2021 (11) TMI 623 - AT - Customs

Tribunal overturns Customs Act penalties, citing lack of evidence.

M/s. Trading Syndicate Proprietor – Shri Mohinder Goel Versus Commissioner of Customs (Port), Kolkata

M/s. Trading Syndicate Proprietor – Shri Mohinder Goel Versus Commissioner of Customs (Port), Kolkata - TMI Issues:1. Undervaluation of imported goods2. Confiscation under Section 111(m) of the Customs Act, 19623. Assessment of Bill of Entry4. Methodology for determination of value5. Appeal against assessment order6. Sequential application of Customs Valuation Rules7. Allegation of under-valuation against importer8. Confiscation of goods and imposition of penaltiesDetailed Analysis:1. The case involved the appellant engaged in imports and exports, specifically importing 'Ball Valves' made of metal like Zinc and Brass. A Show Cause Notice was issued alleging undervaluation of the imported goods, leading to the rejection of the declared assessable value and the acceptance of the re-determined assessable value. The goods were held liable for confiscation under Section 111(m) of the Customs Act, 1962, with penalties imposed on both the trading syndicate and the proprietor. The appeal was made to the Tribunal after the Commissioner(Appeals) upheld the Order-in-Original.2. The appellant's advocate argued against the reliance on co-appellants' statements, stating that the methodology for arriving at the enhanced value based on presumed material composition percentages was legally unsustainable. It was contended that the assessment of a Bill of Entry is final unless appealed, and the value enhancement based on a proforma invoice was not valid without evidence of extra payment. The advocate emphasized the sequential application of Customs Valuation Rules and cited a Tribunal decision to support the appeal.3. The Department's representative highlighted discrepancies observed during the investigation, alleging evasion by the importer. The Tribunal heard both sides and examined the appeal records, noting the importation of Ball Valves and Bibcock through Kolkata Port and the subsequent search and seizure by the DRI, Mumbai. The differential Customs Duty was demanded based on a proforma invoice, leading to proposed confiscation and penalties under various sections of the Customs Act, 1962.4. The Tribunal found that the appellant's goods were cleared for home consumption after being assessed by the Proper Officer, with the proforma invoice showing a different price not issued in the appellant's name. The lack of evidence of extra payment and the absence of challenge to the assessable value led to the Tribunal's decision in favor of the appellant. The judgment referenced a Supreme Court case to support the appellant's position.5. Ultimately, the Tribunal concluded that there were insufficient grounds for enhancing the assessable value, leading to the allowance of the appeal and the rejection of the confiscation of goods and imposition of penalties. The decision was pronounced in open court on 16 November 2021.