2018 (7) TMI 709 - AT - Customs

Redemption fine - penalty - it was the case of appellant that Inasmuch as, the value adopted by the Revenue was on the lower side, the appellant was not interested in export of the goods - Held that - Apart from the report of the Valuation Committee, there is no other evidence to show over-valuation of the cargo. Even the status of the Valuation Committee does not stand disclosed i.e., as to who were the members of the said Committee, how they arrived at the value?; what was the basis of the findings? and what was the technical and expert qualification of the said members? - impugned orders are not sustainable - redemption fine and penalty set aside - appeal allowed.

Summary

Issues:
Challenge to redemption fine and penalty imposed under Sections 125 and 114 of the Customs Act, 1962.

Analysis:
The appellant exported Polyester Face Scarves at a declared price of USD 4.9 per piece. Samples were sent to the Valuation Committee, which valued the goods at &8377; 42 per piece. The appellant admitted the scarves were of export quality but agreed to lesser valuation if proven by the Revenue. Proceedings were initiated due to alleged over-valuation, leading to confiscation, redemption fine of &8377; 3,00,000, and penalty of &8377; 2,00,000. The Commissioner (Appeals) upheld the order but reduced the fine and penalty to &8377; 2,00,000 and &8377; 1,00,000 respectively.

The appellant argued that there was no concrete evidence to show over-valuation apart from the Valuation Committee's report. The expertise and composition of the Committee were not disclosed, raising doubts about their findings. The Revenue proceeded without sufficient evidence to challenge the declared value. The appellant requested setting aside the redemption fine and penalty. The Authorized Representative for the Revenue reiterated the lower authorities' findings.

The Tribunal found merit in the appellant's argument, noting the lack of evidence beyond the Valuation Committee's report to prove over-valuation. The undisclosed composition and methodology of the Committee cast doubt on its conclusions. Without substantial evidence, the impugned orders were deemed unsustainable. The Tribunal upheld other parts of the orders but set aside the redemption fine and penalty, allowing the appeal on this issue.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the redemption fine and penalty imposed under Sections 125 and 114 of the Customs Act, 1962, due to insufficient evidence of over-valuation beyond the Valuation Committee's report.