2024 (10) TMI 403 - AT - Customs

Rejection of transaction value and re-determination of the value of the imported goods on the basis of imports of the same model goods by the same importer earlier - Confirmation of the demand of differential duty with interest and penalties - HELD THAT - Only the invoice number of the goods whose value is adopted is given. There is no discussion as to why the declared values were rejected under Rule 12 of the Valuation Rules nor any details of the Bills of Entry under which identical or similar goods were imported. There is also no comparison of the features of the goods which were imported and the features of the goods based on whose values the values were re-determined. It is found that the rejection of transaction value, re-determination of values, demand of differential duty, holding the imported goods liable for confiscation and imposition of penalties cannot be sustained in respect of these four goods. The impugned order is modified to the extent of setting aside the re-determination of the value, demand of differential duty and interest and equivalent mandatory penalty under section 114A in respect of the goods - the penalty under imposed in the impugned order section 114AA is reduced to rupees four lakhs - matter remanded to the Principal Commissioner solely for the purpose of calculation. Appeal allowed in part and part matter on remand.

Issues Involved:
1. Whether the Commissioner was correct in rejecting the declared transaction value under Rule 12 and re-determining it under Rules 4 & 5.
2. Confirmation of the demand of differential duty with interest and penalties.
3. Application of extended period of limitation under section 28(4) of the Customs Act, 1962.
4. Imposition of penalties under sections 114A and 114AA of the Customs Act, 1962.
5. Examination of the validity of the evidence supporting undervaluation and collusion allegations.

Detailed Analysis:

1. Rejection of Declared Transaction Value:
The primary issue was whether the declared transaction value of the imported goods was correctly rejected by the Commissioner. The appellant argued that the goods were undervalued due to being unpopular brands or lower versions, and the Commissioner incorrectly rejected the discounted sales promotion price declared by the supplier. The Commissioner, however, rejected this claim, determining that the goods were undervalued based on previous imports of identical goods and market surveys. The Tribunal found that for goods already covered by a previous final order and upheld by the Supreme Court, the rejection of declared values was justified. However, for goods not covered by the earlier order, the Tribunal noted a lack of detailed comparison and reasoning for rejecting the declared values, thus setting aside the re-determination of values for these items.

2. Confirmation of Differential Duty and Interest:
The Tribunal addressed the confirmation of the demand for differential duty and interest. For goods previously adjudicated, the Tribunal upheld the demand, aligning with the Supreme Court's decision. However, for goods not covered by the earlier decision, the Tribunal found the demand unsustainable due to insufficient evidence and reasoning for re-determining the values, thus setting aside the demand for these goods.

3. Application of Extended Period of Limitation:
The Commissioner invoked the extended period of limitation under section 28(4) of the Customs Act, citing willful misstatement and suppression of facts by the appellant. The Tribunal upheld this invocation for goods previously adjudicated, as the issue had attained finality. However, for other goods, the Tribunal did not find sufficient basis for applying the extended period due to lack of conclusive evidence of misstatement or suppression.

4. Imposition of Penalties:
Penalties under sections 114A and 114AA were imposed for willful misstatement and mis-declaration. The Tribunal upheld the penalties for goods covered by the previous Supreme Court decision but reduced the penalty under section 114AA for other goods due to insufficient evidence of willful misstatement and collusion.

5. Examination of Evidence for Undervaluation and Collusion:
The appellant contested the evidence supporting allegations of undervaluation and collusion. The Tribunal found that for goods covered by the earlier decision, the evidence was sufficient and had attained finality. However, for other goods, the Tribunal found the evidence lacking, particularly regarding the comparison of imported goods' features and values, and thus set aside the related findings and penalties.

Conclusion:
The Tribunal partially allowed the appeal, setting aside the re-determination of value, demand of differential duty, and penalties for goods not covered by the earlier final order. It upheld the rest of the impugned order for goods covered by the previous Supreme Court decision, remanding the matter for recalculation of penalties. The judgment highlights the importance of detailed evidence and reasoning in customs valuation disputes.

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