2018 (11) TMI 681 - AT - Customs

Mis-declaration of imported goods - whether the respondents-importer have mis-declared the description and value of the imported goods attracting confiscation etc.? - Held that - So far as declaration in respect of the description of the imported goods is concerned which was made by the importer in the bill of entry, It is found that it was correctly declared by the appellant. It is only the view of the Department that description of the goods, as declared by the importer is not correct, rather the goods actually imported are known as per condition, Reflective Sheet adhesive same type/Acrylic Reflective Sheet . Further, it was observed that the adjudicating authority has simply endorsed his view that the imported goods are Reflective Sheet adhesive type/Acrylic Reflective sheet without having any documentary evidences, which is not maintainable. Also, there is no finding recorded by the original authority, as to how the similar goods are commercially interchangeable when the goods bear different trademarks - Further, it is observed that the charge of undervaluation should be proved by the Department on the basis of strong documentary evidence which is absent in the instant case. Rejection of value of goods earlier re-imported and cleared - Held that - The goods earlier imported by the appellant cannot be taken for the determination of the value, in view of the findings recorded with respect to the current import under dispute. Accordingly, it was held that the demand of differential duty of ₹ 12,00,875/- is not sustainable. Appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Mis-declaration of description of imported goods.
2. Comparison of imported goods with similar goods imported by another entity.
3. Rejection and re-determination of the value of imported goods.
4. Confiscation of goods and imposition of redemption fine.
5. Recovery of short-paid customs duty.
6. Imposition of interest on short-paid duty.
7. Penal action under Section 112 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Mis-declaration of Description of Imported Goods:
The primary issue was whether the respondents-importer mis-declared the description of the imported goods. The appellants declared the goods as "Acrylic Sheeting Advertisement Grade TM 3200." However, upon examination, the department found the goods to be "Reflective Sheet Adhesive Type/Acrylic Reflective Sheet." The Commissioner (Appeals) noted that the declaration made by the importer was correct as per their bill of entry, and the department’s view was not substantiated by documentary evidence. The CRCL test report did not confirm the reflective properties, and thus, the finding of mis-declaration by the adjudicating authority was deemed incorrect.

2. Comparison of Imported Goods with Similar Goods Imported by Another Entity:
The comparison was made between the goods imported by the respondent and those imported by M/s Auto Universe. The Commissioner (Appeals) observed that the goods imported by the respondent (Grade TM3200) and M/s Auto Universe (Grade TM3200 AB) were not similar as per Rule 2 (f) of CVR, 2007. The suffix "AB" indicated additional features, making the comparison erroneous. The adjudicating authority’s reliance on the size and quantity of the goods was insufficient to establish similarity, and the comparison was found to be patently erroneous.

3. Rejection and Re-determination of the Value of Imported Goods:
The department rejected the declared value of ?5,82,992/- and re-determined it at ?17,68,652/-. The Commissioner (Appeals) found that the revaluation was not supported by strong documentary evidence. The comparison with subsequent imports was against the statutory meaning of similar goods, and the contemporaneous nature was not established. The revaluation was set aside, and the declared value in the bill of entry was upheld.

4. Confiscation of Goods and Imposition of Redemption Fine:
The goods were seized and proposed for confiscation under Section 111 (d, f & m) of the Customs Act, 1962. The Commissioner (Appeals) found no evidence supporting the mis-declaration or undervaluation, leading to the setting aside of the confiscation and imposition of redemption fine.

5. Recovery of Short-paid Customs Duty:
The department alleged that the appellant had short-paid customs duty amounting to ?12,00,875/-. The Commissioner (Appeals) held that the demand for differential duty was not sustainable due to the lack of evidence supporting undervaluation. Consequently, the demand for duty on past consignments was also set aside.

6. Imposition of Interest on Short-paid Duty:
Interest on the short-paid duty was proposed under Section 28 AA of the Customs Act, 1962. Since the demand for differential duty was not sustainable, the imposition of interest was also set aside.

7. Penal Action under Section 112 of the Customs Act, 1962:
Penal action was proposed under Section 112 for the alleged mis-declaration and undervaluation. The Commissioner (Appeals) found no evidence of intentional mis-declaration or undervaluation, leading to the setting aside of the penal action.

Conclusion:
The appeal by the revenue was dismissed, and the respondent-importer was entitled to consequential benefits as per the law. The findings of mis-declaration, undervaluation, and confiscation were not substantiated by concrete evidence, leading to the setting aside of the revaluation, confiscation, and penal actions.