2015 (2) TMI 1002 - AT - Customs

Tribunal Upholds Duty Rejection on Poppy Seeds, Requires 15,00,000 Predeposit

Haji Sumar Partner and Diamond Traders Versus Commissioner of Customs (Seaport-Export) Chennai

The Tribunal upheld the rejection of the declared value of Poppy Seeds, determined a differential duty, and directed the applicant to make a predeposit of ... Waiver of pre deposit - Misdeclaration of value of goods - Demand of differential duty - Penalty u/s 112(a) - Held that:- chart showing comparison of the value declared at the time of export in Turkey and declared in India prepared by the First Secretary (Trade), Embassy of India, Moscow on the basis of documents of Turkish Customs would show that the exporter declared in Turkey as US$ 2500 per MT and it was declared in India as US$ 750 per MT. On a perusal of the invoice dt. 24.3.2006 of the supplier to the applicant would show that the value was declared as US$ 2500 per MT without reference on Turkish attested documents. We find that no attempt was made to get English translation of the Turkish documents from their supplier. applicant failed to make out a strong prima facie case for waiver of predeposit - Partial stay granted. Issues:Import of Poppy Seeds, Misdeclaration of value, Rejection of declared value, Differential duty determination, Imposition of penalty, Waiver of predeposit of duty.Analysis:1. Misdeclaration of Value and Differential Duty Determination:The applicants imported Poppy Seeds and declared a value of US$ 750 per MT, which was later found to be misdeclared as US$ 2500 per MT by the DRI officers. The Commissioner of Customs rejected the declared value, determined it at US$ 2500 per MT, and confirmed a differential duty of &8377; 53,31,793 along with interest and penalty. The applicants filed applications for waiver of predeposit of duty, arguing that the value rejection was based on Turkish documents without providing English translations. The advocate contended that the demand of duty was calculated using a statement from the First Secretary (Trade), Embassy of India, Moscow, which referenced a letter from Turkish Customs not supplied to the applicant. The Tribunal found that the value declared in Turkey was US$ 2500 per MT, while in India, it was declared as US$ 750 per MT. The Tribunal noted that the supplier's invoice also mentioned the value as US$ 2500 per MT, and no effort was made to obtain English translations of the Turkish documents. The Tribunal held that the Customs authorities must follow international prices for determining declared value, and the applicant failed to establish a strong prima facie case for waiver of predeposit.2. Legal Arguments and Precedents:The advocate for the applicant relied on the decision of the Hon'ble Supreme Court in CC Calcutta Vs South India Television(P) Ltd. and argued that transaction value cannot be rejected without valid documents. However, the Revenue's representative referred to the decision in Radhey Shyam Ratanlal Vs CC (Adjn.) Mumbai, emphasizing that the value declared by the exporter in Turkey was US$ 2500 per MT, as evidenced by the statement from the First Secretary (Trade), Embassy of India, Moscow. The Tribunal found that the applicant's reliance on the South India Television case was not applicable to the facts of this case, as the value determination was based on the supplier's declaration.3. Decision and Predeposit Requirement:After considering both sides' arguments and examining the evidence, the Tribunal concluded that the applicant did not establish a strong prima facie case for waiver of predeposit. The Tribunal directed the applicant to make a predeposit of &8377; 15,00,000 within 8 weeks, with the balance of duty, interest, and penalty to be waived upon this deposit. The recovery of the remaining amount was stayed pending the appeal's disposal, with a compliance report due on a specified date.In conclusion, the Tribunal upheld the rejection of the declared value, determined the differential duty, and directed the applicant to make a predeposit while granting a waiver for the balance amount upon compliance. The judgment emphasized the importance of valid documentation and international prices in determining declared values for imported goods.