2019 (3) TMI 966 - AT - Customs

Valuation of imported goods - enhancement of value - Penalty - Held that - The exchange of E-mail, the content of which has not denied by appellant establishes that there was undervaluation in respect of Mobile Charging Connector and Memory Card Reader. We therefore, do not interfere with the finding of lower authorities in respect of the same - However, in respect of the other items revenue has enhanced the value on the basis of data available in respect of similar goods imported during the relevant period. There is no evidence established by revenue that said data was applicable to the imported goods and in respect of the goods such as Mobile Adopter, Mobile Zipper Cover Plastic and Mobile Batteries, revenue could not establish that the Price reflected in the invoice is not actual price paid by the appellant to the foreign supplier. The value declared by the importer in respect of Mobile Adopter, Mobile Zipper Cover Plastic and Mobile Battery is restored - appeal allowed in part.

Summary

Issues:
Undervaluation of imported goods, discrepancy in quantity, confiscation of goods, imposition of redemption fine and penalty, applicability of Section 14 of Customs Act, 1962.

Analysis:

1. Undervaluation of Imported Goods:
The case involved the import of various items where discrepancies were noted in the quantity declared in the invoice compared to the actual quantity found in the consignment. The exchange of E-mails between the appellant and the foreign supplier revealed undervaluation in the rate of certain items, leading to the initiation of proceedings by the revenue authorities. The Original Authority enhanced the value of specific imported goods based on the E-mail exchange and other available information. Subsequently, the matter was taken to the learned Commissioner (Appeals) who upheld the decision.

2. Confiscation, Redemption Fine, and Penalty:
The Original Authority confiscated the goods and imposed a redemption fine of &8377; 10,34,000 along with a penalty of &8377; 10,92,558 on the appellants. The learned Commissioner (Appeals) did not interfere with these penalties. However, upon further review, the Tribunal found that while undervaluation was established for certain items, there was insufficient evidence to support the revenue's claim for enhancing the value of other items based on data available for similar goods imported during the relevant period.

3. Applicability of Section 14 of Customs Act, 1962:
The Tribunal referred to the ruling of the Hon'ble Supreme Court in a specific case to emphasize that unless the value declared by the appellant is rejected by revenue, it cannot be enhanced as per Section 14 of the Customs Act, 1962. Relying on this legal principle, the Tribunal restored the value declared by the importer for certain items, namely Mobile Adopter, Mobile Zipper Cover Plastic, and Mobile Battery. Consequently, the confiscation of these items was set aside, and the redemption fine was reduced to &8377; 2.50 lakh, with the penalty under Section 14A reduced to &8377; 1 lakh.

4. Conclusion:
In conclusion, the Tribunal modified the impugned order, partially allowing the appeal by restoring the declared value for specific items and reducing the redemption fine and penalty imposed on the appellants. The judgment highlights the importance of adhering to legal provisions such as Section 14 of the Customs Act, 1962, in cases of valuation disputes related to imported goods.