2018 (8) TMI 1240 - AT - Customs

Misdeclaration of imported goods - import of used Toyota Landcruiser, Model 2005 - rejection of transaction value - enhancement of value - quantum of redemption fine and penalty - Held that - Department has made out a good case for rejection of the transaction value for the reasons that there was differences in the Bill of Lading and invoice whereas the invoice was issued by M/s. World Wide Motors, Dubai, UAI on 08/11/2009. The Bill of Lading dt. 29/12/2009 showed the shipper to be one Mrs. T. William, Dial House, West Midlands, UK and the port of loading to be Felixstone and port of discharge as Cochin - Department was in its right to recourse the Rule 9 of the Customs Valuation Rules, 2007. Having established the fact of wrong description, the burden has shifted to the importer in the absence of any documentary evidence to substantiate the correctness or otherwise of the invoice, valuation under Rule 9 is quite acceptable - It is seen that the Department has placed reliance on the list price as is available on the internet from Toyota UK since the car was imported from UK, it was obvious that the Department has taken the listed prices from the UK website. Due discount of depreciation was allowed to arrived at the value of the car at the time of import. Quantum of redemption fine and penalty reduced - appeal allowed in part.

Summary

Issues:
1. Rejection of declared assessable value and enhancement based on discrepancies.
2. Consideration of transaction value and imports at other ports.
3. Validity of value taken from the website of Toyota UK.
4. Imposition of redemption fine and penalty.
5. Application of Customs Valuation Rules and reliance on Rule 9.
6. Burden of proof on the importer in case of wrong description.
7. Reduction of redemption fine and penalty based on case laws.

Analysis:
1. The appellants imported a used Toyota Landcruiser but discrepancies were found between the vehicle description in the invoice and the actual model examined by Customs. The Department rejected the declared value and increased it based on the list price from the Toyota UK website. This led to the imposition of a redemption fine and a penalty by the Additional Commissioner, which was upheld by the Commissioner (Appeals), prompting the appeal.

2. The appellant argued that the transaction value rejection did not consider the value from imports at other ports. They contended that the value from the website was unacceptable and not in line with guidelines. The Department's reliance on internet documents was challenged, citing a Tribunal decision. However, the Department stressed the lack of evidence regarding the supplier's valid title, referencing a High Court case.

3. The Tribunal found merit in the Department's rejection of the transaction value due to discrepancies in documents. The valuation was sequentially done as per Customs Valuation Rules, with Rule 9 applied in the absence of applicability of Rules 4 to 8. The burden of proof shifted to the importer, who failed to substantiate the invoice's correctness. The Department used the UK website's list price for valuation, considering the import source.

4. Various case laws were cited by the importer, but the Tribunal found them unrelated to the issue at hand. However, based on a previous judgment, the redemption fine and penalty were reduced while upholding other parts of the order. The appeal was allowed in part, leading to the reduction of the financial penalties.

This detailed analysis of the judgment showcases the complexities involved in the valuation of imported goods, the burden of proof on importers, and the application of relevant legal principles in customs disputes.