2009 (3) TMI 730 - AT - Customs

Tribunal Upholds Pre-Deposit Requirement Due to Import Undervaluation; Grants 70% Penalty Reduction, Requires 30% Deposit

KDS EXPORTS Versus COMMISSIONER OF CUSTOMS, NEW DELHI

The Tribunal upheld the requirement for the appellant to make a pre-deposit, citing evidence of import undervaluation and the absence of a retraction of ... Stay/Dispensation of pre-deposit - Undervaluation. The applications for stay are partly allowed to the extent of reduction of 70% of penalty. Apart from the requirement to deposit the entire amount of duty demanded under the impugned order, the appellant need to deposit penalty upto 30% only within eight weeks. The issues presented and considered in the judgment are as follows:1. Whether the appellant undervalued imports, leading to duty evasion.2. Whether the documents retrieved from the computer of the appellant support the allegation of undervaluation.3. Whether the admission statement made by the appellant regarding undervaluation is valid.4. Whether the appellant should be granted a concession in relation to pre-deposit for appealing on merits.5. Whether there is a case of undue hardship to the appellant in depositing the required amount.6. Whether the penalty amount should be reduced for the appellant.Detailed analysis of the issues:The records revealed that documents retrieved from the appellant's computer indicated undervaluation of imports, supported by email records and the appellant's admission. The appellant argued that the documents were from 2006, not covering the entire period in question. The respondent rejected the appellant's contentions, emphasizing the absence of a retraction of the admission statement.The Tribunal considered the requirement of pre-deposit, balancing the appellant's hardship with the revenue's interest. The undisputed evidence of undervaluation and lack of proof of retraction led the Tribunal to uphold the pre-deposit requirement. The burden was on the appellant to prove the extent of undervaluation, especially when claiming a specific percentage.The Tribunal found no irregularity in the findings and denied the appellant's request for a reduction in the deposit amount. It concluded that there was no undue hardship to the appellant and upheld the deposit requirement in the interest of revenue.Regarding the penalty amount, the Tribunal granted a 70% reduction, directing the appellant to deposit 30% of the penalty along with the remaining duty amount. The appeals were to proceed to regular hearing, with compliance reporting scheduled for a specified date.Significant holdings:The Tribunal upheld the requirement of pre-deposit based on evidence of undervaluation and lack of proof of retraction of the admission statement. It emphasized the burden on the appellant to establish the extent of undervaluation.The Tribunal's decision to grant a 70% reduction in the penalty amount demonstrated a balance between the appellant's interests and revenue considerations.The final determinations on each issue were in favor of the respondent, upholding the pre-deposit requirement and granting a partial reduction in the penalty amount.Overall, the Tribunal's judgment focused on the evidentiary support for undervaluation, the burden of proof on the appellant, and the balancing of interests between the appellant and revenue authorities.