2020 (1) TMI 1346 - AT - Customs

Tribunal emphasizes expert opinion in import valuation, sets aside confiscation order

The Tribunal allowed the appeal by M/s Chandan Steel Limited, challenging the re-determination of the value of imported goods and confiscation for ... Valuation of imported goods - stainless steel melting scrap-316 grade - mis-declaration of value - case of appellant is that the assessing authorities should have subjected the material to testing but had failed to do so - HELD THAT:- In M/S CHANDAN STEEL LTD. VERSUS COMMISSIONER OF CUSTOMS (EXPORT) , JNCH, NHAVA SHEVA [2018 (5) TMI 995 - CESTAT MUMBAI], the Tribunal has held that customs examination report, without obtaining the expert opinion, cannot be the reason to determine the nature of goods and that mere agreement by the appellant or his employee with the contents of such examination report cannot be considered as conclusive proof in support of claim of Revenue regarding confiscation of goods, payment of fine and penalty. There are no reason to disagree with the finding therein that report of visual examination of the cargo does not offer sufficient evidence to conclude that the goods are to be used other than for the purposes claimed or that these had been mis-declared - appeal allowed - decided in favor of appellant. Issues:1. Re-determination of value of imported goods and confiscation for mis-declaration.2. Reliance on admission by a third party.3. Failure to conduct testing on imported material.4. Interpretation of certificates issued by overseas supplier and jurisdictional range superintendent.5. Requirement of expert opinion for determining the nature of imported goods.6. Validity of customs examination report without expert opinion.Analysis:1. The appeal pertains to M/s Chandan Steel Limited challenging the order-in-appeal upholding the re-determination of the value of imported goods and confiscation for mis-declaration. The Tribunal disposed of the appeal based on grounds of appeal and previous decisions in the appellant's own case.2. The re-determination was based on the discovery that part of the imported consignment of 'stainless steel melting scrap-316 grade' contained secondary material not declared in the bill of entry. The declared value was US $825 per metric ton, but nine metric tons of secondary material were found.3. The appellant argued that the lower authorities relied on an admission by a third party, Shri MV Pawar, who was not a director of the appellant-company but part of the customs broker's establishment. Additionally, it was contended that the material should have been subjected to testing, which was not done by the assessing authorities.4. The Tribunal referenced a previous decision in Chandan Steel Limited v. Commissioner of Customs (Export), where it was held that expert opinion is necessary to ascertain the nature of imported goods, and mere agreement by the appellant or their employee with the customs examination report is not conclusive proof.5. Another decision in the same case reiterated the requirement for expert opinion in determining the nature of goods, stating that visual examination alone is insufficient evidence to conclude mis-declaration or alternate usage of the goods.6. Based on the precedents and the lack of expert opinion in the present case, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the need for expert assessment in determining the nature of imported goods and rejecting reliance solely on visual examination reports without expert input.