2017 (12) TMI 403 - AT - Customs

Mis-declaration of imported goods - undervaluation - palm acid oil, palm fatty acid distillate and palm stearin - whether there was any misdeclaration of the description of imported goods? - Held that - there was a cross-examination of the Chemical Examiner as well as the Joint Director. The samples of the goods were also got tested by the Revenue from Sri Ram Institute for Industrial Research, New Delhi. We find that the ld. Commissioner has correctly analysed the findings in the test report who carried the examination - With regard to the reasoning given by the ld. Commissioner that experts of CRCL has not conclusively stated whether the samples of the goods were residue and why these were not Mixed Oil. In view of the above analysis, the charge of misdeclaration against the importers is not sustainable. Valuation - Held that - there is no direct evidence indicating that the price reflected on the invoice is not the correct transaction value, we do not find any justifiable reasons to uphold the charge of the Revenue. Appeal dismissed - decided against Revenue.

Summary

Issues:
Misdeclaration of imported goods
Undervaluation of imported goods

Misdeclaration of imported goods:
The case involved the import of palm acid oil, palm fatty acid distillate, and palm stearin by certain Indian importers, including the appellant, misdeclared as mixed acid oil or mixed fatty acid under chapter 38 of the Customs Tariff. The Revenue issued a show cause notice proposing enhancement of value, confiscation of goods, and penalties. The Commissioner dropped the proceedings as misdeclaration and undervaluation were not established. The Revenue appealed, arguing misdeclaration based on chemical testing reports. However, the Tribunal found that the charge of misdeclaration was not sustainable. The chemical test reports did not confirm the goods as acid oil per the IS 12029:1986 and were residues from fatty substance treatment, weakening the misdeclaration charge.

Undervaluation of imported goods:
The Revenue also alleged undervaluation based on evidence from a similar case. The Tribunal referenced a previous case where the transaction value was accepted as correct unless proven otherwise. The Tribunal found the evidence in the present case to be general and not specific to the appellant's import. Without evidence of invoicing on the lower side or investigations at the supplier's end, the charge of undervaluation was not upheld. The Tribunal cited legal precedents where transaction value must be accepted unless contrary evidence is presented. As no direct evidence showed incorrect transaction value, the charge of undervaluation was dismissed. Consequently, the appeals filed by the Revenue were found to lack merit and were dismissed.

Judgment:
The Tribunal dismissed the Revenue's appeals, concluding that the charges of misdeclaration and undervaluation were not substantiated based on the evidence presented. The misdeclaration charge was found unsustainable due to chemical testing reports indicating the goods were residues, not acid oil. Similarly, the undervaluation charge lacked specific evidence related to the appellant's import, leading to the dismissal of the appeals. The Tribunal upheld the principle of accepting transaction value unless proven otherwise, citing legal precedents. The appeals were therefore dismissed on 5th December 2017.