2024 (7) TMI 1006 - AT - Customs

Valuation of imported goods - undervaluation and mis-declaration - mis-declaration regarding description and quantity of the goods - HELD THAT - It is an admitted fact that there is misdeclaration made by the Appellant regarding description and quantity of goods. Thus, goods found in excess are liable for confiscation for such misdeclaration. However, misdeclaration of description and value of declared goods and misdeclaration of the excess quantity of goods has to be considered, separately. As submitted by the learned counsel during hearing, by relying on the letter purported to have been written by the Appellant during investigation, whether it is forcefully obtained from the appellant or otherwise cannot be a basis for valuation. There is no proper investigation conducted by the investigating officer to find out the actual transaction value by following proper method of valuation including value of contemporaneous import. In the absence of any admissible evidence regarding contemporaneous import, there is no reason or justification to reject the value declared for the goods, which are declared in the Bill of Entry. In support of the method adopted, adjudicating authority held that the invoice dated 17.11.2011 presented does not represent the consignment as it cannot be co-related to these goods. As regards the valuation of 140 cartons found in excess during examination related to co-axial cooper cables, the Appellant has not declared the same item at the time of filing the Bill of Entry and also not furnished any admissible evidence regarding the value. Though they have produced a letter from overseas supplier, stating that we have already confirmed the value of copper carton RG6 steel cables to US dollar 3.58 (100m) as per our Performa invoice No. 909/11 dated 24.10.2011 , no such Performa invoice was produced during investigation or while submitting reply to the show cause notice. Facts being so, in the absence of any evidence regarding actual transaction value relating to the 140 cartons, the value of Rs.3,56,510/- as determined by the Adjudicating authority as the assessable value, upheld. The impugned order is modified to the extent of upholding the value declared by the Appellant for the 560 cartons of RG6 co-axial steel cables as assessable value, upholding assessable value of excess 140 cartons of co-axial copper cables as Rs.3,56,510/- as assessed by the adjudication authority and the redemption fine is reduced to Rs.35,000/- and penalty reduced to Rs.20,000/-. Appeal allowed in part.

Summary

Issues: Valuation of imported goods, mis-declaration, under-valuation, confiscation, appeal against order confirming duty demand and confiscation.

Analysis:

1. The appeal before the Appellate Tribunal CESTAT Bangalore pertained to the valuation of imported goods, specifically co-axial cables, declared in a Bill of Entry for clearance. The consignment was initially cleared under RMS based on a declared invoice value of USD 12028. However, upon detailed examination, it was discovered that the goods were mis-declared both in terms of description and quantity. An investigation ensued, leading to the importer paying a differential duty and providing a bank guarantee and bond as per the department's assessed value under the Customs Act, 1962.

2. Subsequently, a show cause notice was issued alleging undervaluation and mis-declaration, resulting in the demand for duty and a decision that the goods were liable for confiscation. The appeal was filed after the Adjudicating authority and Commissioner (Appeals) upheld the duty demand and confiscation decision.

3. During the appeal hearing, the Appellant's counsel argued against the allegations of mis-declaration and under-valuation. They contended that the goods' value was accurately reflected in the invoice submitted with the Bill of Entry and that the excess quantity of cartons was due to a mix-up at the load port, supported by a letter from the overseas supplier. The counsel also criticized the department's valuation method, emphasizing the lack of corroborative evidence and proper investigation.

4. The Authorized Representative for Revenue maintained the stance of mis-declaration and under-valuation, asserting that such actions warranted confiscation of the goods.

5. The Tribunal reviewed the records and acknowledged the misdeclaration by the Appellant regarding the goods' description and quantity. However, it noted discrepancies in the department's valuation methodology, particularly in relying solely on a letter from the Appellant during investigation. The Tribunal found insufficient evidence to reject the declared value in the Bill of Entry, especially concerning the 560 cartons of cables.

6. The Tribunal differentiated between misdeclaration of described goods and excess quantity, highlighting the lack of proper valuation methodology by the department. It emphasized the need for corroborative evidence and criticized the reliance on a single letter for valuation. The Tribunal also scrutinized the examination reports and lack of evidence regarding the actual transaction value for the excess 140 cartons of co-axial copper cables.

7. Despite acknowledging the misdeclaration, the Tribunal found the Appellant's lack of awareness of the excess quantity not a reasonable excuse. Consequently, it upheld the confiscation of the 140 cartons and imposed a redemption fine and penalty based on previous judgments and absence of past illegalities by the Appellant.

8. The impugned order was partially modified, upholding the value for the declared 560 cartons and confirming the assessable value for the excess 140 cartons. The redemption fine and penalty were reduced, and the appeal was allowed partly based on the Tribunal's findings.

This comprehensive analysis outlines the key legal issues, arguments presented, and the Tribunal's decision regarding the valuation, misdeclaration, and confiscation of imported goods in the case.