2009 (2) TMI 588 - AT - Customs

Tribunal allows appeal in misdeclaration case, emphasizes importance of confessional statements

MAHENDRA STEEL CORPORATION Versus COMMISSIONER OF CUS., NHAVA SHEVA

The Tribunal allowed the appeal in a case involving misdeclaration of imported goods, where the appellant admitted past misdeclarations. The Tribunal held ... Demand - Misdeclaration Issues: Misdeclaration of imported goods, disputed value adopted by the department, calculation of duty based on price, imposition of penalty under Section 114A of the Customs Act.In this case, the appellant imported goods declared as defective quality but later found to be misdeclared as prime quality. The supplier admitted the mistake and did not charge the price difference to maintain a business relationship. The appellant admitted to similar misdeclarations in past consignments and agreed to pay the differential duty. A show-cause notice was issued demanding duty based on the international price prevailing during the relevant period. The Commissioner confirmed the duty, interest, and imposed a penalty under Section 114A of the Customs Act.The appellant disputed the value adopted by the department, arguing that the price declared in the bills of entry was correct and that his retracted statement should not be relied upon. The appellant also contended that the LME price adopted by the department included freight and insurance, resulting in a higher duty demand. The appellant presented evidence to support his claim that the duty demand should be reduced.The Tribunal considered the submissions and noted the appellant's admission of past misdeclarations and the modus operandi used to evade customs duty. The Tribunal held that the retraction of the statement was an afterthought and that duty could be demanded based on the confessional statement. The Tribunal also found that the LME prices were CIF prices, and no additional charges should have been included. The matter was remanded back to the Commissioner to determine the duty payable based on CIF prices, with the penalty to be reduced proportionately. The appeal was allowed on these terms.The judgment references legal precedents to support the decision, emphasizing the significance of confessional statements and the correct calculation of duty based on the appropriate price indicators. The Tribunal's decision provides clarity on the duty calculation methodology and the implications of misdeclaration in import transactions, ensuring fair enforcement of customs regulations and penalties under the Customs Act.