2019 (8) TMI 1190 - AT - Customs

Valuation of imported goods - Misdeclaration of imported goods - serviceable CRGO strips misdeclared as heavy melting scrap - rejection of declared value - claim of the appellant is that the goods were imported solely for melting and that the serviceability of the imported goods, even if admitted, does not detract from the intended utilization - HELD THAT - No evidence is forthcoming in the appeal to counter the finding that the imported goods were serviceable. Serviceable CRGO strips would not be covered within the description of heavy melting scrap and the finding of mis-declaration is, therefore, beyond the scope of challenge. However, in determining the value of the goods consequent upon rejection of the declared value owing to the finding of misdeclaration, the proper officer has failed to offer justification, acceptable under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, for adoption of that proposed by the appraising officers. In the absence of exposition of the judgement, in adherence to which the revised value was arrived at, the enhancement upheld in the impugned order fails the test of law - the confiscation of imported goods, the enhancement of value and the imposition of penalty are without sanction of law - appeal allowed - decided in favor of appellant.

Summary

Issues: Mis-declaration of imported goods as 'heavy melting scrap', confiscation of goods, excessive redemption fine, penalty imposition, justification for enhanced valuation, compliance with Customs Valuation Rules.

The judgment by the Appellate Tribunal CESTAT MUMBAI involved an appeal by M/s Dadra Nagar Steel P Ltd against the order-in-appeal confirming the confiscation of goods imported under a mis-declared description. The cargo was confiscated under section 111(m) of the Customs Act, 1962, but allowed redemption on payment of a fine and imposition of a penalty. The appeal challenged the excessive redemption fine and penalty, arguing that the imported goods were intended for melting and serviceability did not affect their utilization. The denial of the request for mutilation and the enhanced valuation were contested as non-compliant with Customs Act rules.

The Tribunal noted that while the imported goods were found to be serviceable CRGO strips, they did not fall under the description of 'heavy melting scrap', supporting the mis-declaration finding. However, the Tribunal found fault with the lack of justification for the enhanced valuation, as per the Customs Valuation Rules. The absence of a clear explanation for the revised value rendered the enhancement in the impugned order legally questionable. This failure to provide a valid basis for the revised value undermined the confiscation under section 111(m) of the Customs Act, as the declared value ceased to be a 'material particular' justifying confiscation.

Consequently, the Tribunal held that the confiscation of imported goods, the enhanced valuation, and the penalty imposition lacked legal sanction. As a result, the impugned order was set aside, and the appeal was allowed, highlighting the importance of complying with the Customs Valuation Rules and providing proper justification for valuation decisions to uphold legal standards.