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2019 (6) TMI 868 - AT - CustomsValuation of imported goods - non declaration mis- declaration of goods - Tungsten Carbide Tips, Tungsten Carbide Rod and Drill Bits - rejection of declared transaction value - Rule 7 of the Customs Valuation Rules - HELD THAT - There has been mis-declared items in addition to declared goods imported by the appellant. These goods were Tungsten Carbide Tips, Tungsten Carbide Rod and Drill Bits the reason for which has been given by the appellant that these were by mistake committed on the part of the shipper and for which they are not liable to be punished. In fact, a letter has been also submitted by the appellant stating that this was mistake on the part of the shipper and not by the appellant. However, the appellant has accepted the value and paid the duty granted on the behest of shipper regarding the other item for which the Customs valuation was arrived under Rule 7 of the Customs Valuation Rules by conducting the market survey. It is on record that the market survey was conducted on 1.9.2016 in presence of importer as well as the CHA. It is also evident from the record of the case that the lower adjudicating authority has not recorded the reason as to why he has resorted to the valuation under Rule 7 without the exhausting provisions of Section 14 of the Customs Act and also without exhausting the application of Rule 3, 4 and 5 of Custom Valuation Rule. Therefore, the order passed by the lower adjudicating authority is in contrary to the Customs Valuation Rules, which was also not corrected in the impugned order by the Commissioner (Appeals). It is evident from the Corrigendum that the demand has been confirmed by Commissioner of Customs (Export, ICD) under Rule 5 of the Customs Valuation Rules read with Section 14 of the Customs Act. We find that if this Corrigendum has been issued by the Commissioner of Customs then the Commissioner (Appeals) is not competent officer to hear the appeal. Further, Rule 5 of the Valuation Rules, which deals with the transaction value on the basis of similar goods, has not been properly spelt out in the said Corrigendum. The adjudicating authority has not produced the value of the similar goods to the imported consignment which is subject matter of this proceeding. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Estoppel in law to challenge the impugned order. 2. Mis-declaration of goods. 3. Rejection of transaction value and valuation based on market survey. 4. Confiscation of imported goods under Section 111 of Customs Act. 5. Undeclared goods due to shipper's mistake. 6. Imposition of redemption fine and penalty. Detailed Analysis: 1. Estoppel in Law to Challenge the Impugned Order: The appellant contended that there is no estoppel in law to challenge the impugned order even after paying the duty, penalty, and redemption fine. This argument was accepted, allowing the appellant to contest the order despite prior compliance. 2. Mis-declaration of Goods: The appellant argued that the mis-declaration of skates as power balancing wheels was due to a minor difference in nomenclature and should not be considered a mis-declaration. The adjudicating authority had concluded that the declared prices were aligned with NIDB data, but this was not discussed in the impugned order. The Tribunal noted that the mis-declaration was not deliberate and accepted the appellant's explanation. 3. Rejection of Transaction Value and Valuation Based on Market Survey: The original adjudicating authority rejected the entire transaction value and opted for valuation based on a market survey under Rule 9, which the appellant argued was illegal. The Tribunal found that the market survey report was conducted in the presence of the importer and CHA but was not signed by any traders. The Tribunal cited the case of *Scorpian International Vs. CCE & ST, Indore* to emphasize the need for providing the market survey report to the appellant. The Tribunal held that the lower authority did not follow the proper sequence of Valuation Rules and did not exhaust the provisions of Section 14 of the Customs Act. 4. Confiscation of Imported Goods under Section 111 of Customs Act: The appellant argued that the confiscation under Section 111 was unjustified as the declared value was comparable with NIDB data, indicating no deliberate mis-declaration. The Tribunal agreed, citing precedents like *Bansal Industries Vs. CC, Chennai* and *Pushpak Metal Corpn. Vs. CC, Kandla*. 5. Undeclared Goods Due to Shipper's Mistake: The appellant claimed that the undeclared goods were mistakenly shipped by the supplier, who acknowledged the error and issued a supplementary invoice. The Tribunal accepted this explanation, noting the appellant's compliance in paying the duty and fines based on the shipper's mistake. 6. Imposition of Redemption Fine and Penalty: The appellant contested the imposition of redemption fine and penalty, arguing that there was no deliberate mis-declaration or undervaluation. The Tribunal found that the lower authorities failed to properly appreciate the appellant's submissions and did not provide adequate reasons for the valuation under Rule 7. The Tribunal set aside the impugned order, allowing the appeal and entitling the appellant to consequential benefits as per law. Conclusion: The Tribunal set aside the impugned order, allowing the appeal and entitling the appellant to consequential benefits. The Tribunal found that the lower authorities did not follow proper procedures in valuation and confiscation, and accepted the appellant's explanations regarding mis-declaration and undeclared goods. The market survey report was deemed unreliable, and the imposition of fines and penalties was found to be unjustified.
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