2023 (7) TMI 1249 - AT - Customs

Undervaluation of goods - import of a barge, Aqua Float 300, towed by tug, Fordeco 61 - enhancement of value - value of other equipment on board the barge was required to be added separately or not - Confiscation - redemption fine - penalty - HELD THAT - It is found that the two individuals who were not imposed with penalties in the impugned order are not notices and, to that extent, the appeal proceedings is limited to the importer. For asserting that the equipment on board the barge should be charged, independent of the barge, to duty separately, the appellant- Commissioner has relied upon an unauthenticated and untenable source for claiming that these were not integral to the barge. We find no evidence on record that these were not on board the barge when acquired by the importer and, in such circumstances, these cannot be disaggregated from the barge for separate determination of assessable value. There is no allegation in the show cause notice that the cost, in CIF terms, is in question and rejection of declared value was proposed, under rule 10A of Customs Valuation (Determination of Value of Imported Goods) Rules, 1988, only owing to the purchase price, and declared value, not being inclusive of freight. Non-inclusion of freight is to be proceeded with under rule 9(2) of Customs Valuation (Determination of Value of Imported Goods) Rules, 1988 whereas rule 10A of Customs Valuation (Determination of Value of Imported Goods) Rules, 1988 is limited to recourse to rule 5 to rule 8 of the said Rules. The appeal of Revenue appears to have ignored this fundamental and crucial difference between adjustment of transaction value for cost and services and alternatives to declared price upon rejection under rule 10A of Customs Valuation (Determination of Value of Imported Goods) Rules, 1988. The determination by the adjudicating authority cannot, therefore, be displaced on the grounds preferred in the appeal. Penalties - HELD THAT - As no misdeclaration has been found insofar as the import is concerned, there is no reason to consider imposition of penalties, too, on the individuals. Appeal dismissed.

Summary

Issues involved:
The issues involved in this case include undervaluation of imported goods, application of Customs Valuation Rules, imposition of penalties, and confiscation of goods.

Undervaluation of imported goods:
The case involved the import of a barge towed by a tug, with discrepancies in the declared value and the equipment on board. The Customs authorities proposed to enhance the value of the tug and add the value of equipment on board to demand differential duty. However, the Commissioner of Customs held that the declaration as 'old and used' was a technical irregularity, and no duty liability existed. The Commissioner limited the penalty and allowed redemption of the confiscated tug on payment of a fine.

Application of Customs Valuation Rules:
The Revenue appealed the decision, challenging the dropping of the proposal to adopt a revised value and the non-assessment of equipment to duty separately. The Tribunal found that the equipment on board the barge should not be charged separately as there was no evidence they were not integral to the barge at the time of acquisition. Regarding the value of the tug, the Tribunal upheld the findings of the Commissioner, stating that substantial grounds did not exist for rejection of the invoice value.

Imposition of penalties:
The Tribunal noted that no misdeclaration was found in the import, leading to the conclusion that there was no basis for imposing penalties on the individuals involved. The appeal of the Revenue was dismissed as it lacked merit, and the decision of the Commissioner was upheld.