2021 (6) TMI 878 - AT - Customs

Valuation of imported goods - imported motorcycle parts - redetermination of value based on market survey - levy of fine and penalty - Rule 9 of the Customs Valuation (Determination of value of imported goods) Rules, 2007 - HELD THAT - In more or similar fats and circumstances when the re-determined value has been accepted by the importers, this Tribunal in COMMISSIONER OF CUSTOMS DELHI VERSUS M/S HANUMAN PRASAD SONS 2020 (12) TMI 1092 - CESTAT NEW DELHI after analyzing the principles of law on the subject held that importer cannot go back on such acceptance and be allowed to dispute the re-determined value, when the same was categorically accepted by him. Applying the principle of the said case to the facts of the present case, there are no iota of hesitation to arrive at the conclusion that in the present case also, the proprietor of the appellant categorically accepted the re-determined assessable value on the basis of market survey carried out in his presence vide statement dated 20.01.2010, which has never been retracted, therefore, the same is binding on him. Penalty - HELD THAT - There are no merit in the order of the authorities below in mechanically imposing fine and penalty on the appellant. In the order of the adjudicating authority, no justification has been recorded for imposition of penalty and directing confiscation of the goods - there are no circumstances brought on record to show that the value declared by the appellant is intentionally manipulated or suppressed; the Department has re-determined the value on the basis of market survey after rejecting the transaction value declared by the appellant. The re-determined value being in excess of the declared value ipso facto cannot be construed as ground warranting confiscation and imposition of penalty on the appellant in absence of reasons and evidences justifying the said action which are missing in the orders of the authorities below - Appeal allowed in part.

Summary

Issues:
1. Determination of correct assessable value of imported goods based on market survey.
2. Imposition of fine and penalty on the appellant.

Analysis:
Issue 1: Determination of correct assessable value
The case involved the import of motorcycle parts with a declared value of ?7,14,659, which was rejected by the Department. The Department conducted a market survey to re-determine the value, arriving at ?31,20,612. The appellant contested this re-determined value, arguing that the rejection was unjustified as there was no legal requirement for a purchase order or email correspondence. The appellant also claimed that the goods were unbranded and not associated with any reputed automobile company. The Revenue, on the other hand, asserted that the appellant failed to provide necessary documents to support the declared value, leading to doubts about its accuracy. The Revenue contended that the appellant had accepted the re-determined value during the survey and subsequent statements, making it binding. The Tribunal referred to precedents and held that once an importer accepts a re-determined value, they cannot dispute it later. Therefore, the Tribunal upheld the re-determined value based on the market survey.

Issue 2: Imposition of fine and penalty
While affirming the re-determined value, the Tribunal found fault with the imposition of fine and penalty by the authorities. It noted that there was no justification provided for the penalties imposed and no evidence of intentional manipulation or suppression of value by the appellant. The Tribunal emphasized that the re-determined value exceeding the declared value did not automatically justify confiscation and penalties. As a result, the Tribunal modified the order, setting aside the fine and penalty while partially allowing the appeal.

In conclusion, the Tribunal upheld the re-determined assessable value based on the market survey but found the imposition of fine and penalty unjustified due to lack of reasoning and evidence. The appeal was partly allowed by setting aside the fine and penalty.