2022 (10) TMI 1016 - AT - Customs

Maintainability of appeal - Review of the impugned order by the Committee of Commissioners - Time limitation u/s under section 129A (2) of CGST Act - rejection of the declared transaction value under Rule 12 - re-determination of value - demand of differential duty with interest and the fine and penalty on the respondent - HELD THAT - The preliminary objection by the learned counsel for the respondent that the Review Order passed by the Committee of Commissioners is not correct because no time limit is prescribed under section 129A (2) and a time limit cannot be read into it. Rejection of the declared value by the original authority - Section 14 of Customs Act - HELD THAT - Section 14 requires the valuation to be done as per the transaction value subject to some conditions. Clause (iii) of the second proviso to this Section provides for rejection of transaction value by the proper officer under certain circumstances. If the transaction value is rejected, then the value shall be re-determined as per the Valuation Rules. Rule 12 of the Valuation Rules deals with the rejection of transaction value - the importer's assertion that the existence of such lower end versions were communicated to it by WECHAT could not be substantiated because no such WECHAT message was produced. No such lower end versions were found during the market survey nor were any such low end versions put up on the website of the company maintained by the importer itself. The Commissioner (Appeals) has erred in relying on an email obtained by the importer after the case was booked when all other evidence is to the contrary. Therefore, the Commissioner (Appeals) was not correct in setting aside the rejection of the transaction value and its re-determination under Rules 4 5 by the original authority. In this case, the goods which were indicated in the Bill of Entry were 'unpopular brands' while what were imported were Zhiyun brand goods. The prices which were declared in the Bill of Entry were a fraction of the price of the Zhiyun brand goods imported by the same importer from the same overseas supplier and they were of the same models - the imported goods were correctly confiscated under section 111 and consequently, penalty was correctly imposed under Section 112 by the original authority. Since the importer had made false declarations in the Bill of Entry, penalty was also correctly imposed under section 114AA by the original authority. The Commissioner (Appeals) has erred in setting aside the confiscation of the goods and imposition of penalties by the original authority. Appeal allowed - decided in favor of Revenue.

Summary

Issues Involved:
1. Timeliness of the review of the impugned order by the Committee of Commissioners.
2. Legitimacy of the Commissioner (Appeals) setting aside the rejection of the declared transaction value under Rule 12 and re-determination of value under Rules 4 & 5.
3. Validity of setting aside the demand of differential duty with interest, and the fine and penalty on the respondent.

Detailed Analysis:

1. Timeliness of the Review:
The respondent argued that the review of the impugned order by the Committee of Commissioners under Section 129A(2) was time-barred, making the appeal not maintainable. The Revenue countered that Section 129A(2) does not prescribe a time limit for review, unlike Section 129D. The Tribunal noted that Section 129A(2) indeed lacks a time limit for review, and the appeal filed was within the period covered by the Supreme Court's suo moto orders due to the COVID pandemic. Thus, the appeal was treated as timely, and the preliminary objection was dismissed.

2. Legitimacy of Setting Aside the Rejection of Declared Transaction Value:
The original authority rejected the transaction value under Rule 12 of the Customs Valuation Rules, 2007, and re-determined the assessable value under Rules 4 & 5. The Commissioner (Appeals) set aside this rejection, relying on a technical letter obtained by the importer post-seizure. The Tribunal found that the goods were declared as 'unpopular brand' but were actually of the 'Zhiyun' brand, previously imported at higher prices by the respondent. The Tribunal held that the original authority had reasonable grounds to doubt the transaction value, given the significant price difference and the lack of evidence supporting the claim of 'lower versions'. The Tribunal concluded that the Commissioner (Appeals) erred in setting aside the rejection of the transaction value and its re-determination.

3. Validity of Setting Aside the Demand of Differential Duty, Fine, and Penalty:
The original authority confiscated the goods under Sections 111(l) and 111(m) of the Customs Act, imposed a fine, and levied penalties under Sections 112(a) and 114AA. The Commissioner (Appeals) set aside these actions. The Tribunal found that the goods were mis-declared in terms of brand and value, justifying the confiscation and penalties. The Tribunal upheld the original authority's actions, stating that the Commissioner (Appeals) erred in setting aside the confiscation and penalties.

Conclusion:
The Tribunal allowed the Revenue's appeal, set aside the order of the Commissioner (Appeals), and restored the original order, including the rejection of the transaction value, re-determination of the assessable value, demand of differential duty, and imposition of fines and penalties.