantum to the Customs authorities.