2021 (2) TMI 1142 - AT - Customs

Valuation of imported goods - difference between value as per proforma Invoice and actual value - 1, 3-DIHYDROXYNAPHTHALENE - It appeared to Revenue that the importer has misdeclared the value of the imported goods to evade customs duty - Confiscation - penalty u/s 112(a) of Customs Act as well as u/s 114AA of the Customs Act, 1962 - HELD THAT - It is the obligation of the authorised courier to file the Courier Bill of Entry based on the information contained on the package. Evidently, it is a case of clerical mistake by the shipper, who has wrongly declared the lower value instead of the correct value. It is further found that the appellant have at the very first instance on query raised by the Department, have come forward with the correct value based on the proforma invoice. Further, it is an admitted fact that the appellant have remitted the price of USD 21500 through authorised banking channel, and as such no case of any malafide is made out against the appellant. At best, it is the mistake of the authorised courier who was not vigilant at the time of booking of the courier parcel to ensure the correct declaration by the shipper. No case of any collusion is made out against the appellant shipper and /or against the courier - thus, penalty have been imposed mechanically without proper appreciation of the facts and the law applicable. The order of confiscation as well as the penalties imposed under section 112(a) and 114AA of the Act is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Customs valuation of imported goods
2. Allegations of misdeclaration and evasion of customs duty
3. Imposition of penalties under various sections of the Customs Act

Analysis:
1. Customs Valuation of Imported Goods:
The case involved the import of '10 kgs. of 1, 3-DIHYDROXYNAPHTHALENE' by a partnership firm. Initially, the goods were declared at a value of USD 900.00 (FOB), but upon examination, it was found to be undervalued. The appellant later submitted a proforma invoice valuing the goods at USD 21,500.00 (CIF). The Competent Authorities considered this revised value as the fair value of the imported goods. The assessable value was determined at ?14,85,650/- based on the proforma invoice, leading to a discrepancy in the declared duty amount. The appellant was alleged to have misdeclared the value to evade customs duty.

2. Allegations of Misdeclaration and Evasion of Customs Duty:
The Customs Department alleged that the importer intentionally used a false invoice to evade customs duty, leading to a potential confiscation of the goods under Section 111(m) of the Customs Act, 1962. Additionally, penalties were imposed under Sections 112(a) and 114AA of the Act. The appellant requested to clear the goods on nominal fine and penalty, indicating a willingness to resolve the issue without a personal hearing.

3. Imposition of Penalties under Various Sections of the Customs Act:
The Adjudicating Authority rejected the declared value and re-determined the assessable value of the goods. The appellant appealed against this decision, arguing that penalties were imposed without proper appreciation of the facts and applicable law. The appellant's counsel contended that there was no misdeclaration or malafide intent on the part of the importer, and the penalties were imposed mechanically. The appellant highlighted that the correct value was promptly disclosed based on the proforma invoice, and the shipper admitted their mistake.

In the final judgment, the Tribunal found that the clerical error in declaring the lower value was made by the shipper, not the appellant. The appellant promptly rectified the value discrepancy upon query by the Customs Department. The Tribunal observed that there was no evidence of collusion between the appellant, the shipper, or the courier. Consequently, the Tribunal allowed the appeal, setting aside the order of confiscation and the penalties imposed under Sections 112(a) and 114AA of the Customs Act, providing consequential relief to the appellant.