2019 (1) TMI 1123 - AT - Customs

Valuation of imported goods - goods have been mis-sent by the overseas shipper or there was mis-declaration of goods? - rejection of declared value - Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - confiscation - redemption fine - penalty - Held that - The goods actually imported are not the same as those declared in the Bill of Entry, but are entirely different set of goods. This clearly shows that the appellants have misdeclared the goods on the Bill of Entry and have sought clearance of undeclared and misdeclared goods in this manner. Appellants do not dispute that the goods found on examination were not the same goods as declared by them on the Bill of Entry. However appellants have submitted that since the goods were mis-sent by the shipper they were not aware of the goods that were shipped and hence they should not be held responsible for the misdeclaration - From the statement of Shri Sunil Jain, Director of Appellant, it can be reasonably concluded that the goods in the consignment under importation are not the goods as declared by the appellants. By mis-declaring the goods, appellants have sought to clear certain goods which were old and used. The clearance of such old and used goods for home consumption in India is not permitted under Export Import policy 2015-20 (Para 2.31 read with Notification No 35 (RE-2012)/2009-14 dated 28.02.2013), without proper authorization from Director General Foreign Trade - the charge of mis declaration of the consignment in terms of description, quantity and value is well founded. There is no merit in the submission of the appellants that the goods were wrongly shipped by the shipper. In fact, these goods were sought to be imported into India contrary to the EXIM Policy restriction and also by grossly undervaluing the same. There is no merit in the submission of the appellants with regards to bonafides, which in any case is not established in this case. Penalty u/s 112 of FA on Appellant Company and its Director - Held that - Since the Appellant Company and its Director have by their acts of omission and commission have rendered the goods liable for confiscation penalty imposed on them under Section 112 is justified - taking into account the re-determined value of the consignment and the fact that some of the goods sought to be imported were old and used thus restricted under the EXIM Policy the quantum of penalty to is quite reasonable. Appeal dismissed - decided against appellant.

Issues Involved:
1. Misdeclaration of goods in terms of description, quantity, and value.
2. Request for re-export of goods.
3. Confiscation of goods under Section 111 of the Customs Act, 1962.
4. Imposition of penalties under Section 112 of the Customs Act, 1962.
5. Valuation of goods under Customs Valuation Rules, 2007.
6. Role of the Appellant Company and its Director in the misdeclaration.

Issue-wise Analysis:

1. Misdeclaration of Goods:
The Tribunal observed that the goods declared in the Bill of Entry (B/E) were not the same as those found during the examination. The description, quantity, and value of the goods were grossly misdeclared. The goods found during the examination included different models and brands of memory modules and processors, some of which were old and used, contrary to the declaration. The appellants argued that the goods were mis-sent by the shipper, but this explanation was not accepted due to inconsistencies, such as the Master Airway Bill (MAWB) predating the purchase order and invoice.

2. Request for Re-export:
The appellants requested permission to re-export the goods, claiming they were wrongly shipped by the supplier. However, this request was made only after the goods were detained. The Tribunal noted that the appellants' explanation lacked credibility, particularly because the MAWB was issued before the purchase order and invoice, suggesting that the goods were not mis-sent as claimed.

3. Confiscation of Goods:
The goods were confiscated under Section 111(d), 111(i), 111(l), and 111(m) of the Customs Act, 1962, due to the misdeclaration. The Tribunal upheld the confiscation, noting that the misdeclaration was evident and that some of the goods were old and used, which are restricted for import without proper authorization.

4. Imposition of Penalties:
Penalties of ?7,50,000 each were imposed on the appellant company and its Director under Section 112 of the Customs Act, 1962. The Tribunal found that the penalties were justified due to the deliberate misdeclaration and the attempt to mislead the investigation with fabricated documents.

5. Valuation of Goods:
The declared value of the goods was ?11,89,997, but the correct value, as determined based on contemporaneous import data, was ?1,07,42,643. The Tribunal upheld the re-determined value, noting that the valuation method adopted by the revenue was proper and justified.

6. Role of the Appellant Company and its Director:
The Tribunal found that the appellant company and its Director were responsible for the misdeclaration and the attempt to mislead the investigation. The Director's statement and the fabricated documents submitted by the appellants were indicative of their involvement in the misdeclaration. The Tribunal concluded that the penalties imposed were reasonable and justified.

Conclusion:
The Tribunal dismissed the appeals filed by the appellant company and its Director, upholding the order of the Commissioner of Customs. The confiscation of goods and the imposition of penalties were found to be appropriate given the deliberate misdeclaration and the attempt to mislead the investigation. The valuation of the goods was also upheld, confirming the re-determined value as correct.

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