2017 (10) TMI 151 - AT - Customs

Tribunal orders reevaluation in over-valuation case, criticizes lack of reasoning

Vishal Impex Versus Commissioner of Customs & Central Excise, Coimbatore

The Tribunal remanded the case involving alleged over-valuation of exported goods for higher benefits, criticizing the lack of detailed reasoning in the ... Valuation of export goods - misdeclaration of Value - dyed and printed fabrics (Dupatta and Sarees) made out of 100% Polyester Filament Yarn/Texturised Yarn - It appeared to the department that the appellant had misdeclared the value by over-invoicing in order to get higher ineligible Duty Entitlement Pass Book (DEPB) benefit in contravention of Section 14 (1), Section 50 of the Customs Act and the provision of the Foreign Trade Policy 2004-2009 relating to DEPB scheme - The major grievance of the appellant concerns the method of which the CIU report for Present Market Value (PMV) of the export goods was determined and its veracity. Held that: - it emerges that appellant had not initially been given a copy of the CIU report and they had to obtain the same on 09.10.2006 after they made RTI application. Appellant also draws attention to further discrepancies in the CIU report stating that the description of the goods have been given as 'sarees, blouses, skirts etc.', whereas the goods exported were '100% Polyester Fabric' - a doubt or suspicion on the correctness or otherwise of the import or export transaction will require to be supported by evidence and not on half baked information or reports, assumptions and presumptions. It is also well settled cardinal rule of law that if any documents are relied upon to allege an infraction or act or omission on the part of a noticee, copies of the same will definitely have to be provided to such noticee, to enable him to put forth his counter response to the same - In the instant case, the main edifice of the charge of overvaluation is the purported CIU report to ascertain the Present Market Values (PMV). By not supplying a copy of the same to the appellant during the adjudication proceedings, the latter have certainly been put to disadvantage - We are unable to find any reasoned and in-depth analysis of the contentions of the appellant nor is there any adequate discussion and reasoning while upholding the allegations against the appellant. The impugned order indeed suffers from lack of application, non-cognizance of submissions made by the appellant and peremptory dismissal of such contentions without any detailed reasoning - entire matter remanded back to the adjudicating authority for de novo consideration - appeal allowed by way of remand. Issues Involved:1. Alleged over-valuation of exported goods for availing higher benefits.2. Imposition of penalty under Section 114 (iii) of the Customs Act, 1962.3. Discrepancies in the CIU report and its impact on the adjudication process.4. Ignoring relevant documents and submissions by the appellant.5. Lack of detailed reasoning and justification in the impugned order.6. Unjustified increase in penalty amount during de novo adjudication.Issue 1: Alleged over-valuation of exported goods for availing higher benefits:The case involved M/s.Vishal Impex, accused of misdeclaring the value of exported fabrics to obtain higher Duty Entitlement Pass Book (DEPB) benefits. The Customs department alleged over-valuation based on Present Market Values (PMV) determined by the CIU report. The original authority rejected the declared value, confiscated the goods, and imposed penalties. The appellant contested the charge, highlighting discrepancies in the CIU report, and argued for acceptance of declared values. The Tribunal noted the importance of evidence in such cases and criticized the lack of detailed analysis in the impugned order. The matter was remanded for re-consideration, emphasizing the need for a fair hearing and thorough examination of all issues.Issue 2: Imposition of penalty under Section 114 (iii) of the Customs Act, 1962:The appellant challenged the penalty of Rs. 50 lakhs imposed during de novo adjudication, arguing that it was arbitrary and unjustified. They contended that the initial penalty was only Rs. 17.50 lakhs and objected to the substantial increase without proper notice. The Tribunal found the penalty enhancement lacking justification and ordered a remand for a fresh assessment, emphasizing the need for a reasoned decision and fair treatment of the appellant.Issue 3: Discrepancies in the CIU report and its impact on the adjudication process:The appellant raised concerns about the CIU report's accuracy and the lack of information provided during the adjudication. They highlighted discrepancies in the report's description of goods and the actual exported products. The Tribunal criticized the failure to provide the report to the appellant promptly, emphasizing the importance of transparency and the right to challenge evidence. The case was remanded for a fair reevaluation, stressing the need for proper consideration of all relevant factors.Issue 4: Ignoring relevant documents and submissions by the appellant:The appellant argued that crucial documents, such as supplier invoices and bank realization certificates, were disregarded during the adjudication. They contended that these documents supported their position and undermined the charge of over-valuation. The Tribunal criticized the lower authority for overlooking these submissions and ordered a fresh review to consider all relevant evidence provided by the appellant.Issue 5: Lack of detailed reasoning and justification in the impugned order:The Tribunal noted a lack of detailed analysis and reasoning in the impugned order, particularly regarding the CIU report and the penalty imposition. It criticized the peremptory dismissal of appellant's contentions without adequate discussion. Emphasizing the importance of a well-reasoned decision, the Tribunal set aside the order and remanded the case for a thorough reconsideration, urging the adjudicating authority to provide a fair hearing and detailed justification for its decisions.Issue 6: Unjustified increase in penalty amount during de novo adjudication:The Tribunal questioned the substantial increase in the penalty amount from Rs. 17.50 lakhs to Rs. 50 lakhs during de novo adjudication without proper justification. It found this enhancement arbitrary and lacking a reasonable basis. Consequently, the Tribunal allowed the appeal by way of remand, directing the adjudicating authority to reevaluate the penalty imposition with proper reasoning and consideration of all relevant factors.---