2017 (11) TMI 1292 - AT - Customs

Penalty u/s 112 (a) of the CA, 1962 - Rule 5 was invoked in remand proceedings with reference to similar goods - SCN invoked Rule 9 and proposed market enquiry as the sole basis for re-determination of assessable value - Held that - it is not open to the Original Authority to take recourse to an entirely different basis for re-determining the assessable value without due notice to the appellant - resorting to value of similar goods could be an admitted process of re-determining the assessable value only if the conditions of Rule 5 are fulfilled and the appellants were provided due opportunity to defend their case, which has not happened in the present case - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Correctness of the declared value of imported optical frames.
2. Re-determination of assessable value and confiscation of goods.
3. Imposition of penalties under Customs Act, 1962.
4. Acceptability of market enquiry and contemporaneous import value.

Analysis:

1. The case involved a dispute over the correctness of the declared value of imported optical frames bearing the brand name "VANNI." The officers doubted the declared value and initiated proceedings to enhance it, leading to confiscation of goods and imposition of penalties under the Customs Act, 1962.

2. The Original Authority initially rejected the declared value and re-determined it at a higher amount, ordering confiscation of goods with fines imposed. Despite appeals and remands, the assessable value was re-determined multiple times, with the final assessment being significantly lower than the initial determination.

3. The penalties imposed under Section 112(a) of the Customs Act, 1962, were also a subject of contention, with the Commissioner (Appeals) and the Tribunal scrutinizing the process of re-determination and the basis for imposing penalties in each instance.

4. The acceptability of market enquiry and contemporaneous import value comparison was a crucial aspect of the case. The Tribunal found fault with the process followed by the Revenue in re-determining the assessable value, highlighting discrepancies in the basis for assessment and the lack of opportunity provided to the appellant to defend their case adequately.

In conclusion, the Tribunal set aside the impugned order, ruling that the re-determination of assessable value lacked proper procedural adherence and substantive basis. The appeal was allowed, emphasizing the importance of following due process and providing fair opportunities for defense in customs valuation disputes.