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of <h1>Tribunal upholds penalty for Customs House Agent's undervaluation, reduces amount due to procedural errors</h1> <h3>SM Enterprises Versus Commissioner of Customs(CSI Airport), Mumbai</h3> SM Enterprises Versus Commissioner of Customs(CSI Airport), Mumbai - 2012 (286) E.L.T. 242 (Tri. - Mumbai) Issues:1. Undervaluation of imported goods.2. Liability of Customs House Agent (CHA) in case of undervaluation.3. Applicability of penalty and redemption fine in valuation matters.Analysis:Issue 1: The case involved the import of goods by M/s. IOL Broadcast Ltd. through their authorized courier, which were initially declared at a lower value than required by Customs Valuation Rules. The importer provided additional details only after being prompted by the customs department, and the adjudicating authority found the undervaluation to be established. The tribunal upheld this finding, emphasizing that the declared value did not comply with the rules.Issue 2: The Customs House Agent (CHA), S.M. Enterprises, filed the regular Bill of Entry on behalf of the importer without verifying the correct valuation details. The tribunal noted that the CHA should have inquired with the importer about the valuation specifics before filing the entry. As the CHA failed to do so and filed the entry with the same undervalued amount, they were found to have knowledge of the customs valuation issue. Consequently, the tribunal agreed with the lower authorities' decision to hold the CHA accountable for not ensuring accurate valuation details.Issue 3: The appellant's counsel argued that penalty and redemption fine should not be imposed in valuation matters, citing previous tribunal decisions. However, the tribunal distinguished the facts of those cases from the present one and upheld the penalty imposed by the Commissioner (Appeals). The tribunal acknowledged the procedural errors by the CHA but reduced the penalty amount to Rs. 5,000 in each case as a mitigating measure.In conclusion, the tribunal disposed of the appeals by affirming the undervaluation finding, holding the CHA responsible for inadequate due diligence, and reducing the penalty amount while upholding its imposition in the context of valuation matters.
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