2019 (10) TMI 3 - AT - Customs

Tribunal overturns duty demand, confiscation, and penalties due to failure to reject transaction value upfront.

The Tribunal allowed the appeal, setting aside the enhancement of assessable value, leading to the dismissal of duty demand, confiscation of goods, and ... Valuation of imported goods - copper scrap & heavy melting scrap - rejection of assessable value - HELD THAT:- The goods were purchased by the appellant on high sea sale basis. Even as per the report of Charter Accountant, the goods were nothing but metal scrap with some of the scrap item of the aluminium. The lower authority has enhanced the value based upon the value of metal as reflected in LME prices, without rejecting the transaction value. There is no evidence on record that the transaction value paid by the appellant to the foreign exporter is incorrect and some more consideration stands paid to them. An identical issue was considered by the Tribunal in the case of M/S R.K.G. INTERNATIONAL PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE [M/S R.K.G. INTERNATIONAL PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE [2019 (4) TMI 1759 - CESTAT ALLAHABAD]] and by taking note of Hon’ble Supreme Court’s decision in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, NOIDA VERSUS M/S. SANJIVANI NON-FERROUS TRADING PVT. LTD. [2018 (12) TMI 738 - SUPREME COURT], enhancement of value was set aside. There are no reasons to uphold the enhancement - the demand of duty as also confiscation of goods and imposition of penalty is set aside - appeal allowed - decided in favor of appellant. Issues: Mis-declaration of goods, rejection of assessable value, confiscation of goods, imposition of penaltiesThe judgment pertains to a case where the appellant filed a Bill of Entry declaring imported goods as 'copper scrap & heavy melting scrap.' The goods were examined, and a chartered engineer's report revealed the composition of the scrap, including copper and aluminum content. Subsequently, proceedings were initiated against the appellant for mis-declaration, leading to an increase in the assessable value. The Original Adjudicating Authority upheld the charge of mis-declaration, increased the assessable value, confiscated the goods, and imposed penalties. The appeal against this decision was unsuccessful before the Commissioner (Appeals), leading to the present appeal.Upon review, the Tribunal noted that the goods were purchased on a high sea sale basis and were primarily metal scrap. The lower authority had enhanced the value based on LME prices without rejecting the transaction value. The Tribunal referred to a previous case and a Supreme Court decision emphasizing the need for revenue to first reject the transaction value and provide evidence of its inaccuracy before resorting to alternative valuation methods. As the transaction value was not rejected in the present case, the Tribunal set aside the enhancement, leading to the dismissal of the duty demand, confiscation of goods, and penalties. The appeal was allowed, providing consequential relief to the appellant.