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TMI Blog2017 (8) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... e transaction itself had taken place. This Court finds substance in the submission that rate in the local market has not been ascertained nor has been relied upon for the purposes of determining the question of undervaluation. Action under Section 54(1)(21-B) - Held that: - The order of penalty is not sustainable for the reason that the penalty order transgresses the authority invoked while issuing notices under Section 54(1)(14) and as notices had not been issued calling for explanation of the revisionist under Section 54(1)(21-B) of the Act, the penalty order is not sustainable. So far as the question with regard to determination of undervaluation is concerned, also it is found that market rate relied upon for the purposes of undervalu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled under Section 58 of the Act. 2. Following questions of law have been framed for consideration of the present revision:- A) Whether Tribunal was legally justified in affirming the levy of penalty on the ground other than mentioned in the Notice issued for levy of penalty? D) Whether penalty on the ground of undervaluation can be imposed on the basis of value gathered from the place of transaction, even without confronting with the sample of the goods? It is also urged that authorities have erred in proceeding to pass the order of penalty, invoking jurisdiction under Section 54(1)(21-B), although no notice or proceedings were initiated in respect thereof. 3. Learned Standing Counsel has tried to justify the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y dealer or the documents issued by a bona fide dealer with regard to the accompanying goods contained wrong particulars or the goods are undervalued to the extent of more than fifty percent of the value of goods prevalent at the relevant time in the local market area where the said transaction had taken place, with intention to evade payment of tax, it shall pass an order imposing a penalty not exceeding forty per cent of the value of such goods, as he deems fit. 6. Section 54 of the Act contemplates levy of penalty under Chapter VIII for the wrong described in Column 2 in table provided for in the Act. Section 54(1)(14) and (21-B) are also relevant and are extracted hereinafter:- 54. Penalties in certain cases.-(1) The assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant time in the local market area where the transaction has taken place, with intention to evade payment of tax. 40% of the value of goods. 7. Admittedly, in the facts of the present case, goods were being imported by the assessee from Nepal, and the import was subject to examination by the custom authorities. It is not the case off the revenue that any undervaluation was noticed by the custom authorities. The proceedings in the instant case nevertheless have been initiated on the premise that value of goods being imported was more than ₹ 1200-1300 per Kg. in the market at Lucknow and Kanpur, whereas value of big cardamom was disclosed at ₹ 160 per Kg. The difference in value was so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, by holding that the order of penalty is not sustainable for the reason that the penalty order transgresses the authority invoked while issuing notices under Section 54(1)(14) and as notices had not been issued calling for explanation of the revisionist under Section 54(1)(21-B) of the Act, the penalty order is not sustainable. So far as the question with regard to determination of undervaluation is concerned, also it is found that market rate relied upon for the purposes of undervaluation is not the market rate shown to exist in the market area, where the transaction itself has taken place. The questions are answered, accordingly. 10. Let the matter be placed before the Tribunal for proceeding further, in accordance with law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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