2019 (6) TMI 335 - AT - Customs

Valuation of imported goods - enhancement of the assessable value - retraction of statements - imposition of penalties - HELD THAT - The enhancement of the assessable value stands done by the Lower Authorities based upon the comparison of the original commercial invoices issued by the Chinese supplier and invoices produced by the appellant before customs. The appellant had not advanced any justifiable reasons to show issuance of two separate invoices and has not established that commercial invoice was not the correct value of the imported goods. The said fact further stands corroborated by the statement of Shri Dharmendra Kumar which have not been retracted - the enhancement of the value leading to confirmation of demand of duty of ₹ 1,85,212/- and of ₹ 6,524/- are appropriated. Penalty u/s 112(b)(ii) of Customs Act - HELD THAT - Penalty are to the extent of 100%, without giving any option to the appellant to pay reduced penalty of 25% within a period of 30 days of the passing of the order. As such while upholding the imposition of penalty to the extent of 100% in terms of said Section 112, we hold that if the appellant deposits the said penalty within the period of 30 days from the passing of the present order, the same shall stand reduced to 25%. Penalty u/s 114 A and 114AA of the Customs Act - HELD THAT - As the appellant have already been imposed penalty under Section 112 of the Customs Act, separate imposition of penalty to the extent of almost 5 times of the differential value of the goods is not justified - the penalties imposed under Section 114 and 114AA of the Act are set aside. Appeal allowed in part.

Summary

Issues:
Proceedings initiated against importer for undervaluation of imported goods, confirmation of differential duty, imposition of penalties under various sections of the Customs Act, confiscation of goods, and personal penalty for evasion of duty.

Analysis:
The case involved the appellant filing a bill of entry for clearance of imported toys from China. The Revenue discovered that the supplier had issued two invoices, with the actual commercial invoice showing a higher value than the one submitted to Customs. The appellant admitted to undervaluing the goods to pay less duty. Proceedings were initiated, and a show cause notice was issued proposing an increase in the declared value of the consignment. Differential duty was confirmed, along with interest and penalties under Sections 112(b)(ii), 114(a), and 114AA of the Customs Act. Confiscation of goods was also ordered, with redemption fines imposed. Personal penalties were levied for duty evasion.

The Adjudicating Authority's decision was upheld by the Commissioner (Appeals), leading to the present appeal. The Appellate Tribunal found that the enhancement of the assessable value was justified based on the comparison of invoices. The appellant failed to provide valid reasons for the dual invoices and did not prove the commercial invoice was incorrect. The statement of the proprietor, admitting to undervaluation, was considered valid evidence. Consequently, the demand for duty and penalties were upheld.

Regarding the penalties imposed, the Tribunal noted that while upholding the penalty under Section 112(b)(ii), a provision allowing for a reduced penalty of 25% within 30 days was highlighted. The Tribunal directed a reduction to 25% if the penalty was paid within the specified period. However, the separate penalties imposed under Sections 114 and 114AA were deemed unjustified due to the existing penalty under Section 112. Therefore, the penalties under Sections 114 and 114AA were set aside.

In conclusion, the appeal was disposed of with the confirmation of duty demands and penalties under Section 112(b)(ii), along with the reduction provision. The penalties under Sections 114 and 114AA were overturned due to the existing penalty under Section 112.