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2023 (12) TMI 13 - AT - CustomsUndervaluation of the imported goods - Rejection of transaction value - redetermination of value based on contemporaneous imports of similar goods available in the NIDB database - HELD THAT - Once the appellant accepted the enhanced value in writing, it was binding on both sides as per section 147. In fact, there was not even a need to issue any speaking order as per section 17(5) of the Act - There was no forced acceptance of the valuation based on the NIDB data. If the appellant did not agree to the re-determination of value, it did not have to accept the proposed value or it could have paid duty under protest. If the appellant wanted to get the goods cleared while not accepting the values proposed by the department, it could have also got the goods provisionally assessed pending finalization of assessment. If it wanted to avoid demurrages, it could have got the goods shifted to a Customs bonded warehouse under section 49. The appellant s contention that the rejection of the transaction value under Rule 12 was not correct holds no water. The values declared in the Bills of Entry were doubted because they were far lower than the values of the contemporaneous imports available in the NIDB. When these were shown, the appellant accepted valuation on the basis of the NIDB data. Therefore, rejection of the transaction value as per Rule 12 is absolutely correct - The appellant s contention that valuation should have been done as per Rule 3 is not correct because, Rule 3 is subject to Rule 12 under which the transaction value can be rejected as has been done in this case. Having rejected the declared assessable value under Rule 12, the department sought to re-determine it under Rule 5 based on the contemporaneous value of similar goods imported into the country. It needs to be noted that since the imported goods were miscellaneous motors of various specifications there cannot be identical goods to determine duty as per Rule 4 and hence determining duty on the basis of values of similar goods under Rule 5 is fair and proper. To determine the value of the contemporaneous imports, the relevant data was extracted from the NIDB. The department also referred the matter to a Chartered Engineer to determine the value of the imported goods. In this case, since the fact that the goods were undervalued and the correct assessable value for the goods imported under the two Bills of Entry dated 9.2.2009 and 17.2.2009 are as per the charts prepared by the officers as per the NIDB data was not only not disputed but positively accepted, in writing, by the appellant, these facts were not in dispute and neither side needed to produce any evidence - there is no force the submissions of the learned counsel for the appellants that the department failed to provide evidence in support. Revenue need not produce any evidence. In fact, it did not have to even issue the SCN or hold a personal hearing insofar as the re-assessment of these two Bills of Entry is concerned because the appellant had waived them in writing. Re-determination of value and confirmation of demand in respect of the five past Bills of Entry - HELD THAT - At the time of recording the statement, the appellant could not remember the exact number of Bills of Entry filed before and also did not have the details. All that is stated is that he is ready to pay Customs Duty for the same, if any. Neither were the details of the Bills of Entry nor the goods imported under them, their declared values, corresponding values of goods in the NIDB and why it became necessary to re-open the assessment which were already finalized shown to the appellant nor were they agreed to. This statement does not support the case of the Revenue in any sense. Confiscation of the goods imported in the two Bills of Entry and their release on payment of redemption fine - HELD THAT - Once the goods are confiscated, section 125 requires that, unless the goods are prohibited goods, the owner should be given an option to redeem the goods on payment of fine. If they are prohibited goods, the adjudicating authority has the discretion of allowing redemption or not. This section further restricts the quantum of penalty to the market value of the goods. It is not the case of either side that the motors imported by the appellant were prohibited goods. Therefore, they were released on redemption fine. The seized goods imported under Bill of Entry dated 9.2.2009 were valued at Rs. 48,36,860/- and the redemption fine imposed was Rs. 10,00,000/-. The seized goods imported under Bill of Entry dated 17.2.2009 were valued at Rs. 63,09,086/- and the redemption fine imposed was Rs. 12,50,000/. In the factual matrix of this case, the fines imposed are fair. Order holding the goods imported under the five past Bills of Entry liable to confiscation and imposition of redemption fine since they were not available - HELD THAT - If the goods are not available neither can the government take over the goods nor can it return them to the owner or payment of fine. The case of the goods imported under the above two Bills of Entry was different as they were seized and were provisionally released on execution of a bond and bank guarantee. The bond and bank guarantee are meant to cover the redemption fine, if any, imposed if the goods are confiscated and released. Penalty on the importer under section 114A - HELD THAT - As it is found that the demand of differential duty under section 28 in respect of the past Bills of Entry cannot be sustained, the penalty under section114A as well is set aside. As far as the duty on the two current Bills of Entry are concerned, they are a matter of re-assessment under section 17 and not a case of duty not levied or short levied under section 28. Penalty on Shri Qasim under section 112(a) - HELD THAT - As it is already found that the confiscation of the goods imported under the two current Bills of Entry and their release on payment of redemption fine need to be upheld and the confiscation and imposition of redemption fine in respect of the five past Bills of Entry is set aside - Shri Qasim is the person most directly connected with the filing of the two Bills of Entry and the values of the goods in these did not match the imported goods which rendered the goods liable to confiscation under section 111(m). Therefore, Shri Qasim squarely falls under Section 112(a) and is liable to penalty under it. The penalty under section 112(a) has been imposed considering the differential duty confirmed in respect of the two current and five past Bills of Entry. As it is already found that the demand in respect of the five past Bills of Entry cannot be sustained - it is found proper to reduce the penalty on Shri Qasim also from Rs. 15,00,000/- to Rs. 3,00,000/-. Appeal allowed in part.
Issues Involved:
1. Rejection of transaction value and re-determination of value in respect of the two current Bills of Entry. 2. Rejection of transaction value and re-determination of value in respect of the five past Bills of Entry. 3. Confiscation of the goods imported in the two Bills of Entry and their release on payment of redemption fine. 4. Order holding the goods imported under the five past Bills of Entry liable to confiscation and imposition of redemption fine since they were not available. 5. Imposition of penalty on the importer under section 114A. 6. Imposition of penalty on Shri Qasim under section 112(a). Summary: Rejection of transaction value and re-determination of value in respect of the two current Bills of Entry: The Tribunal upheld the rejection of the transaction value under Rule 12 and its re-determination based on the National Import Database (NIDB) and Chartered Engineer's certificate. The appellant had voluntarily accepted the re-determined values and agreed to pay the differential duty. The Tribunal emphasized that "what is admitted need not be proved," referencing Section 58 of the Indian Evidence Act. Therefore, the re-assessment of duty in respect of the two current Bills of Entry was found sustainable. Rejection of transaction value and re-determination of value in respect of the five past Bills of Entry: The Tribunal found that the demand of differential duty for the five past Bills of Entry was not sustainable. The goods had been cleared for home consumption after examination and assessment, and there was no evidence of collusion or willful mis-statement or suppression of facts. The Tribunal noted that the statement by the appellant did not support the case of the Revenue, as it did not provide details or agree to the re-assessment of the past Bills of Entry. Confiscation of the goods imported in the two Bills of Entry and their release on payment of redemption fine: The Tribunal upheld the confiscation of the goods imported under the two current Bills of Entry under Section 111(m) and their release on payment of redemption fine. The fines imposed were deemed fair given the factual matrix of the case. Order holding the goods imported under the five past Bills of Entry liable to confiscation and imposition of redemption fine since they were not available: The Tribunal set aside the confiscation of goods imported under the five past Bills of Entry and the imposition of redemption fine. It was noted that goods not available cannot be seized or confiscated. The Tribunal emphasized that the demand under Section 28 re-assessing the duty in respect of these five Bills of Entry was not sustainable. Imposition of penalty on the importer under section 114A: The Tribunal set aside the penalty under Section 114A as the demand of differential duty under Section 28 in respect of the past Bills of Entry was not sustainable. The re-assessment of duty in the two current Bills of Entry was a matter of re-assessment under Section 17, not a case of duty not levied or short-levied under Section 28. Imposition of penalty on Shri Qasim under section 112(a): The Tribunal upheld the penalty on Shri Qasim under Section 112(a) but reduced it from Rs. 15,00,000/- to Rs. 3,00,000/-. The Tribunal found that Shri Qasim was directly connected with the filing of the two Bills of Entry and the values of the goods did not match the imported goods, rendering them liable to confiscation under Section 111(m). Conclusion: - Customs Appeal No. 3/2011 was partly allowed by upholding the re-assessment of duty and confiscation of goods in the two current Bills of Entry, while setting aside the demand of duty and confiscation in the five past Bills of Entry. - Customs Appeal No. 4/2011 was partly allowed by reducing the penalty on Shri Mohd. Qasim Khan from Rs. 15,00,000/- to Rs. 3,00,000/-.
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