2012 (9) TMI 463 - AT - Customs

Appellate tribunal overturns penalties and confiscation, finding no evidence of undervaluation or mis-declaration.

The appellate tribunal set aside the demand for differential duty, confiscation of goods, and penalties imposed on the firm and proprietor for ... Import of goods – rejection of transaction value – goods were imported by the appellant from a trading company at Macau and the goods were found to be of Chinese origin - goods were described in the import invoice as ceiling lamp, wall lamp etc. 100% examination of the goods revealed that the ceiling lamp was fitted with bulb & CFL - Revenue entertained a view that the goods were mis-declared and there was an incomplete declaration. They also felt that on above account the invoice did not reflect the correct value – Held that:- There is virtually no evidence on record to reject the transaction value. Further there is neither any reference nor any evidence to the effect that the importer has paid any under hand consideration to the supplier of the goods - no reference to any contemporaneous goods - no justifiable reasons to reject the transaction value and to enhance the value of the goods in question - imposition of separate penalties on the proprietary firm as also on the Proprietor is against the settled principles of law Issues: Mis-declaration of goods leading to enhanced assessable value, imposition of penalties on both the firm and proprietor.Mis-declaration of Goods and Enhanced Assessable Value:The appellant imported goods described as lighting fixtures from a trading company in Macau, which were found to be of Chinese origin. The Revenue alleged mis-declaration and incomplete declaration, leading to an incorrect value on the invoice. Subsequently, a show cause notice was issued proposing to enhance the assessable value and confirm a differential duty. The original adjudicating authority upheld the demand for differential duty, confiscation of goods, and imposed penalties. The Commissioner (Appeals) also ruled against the appellant. The appellant contended that there was no evidence to reject the transaction value and that the burden of proving undervaluation lay with the Revenue. The appellate authority justified the enhanced value based on Customs Act provisions and Customs Valuation Rules. However, the appellate tribunal found no merit in this reasoning, noting the lack of evidence to reject the transaction value or prove underhand dealings. Consequently, the tribunal set aside the impugned order and allowed the appeal, providing relief to the appellant.Imposition of Penalties:The appellant also challenged the imposition of separate penalties on the firm and its proprietor. The tribunal agreed with the appellant, stating that imposing penalties on both the firm and the proprietor went against established legal principles. Therefore, the tribunal set aside the penalties imposed on both the firm and the proprietor, aligning with the appellant's argument. The judgment, pronounced on 3-6-2011, concluded in favor of the appellant, providing consequential relief and overturning the original adjudicating authority's decision.