2018 (9) TMI 50 - AT - Customs

Tribunal overturns fine for undervaluation of imported goods, citing lack of evidence.

The tribunal set aside the redemption fine and penalty imposed on the appellant for undervaluation of imported Aluminium Scrap, ruling in favor of the ... Valuation of imported goods - rejection of transaction value - Imposition of Redemption Fine and penalty - Held that:- Department has rejected the transaction value on the basis of the Chartered Engineer’s report, who admits that the goods imported by appellant are only scrap but scrap was in the kind of ‘Tread’, ‘Taste’, and ‘Troma/Trump’ etc. and on that basis valuation of the goods have been arrived on the basis of contemporaneous import. As nothing has been brought on record, how the examination was done by the Chartered Engineer to find out how much is the quantity of ‘Tread’, ‘Taste’ and ‘Troma/Trump’ are not scrap. In that circumstances the findings of the Chartered Engineer with regard to the valuation of the goods is not acceptable in the absence of any market survey - redemption fine and penalty is not imposable upon the appellant - appeal allowed - decided in favor of appellant. Issues:Challenge on redemption fine and penalty imposed upon the appellant for undervaluation of imported Aluminium Scrap.Analysis:The appellant imported Aluminium Scrap but it was found to be a mixture of various types of scrap by a Chartered Engineer. The appellant did not dispute the valuation aspect but argued that since they declared the goods as Aluminium Scrap, there was no mis-declaration, hence no redemption fine or penalty should be imposed. The Revenue, however, supported the findings of the impugned order.Upon hearing both parties, the tribunal observed that the department rejected the transaction value based on the Chartered Engineer's report, which classified the scrap as 'Tread', 'Taste', and 'Troma/Trump'. The tribunal noted that there was no evidence on record regarding the examination process by the Chartered Engineer to determine the quantity of non-scrap components. As a result, the tribunal found the Chartered Engineer's valuation unacceptable due to the lack of market survey data. Consequently, the tribunal held that redemption fine and penalty were not justified, but confirmed the duty demand as the valuation was not disputed by the appellant on technical grounds.In conclusion, the tribunal set aside the impugned order regarding the redemption fine and penalty, ruling in favor of the appellant. The appeal was disposed of accordingly.