2021 (11) TMI 623 - AT - Customs

Valuation of imported goods - undervaluation - Ball Valves made of metal like Zinc and Brass - rejection of declared value - enhancement of asessable value - Revenue has not adduced any evidence that the appellant had made any extra payment over and above the invoice value - Confiscation - redemption fine - penalty - HELD THAT - The appellant imported certain consignments of Ball Valves and Bibcock through Kolkata Port under three bills of entry dated 14.05.2009, 29.06.2009 and 28.07.2009. The said bills of entry were assessed by the proper Officer of Customs by value edition over the declared value in consonance with a departmental instruction. The goods so imported were cleared for home consumption. The present proceeding was initiated against the appellant on the allegation that the goods imported by him had been undervalued. It is on record that the bills of entry were assessed by the Proper Officer and the assessable value was determined by him and it was not challenged either by the appellant or by the department. In the course of enquiry, a proforma invoice was recovered showing a different price from that as shown in the invoice submitted at the time of import. However, it is observed that the proforma invoice is not issued in the name of the appellant - The Revenue has not produced any document to prove that there was any extra payment made by the appellant towards purchase of the said goods. The confiscation of the goods and imposition of penalty are consequential to the alleged under-valuation of the imported goods by the appellant. Since there are no sufficient grounds as required for enhancement of assessable value, imposition of redemption fine in lieu of confiscation under section 125 of the Customs Act, 1962 and imposition of penalty under section 114A on M/s.Trading Syndicate and under section 114AA on Shri Mohinder Goel, proprietor of M/s.Trading Syndicate is not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Undervaluation of imported goods
2. Confiscation under Section 111(m) of the Customs Act, 1962
3. Assessment of Bill of Entry
4. Methodology for determination of value
5. Appeal against assessment order
6. Sequential application of Customs Valuation Rules
7. Allegation of under-valuation against importer
8. Confiscation of goods and imposition of penalties

Detailed Analysis:
1. The case involved the appellant engaged in imports and exports, specifically importing "Ball Valves" made of metal like Zinc and Brass. A Show Cause Notice was issued alleging undervaluation of the imported goods, leading to the rejection of the declared assessable value and the acceptance of the re-determined assessable value. The goods were held liable for confiscation under Section 111(m) of the Customs Act, 1962, with penalties imposed on both the trading syndicate and the proprietor. The appeal was made to the Tribunal after the Commissioner(Appeals) upheld the Order-in-Original.

2. The appellant's advocate argued against the reliance on co-appellants' statements, stating that the methodology for arriving at the enhanced value based on presumed material composition percentages was legally unsustainable. It was contended that the assessment of a Bill of Entry is final unless appealed, and the value enhancement based on a proforma invoice was not valid without evidence of extra payment. The advocate emphasized the sequential application of Customs Valuation Rules and cited a Tribunal decision to support the appeal.

3. The Department's representative highlighted discrepancies observed during the investigation, alleging evasion by the importer. The Tribunal heard both sides and examined the appeal records, noting the importation of Ball Valves and Bibcock through Kolkata Port and the subsequent search and seizure by the DRI, Mumbai. The differential Customs Duty was demanded based on a proforma invoice, leading to proposed confiscation and penalties under various sections of the Customs Act, 1962.

4. The Tribunal found that the appellant's goods were cleared for home consumption after being assessed by the Proper Officer, with the proforma invoice showing a different price not issued in the appellant's name. The lack of evidence of extra payment and the absence of challenge to the assessable value led to the Tribunal's decision in favor of the appellant. The judgment referenced a Supreme Court case to support the appellant's position.

5. Ultimately, the Tribunal concluded that there were insufficient grounds for enhancing the assessable value, leading to the allowance of the appeal and the rejection of the confiscation of goods and imposition of penalties. The decision was pronounced in open court on 16 November 2021.