2018 (12) TMI 670 - AT - Customs

Valuation of imported goods - adhesive coated jumbo rolls - Held that - The appellant had declared the first of the consignments as plain plastic film and the other two consignments as adhesive coated jumbo rolls with unit price of US 425/kg and US 450/kg respectively. Even though the manufacturer-supplier did, in their communication, clarify the nature of the goods, the appellant has not been able, either before the first appellate authority or before us, to controvert the findings that rolls were consistent dimensions in the imported consignment. There is no doubt that, following a finding of superior quality, the declared value stands on very weak foundations. However, the findings of the original authority on the value adopted, to the extent not dealt with in the impugned orders but assumed to merge therewith, lack the rigour that is mandated by Customs Valuation (Determination of Value of Imported Goods) Rules, 2007; These flaws in the order of the first appellate authority deprives it of legality and propriety that must be rectified - the matter remanded back to the original authority for a fresh decision duly that is in consonance with section 14 and section 125 of Customs Act 1962 - appeal allowed by way of remand.

Issues:
1. Mis-description of imported goods leading to confiscation under section 111(m) of Customs Act, 1962.
2. Discrepancy in assessable value and imposition of penalty under section 112 of Customs Act, 1962.
3. Compliance with Customs Valuation Rules, 2007 in determining the value of imported goods.
4. Excessive fines and penalties imposed by the lower authorities.
5. Lack of detailed examination of bills of entry and absence of show cause notices.

Analysis:

1. The appeals were filed against orders-in-appeal related to imports against specific bill of entry numbers, where the goods were found to be mis-declared, leading to confiscation under section 111(m) of the Customs Act, 1962. The Commissioner of Customs upheld the decision, resulting in enhanced assessable value and imposition of penalties.

2. The importer contended that the goods were 'off cut/odd lot', while the authorities deemed them to be of prime quality, justifying the higher assessable value. The physical examination and admission of the importer's proprietor supported the misdeclaration findings. The penalties imposed were challenged based on non-compliance with valuation rules and disproportionate fines.

3. The primary argument focused on the direct import from the manufacturer, who certified the goods' nature. However, the authorities emphasized the physical characteristics of the imported rolls over the manufacturer's categorization. The Tribunal's past decisions on strict compliance with valuation rules were cited to support the appellant's case.

4. The appellate tribunal noted discrepancies in the valuation process, highlighting the weak foundation of the declared value due to the goods' superior quality. The lack of rigor in assessing the value as per Customs Valuation Rules, 2007, was a significant concern.

5. The lower authorities failed to provide detailed examination of bills of entry and omitted crucial information regarding the import source and description. The absence of show cause notices and the inability to challenge findings before the original authority raised procedural issues, leading to a remand of the case for a fresh decision in compliance with relevant sections of the Customs Act, 1962.

6. The appellate tribunal set aside the impugned orders, emphasizing the need for a lawful and proper decision-making process. The appellant was granted the opportunity to present additional evidence in the fresh proceedings to contest the goods' classification as 'prime'. The excessive fines and penalties imposed were deemed to lack proper justification, warranting a reevaluation by the original authority.

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