2020 (1) TMI 436 - AT - Customs

Valuation of imported goods - polyester viscose knitted fabric - rejection of declared value - appeal contends that the adjudicating authority lacked jurisdiction to initiate proceedings as the assessing officers were under the supervision of Commissioner of Customs (Import), Nhava Sheva - HELD THAT - In ordering the redetermination of value, the adjudicating authority has also included the goods, viz. polyester viscose knitted fabric , that were in conformity with the declaration in the bill of entry, even though of lesser quantity, which eliminates scope of action under Rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 as these were not misdeclared. It is also seen that the adjudicating authority, while ordering redemption, also imposed the condition that the goods must be cleared for home consumption - In the light of the claim of the appellant, even if an afterthought on which we desist from rendering a finding at this stage, insistence on clearance for home consumption does not appear to be appropriate. Once the goods are offered for redemption, these cease to be vested with the Central Government and the imposition of conditions, which precludes re-export, is not sanctioned by law. Matter remanded back to the adjudicating authority to decide the show cause notice afresh in accordance with the provisions of law - appeal allowed by way of remand.

Summary

Issues:
- Rejection of declared value of imported goods
- Confiscation of goods with offer of redemption
- Imposition of penalty under Section 112 of Customs Act, 1962
- Jurisdiction of adjudicating authority
- Conditions imposed on clearance for home consumption

Analysis:

The appeal in this case was made by M/s. Sundesha Textile Exim Co. against the Order-in-Original issued by the Commissioner of Customs (Export), Nhava Sheva, dated 12th October, 2010. The main issue in dispute was the rejection of the declared value of goods imported via Bill of Entry No. 722074/19-12-2008 and the subsequent confiscation of the goods. The adjudicating authority also imposed a fine of ?20,00,000 for redemption of the goods and a penalty of ?10,00,000 under Section 112 of the Customs Act, 1962.

During the hearing, only the Learned Authorised Representative appeared, as the appellant did not. The value of the imported goods, invoiced at US $23,370 (?11,74,342.50) and declared as 'polyester viscose knitted fabric' from China, was reassessed to ?13,04,694.52 with a duty liability of ?1,95,286.20. The composition of the goods was found to be different from the declaration, leading to the reassessment, confiscation, and penalty under the Customs Act, 1962.

The appellant contended that the adjudicating authority lacked jurisdiction to initiate proceedings, arguing that the assessing officers were under the supervision of the Commissioner of Customs (Import), Nhava Sheva. However, the Learned Authorised Representative argued that the jurisdiction of the Commissioner of Customs (Export), Nhava Sheva was valid, supported by Notification No. 15/2002-Cus. (N.T.), dated 7th March, 2002, which accords jurisdiction to the Commissioner of Customs (Export) and subordinate officers.

The Appellate Tribunal found that while the adjudicating authority had the jurisdiction to proceed, there were errors in the redetermination of value and the conditions imposed on clearance for home consumption. The Tribunal noted that goods that were in conformity with the declaration should not have been included for redetermination, and the insistence on clearance for home consumption after redemption was not appropriate as it precluded re-export, which is not sanctioned by law.

As a result, the impugned order was set aside, and the matter was remanded back to the adjudicating authority to decide the show cause notice afresh in accordance with the provisions of the law. The decision was pronounced in the open court on 20-8-2019.