2020 (8) TMI 401 - AT - Customs

Valuation of imported goods - Silicone Weather Proofing Sealant - Fast Track Acqua tech very high bond foamed acrylic tape - rejection of declared value - revaluation of goods - confiscation with option to redeem on payment of fine - demand of differential duty alongwith penalty under Section 114A of the Act and further penalty under Section 114AA of CA - HELD THAT - The impugned order has been passed in accordance with law. Further, the appellant have failed to bring any cogent evidence on record, even before the Tribunal, inspite of being regular importer importing under their own brand name. Thus, apparently the appellant has not come with clean hands before this Tribunal. Impugned order upheld - appeal dismissed in toto.

Summary

Issues Involved:
1. Rejection of Declared Value
2. Revaluation of Imported Goods
3. Confiscation and Redemption Fine
4. Demand of Differential Duty
5. Imposition of Penalty under Section 114A and 114AA of the Customs Act, 1962

Issue-wise Detailed Analysis:

1. Rejection of Declared Value:
The primary issue in this appeal was whether the rejection of the declared value of the imported goods, specifically 'Silicone Weather Proofing Sealant' and 'Fast Track Acqua-tech very high bond foamed acrylic tape' from China, was justified. The customs authorities suspected undervaluation based on intelligence and a detailed examination of the goods. The goods were found to be of the declared quantity, but the length of the tape was longer than declared. Additionally, no MRP/RSP stickers were found on the cartons/items, leading to the suspicion of mis-declaration of value. The customs authorities used NIDB data and internet prices to determine that the declared value was significantly lower than the market value, leading to the rejection of the declared value under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

2. Revaluation of Imported Goods:
The assessable value was re-determined based on the lowest value of similar goods retrieved from NIDB data, which was ?24.10 per piece. The customs authorities also considered internet prices, where the minimum price for bulk quantities from China was US$0.52 per piece, and the retail price in India was ?80 per piece. The re-determined value was found to be reasonable and in consonance with the general principles of valuation.

3. Confiscation and Redemption Fine:
The imported goods were confiscated under Section 111(m) of the Customs Act, 1962, due to mis-declaration. However, an option was given to the importer to redeem the seized goods on payment of a redemption fine of ?50,000 under Section 125 of the Customs Act, 1962. The adjudicating authority found that the goods were liable for confiscation due to the undervaluation and mis-declaration of the length of the tapes.

4. Demand of Differential Duty:
The differential duty of ?2,37,245 was confirmed under Section 28 of the Customs Act, 1962, along with interest under Section 28AA. The amount was appropriated from the differential duty already deposited by the importer at the time of provisional release of the goods. The customs authorities determined that the declared value was significantly lower than the market value, leading to the demand for differential duty.

5. Imposition of Penalty under Section 114A and 114AA of the Customs Act, 1962:
Penalties were imposed on the appellant under Section 114A and Section 114AA of the Customs Act, 1962. A penalty of ?2,37,245 was imposed under Section 114A for wilful mis-declaration and undervaluation, and an additional penalty of ?50,000 was imposed under Section 114AA for the same reasons. The adjudicating authority found that the appellant had wilfully mis-declared the value and length of the imported goods, justifying the imposition of penalties.

Conclusion:
The Tribunal upheld the impugned order, agreeing with the findings of the Commissioner (Appeals). The appellant failed to provide any cogent evidence to support their declared value, even before the Tribunal. The Tribunal found that the order was passed in accordance with the law, and the appellant had not come with clean hands. The appeal was dismissed in toto.