2017 (6) TMI 881 - AT - Customs

Tribunal orders provisional release of imported goods, rejects revaluation based on non-approved sources.

The Tribunal allowed the appeal, remanding the case with directions for provisional release of the imported consignment, retention of samples for testing, ... Rejection of transaction value - redetermination of customs value under Rule 9 - customs valuation - application of Rule 12 - reliance on non approved third party opinion - remand for fresh valuation by approved laboratory or valuer - provisional release subject to bond and bank guarantee - confiscation with option of redemption fine - penalty under Section 112(a) of the Customs ActRejection of transaction value - customs valuation - application of Rule 12 - redetermination of customs value under Rule 9 - Validity of the Commissioner's revaluation of the imported goods and the basis for rejecting the declared transaction value. - HELD THAT: - The Tribunal found that the Commissioner's revaluation was vitiated because it rested on opinions obtained from Samsung India and Sony India, who are neither approved government laboratories nor independent approved valuers and are commercial competitors. No test report from an approved laboratory or competent valuer was obtained. In absence of a competent independent valuation or laboratory test, the sequential valuation exercise culminating in the revaluation under the Valuation Rules cannot be sustained. Consequently the revaluation order was set aside and the matter remitted to the Commissioner for re-determination of value in accordance with the Customs Valuation Rules, 2007 after obtaining valuation/testing from an approved valuer or government laboratory and affording the importer an opportunity to object. [Paras 11, 12, 15]Impugned revaluation set aside; matter remanded to the Commissioner for fresh valuation in accordance with the Valuation Rules based on testing/valuation by an approved valuer or government laboratory and after hearing the appellant.Reliance on non approved third party opinion - remand for fresh valuation by approved laboratory or valuer - Appropriate procedure to be followed on remand for determination of value. - HELD THAT: - The Tribunal directed that the Commissioner must obtain samples and get the goods tested or valued by an approved valuer or a government laboratory/chartered engineer. The valuation shall then be finalised in accordance with the Valuation Rules, 2007, and the appellant must be given adequate opportunity to file objections to the laboratory/valuer opinion before a reasoned order is passed. [Paras 12, 15]Commissioner to obtain valuation/testing from an approved source and thereafter pass a reasoned order after giving the importer opportunity to be heard.Provisional release subject to bond and bank guarantee - Whether the imported consignments should be released pending fresh valuation and adjudication. - HELD THAT: - The Tribunal directed provisional release of the consignments forthwith subject to retention of necessary samples for testing and on condition that the appellant furnishes security as directed by the Tribunal. The directions are interim and intended to protect revenue while enabling the Commissioner to complete the ordered valuation exercise on remand. [Paras 12, 15]Consignments to be provisionally released on conditions directed by the Tribunal, with samples retained for testing.Confiscation with option of redemption fine - penalty under Section 112(a) of the Customs Act - Status of confiscation and penalty adjudication in light of the remand. - HELD THAT: - The Tribunal did not adjudicate the merits of confiscation or the penalty imposed under Section 112(a). Those matters remain for consideration by the Commissioner after the fresh valuation/testing is completed and the importer is given opportunity to file objections and be heard; accordingly they have been remitted for fresh consideration. [Paras 12, 15]Confiscation and penalty issues remitted to the Commissioner for fresh adjudication after valuation/testing and hearing.Final Conclusion: Appeal allowed by way of remand: the Commissioner's revaluation is set aside for relying on non approved third party opinions; consignments are to be provisionally released subject to conditions and samples retained; the Commissioner is directed to obtain valuation/testing from an approved valuer or government laboratory, permit the importer to raise objections, and thereafter pass a reasoned order, with confiscation and penalty matters to be reconsidered in the light of the fresh valuation. Issues Involved:1. Rejection and revaluation of declared value under Rule 12 of Customs Valuation Rules, 2007.2. Liability of goods to confiscation with an option to redeem by payment of redemption fine.3. Imposition of penalty under Section 112(a) of the Customs Act, 1962.Detailed Analysis:1. Rejection and Revaluation of Declared Value:The primary issue was whether the Commissioner rightly rejected the declared value of imported LED TV panels and revalued them under Rule 12 of the Customs Valuation Rules, 2007. The appellant had filed warehousing bills of entry for Samsung/Sony LED TV panels from Thailand. Discrepancies were found during examination, such as mismatched model numbers, undeclared curved models, and additional parts like motherboards and table stands. The revenue suspected misdeclaration and undervaluation, prompting them to seek import prices from Samsung and Sony. Samsung indicated that the goods were not bare panels but complete TV sets with additional parts, while Sony provided specific FOB prices for certain models. The Commissioner concluded that the declared value was liable for rejection due to misdeclaration and revalued the goods by adding the value of panels, additional parts, and assembly charges.2. Liability of Goods to Confiscation:The Commissioner held that the goods were liable to confiscation due to misdeclaration. The appellant argued that the declared value was the transaction value under customs rules and that minor discrepancies should not influence the price. However, the Commissioner found deliberate misdeclaration with the intent to evade duty, leading to the conclusion that the goods were neither mere LED panels nor complete TVs but were fitted with additional parts. Consequently, the goods were considered liable for confiscation with an option to redeem by paying a fine.3. Imposition of Penalty:The Commissioner imposed a penalty of Rs. Eight lakhs under Section 112(a) of the Customs Act, 1962, citing deliberate misdeclaration to evade duty. The appellant contended that there was no misdeclaration and that the goods were correctly declared as LED panels with additional parts included in the price. The Commissioner, however, determined that the misdeclaration warranted the penalty.Judgment and Directions:The Tribunal found that the Commissioner relied on opinions from Samsung and Sony, who were not approved government labs or valuers and were competitors of the appellant. There was no test report from any approved laboratory, making the revaluation untenable. The Tribunal allowed the appeal by remanding the case with directions:1. The imported consignment should be released provisionally, retaining samples for testing, subject to the appellant furnishing a bond for the revalued amount and a bank guarantee for each bill of entry.2. The Commissioner should have the samples tested or valued by an approved valuer or government lab/chartered engineer. The valuation should be finalized based on the competent laboratory's opinion, allowing the appellant to file objections before passing a reasoned order.The appeal was allowed by way of remand with these directions.