2022 (11) TMI 1238 - AT - Customs

Confiscation of goods - Classification of imported goods - glass stone - to be classifiable under CTH 71049090 or nor - rejection of declared value - change in classification based on the NIDB for the goods - Classification - redemption fine - penalty - HELD THAT - There are no hesitation in holding that both the authorities have concluded that the appellant have grossly mis-declared the consignment imported by them from the China both in respect of value and description. It is not the case of misclassification of goods but purely the case of misdeclaration of the goods. Appellant have in the B/E and the import documents declared the goods to be Glass Stone stones whereas on examination and assessment the same have been found to be Cubic Zirconia and synthetic Ruby . These findings are supported by the test reports of GLL and Panel Member Report to whom the matter was referred as per the Public Notice 30/2018 dated 19.12.2018. The defence put forth by the appellant do not inspire any confidence in this regard. It cannot be accepted that the appellants were importing the goods without knowing the true nature of the goods. Appellants submission that they have opted for first check, also cannot be said to be valid defence for the reason that first check is a facility to determine the exact nature of the goods, and not a facility to mis-declare. The invoice of the Chinese Supplier is not having any details to infuse any confidence. Hence in our view the appellant have deliberately misdeclared the goods. The goods were sought to be cleared on the value as per the invoice. The Bill of Entry was filed declaring the value as per invoice. To the query raised by the bench, the counsel for the appellant affirmed that the value declared on the invoice was inclusive of freight and other charges - the value declared do not have any ingredients of the transaction value and should have been outright rejected, which have been done by the authorities below. The invoice has been issued without referring to any purchase order stipulating the terms of the supply including the terms of payment. Appellant have no answer to any of these questions which are so essential to determine the validity of the transaction and the declaration made on the Bill of entry. Redemption fine - HELD THAT - The misdeclaration made with intent to evade the payment of the duty goods have been rightly held to be liable for confiscation under section 111 (m) of the Customs Act, 1962 - there are no merits in the submission of the appellant that the redemption fine imposed for redeeming the goods is excessive. Commissioner (Appeal) has in her order already reduced the redemption fine from Rs 6,00,000/- to Rs 4,00,000/-. Penalty imposed under Section 114 AA of the Customs Act, 1962 - HELD THAT - Further from plain reading of the Section 114AA of the Customs Act, 1962, we do not find any such stipulation in the said Section that it applies only to the cases of export. There are no reasons to interfere with the fine and penalties imposed on the appellants - appeal dismissed.

Issues Involved:

1. Misdeclaration of goods and their value.
2. Jurisdiction of the Additional Commissioner of Customs.
3. Validity of the re-determined value of the goods.
4. Legality of confiscation and penalties imposed, including under Section 114AA of the Customs Act, 1962.

Detailed Analysis:

1. Misdeclaration of Goods and Their Value:

The appellants declared the imported goods as 'glass stones' under HS Code 71031029, with a total declared value of Rs. 60,049/-. However, upon examination and testing by the Gemological Institute of India (GII), the goods were identified as synthetic Cubic Zirconia and synthetic ruby, classifiable under CTH 71049090. The declared value was significantly lower than the re-determined value of Rs. 11,14,752/-. The adjudicating authority and the Commissioner (Appeals) concluded that the appellants had grossly misdeclared the description and value of the goods, attempting to evade customs duty.

2. Jurisdiction of the Additional Commissioner of Customs:

The appellants argued that the Additional Commissioner of Customs did not have the authority to adjudicate the case, citing the Supreme Court's judgment in the Canon India case. However, the Commissioner (Appeals) clarified that the Canon India judgment applies to cases involving the Directorate of Revenue Intelligence (DRI) and not to jurisdictional Commissionerates. The adjudication was done by the Additional Commissioner, APSC, who had the jurisdiction and authority under Section 122 of the Customs Act, 1962. Thus, the argument regarding jurisdiction was dismissed.

3. Validity of the Re-determined Value of the Goods:

The value declared by the appellants was rejected under Rule 12 of the Customs Valuation Rules, 2007, and the re-determined value was based on contemporaneous import data (NIDB database) and the panel expert's report. The Commissioner (Appeals) upheld the re-determined value, noting that the appellants had accepted the revised classification and value in their letter dated 04.12.2019. The Tribunal referenced previous judgments, emphasizing that once the importer consents to the enhanced value, it becomes the declared transaction value, requiring no further investigation.

4. Legality of Confiscation and Penalties Imposed:

The goods were held liable for confiscation under Section 111(m) of the Customs Act, 1962, due to the misdeclaration. The redemption fine was initially set at Rs. 6,00,000/- but was reduced to Rs. 4,00,000/- by the Commissioner (Appeals). The appellants argued against the penalty imposed under Section 114AA, citing previous Tribunal decisions that suggested this section applies only to export cases. However, the Tribunal referred to the Delhi bench's decision in the S.D. Overseas case, which upheld the applicability of Section 114AA to import cases as well. The Tribunal concluded that the appellants had knowingly made false declarations, justifying the penalties imposed.

Conclusion:

The Tribunal upheld the findings of the adjudicating authority and the Commissioner (Appeals), confirming the misdeclaration of goods and value, the jurisdiction of the Additional Commissioner, the validity of the re-determined value, and the legality of the confiscation and penalties imposed, including under Section 114AA of the Customs Act, 1962. The appeals were dismissed.

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