2022 (6) TMI 1093 - AT - Customs

Tribunal modifies orders on valuation & redemption, stresses legal principles & transparency in assessment

M/s. SK Enterprises Versus Commissioner of Customs (Gr. 3) Chennai II

The Tribunal set aside certain orders related to valuation and redemption, directing that goods be assessed at declared values and duty rates be applied ... Confiscation - Imposition of redemption fine and penalty - valuation of goods which are not requiring BIS certifications - Confiscation and allowing of redemption of goods to which BIS specifications are applicable, for the purposes of export. Valuation of goods which are not requiring BIS certifications and confiscation of the same and allowing to be redeemed - HELD THAT:- Valuation of the goods was made in arbitrary manner without giving any cogent reasons whatsoever. The lower authorities have also not adhered to the principles of natural justice. The revaluation of goods was done at the back of the importer. Though the original authority cursorily states that he has gone through the various the sequential Customs Rules for valuation, there is no evidence to that effect to indicate such diligent application of rules by the lower authorities. The reason for rejection of the declared value is also not brought out clearly. The value adopted was arbitrary on the basis of report claimed to have been submitted by SIIB. Thus, it is found that revaluation of goods by the lower authorities do not show any application of own mind. The careless manner in which duty is confirmed on the appellants is evident from the fact that valuation of shoes and sandals was made at Rs.85 per pair and the Notification No.1/2017 prescribes a rate of 2.5% for the shoes and sandals which are priced below Rs.500/- or the Notification No.18/2018 which prescribes a rate of 2.5% for shoes and sandals which are priced less than Rs.1000/- was not followed - For these reasons and for the reason of non-adherence to the principles of natural justice, the impugned order to the extent of revaluation of goods which are not subjected to BIS specifications cannot be sustained. Request for issuance of a detention certificate - HELD THAT:- The impugned order does not show if the appellants have made any such request to the department and the Department has disallowed the same. In the absence of any order either permitting or rejecting the issuance of detention certificate, this Tribunal cannot entertain the request of the appellants. However, from the facts and circumstances of the case, it is evident that the detention of the goods was because at the instance of the Department and subsequent proceedings initiated by the Department. Therefore, the appellants are within their right to seek detention certificate from the Department. However, this Tribunal not be a writ court cannot suo motu direct the authorities to issue a detention certificate in respect of impugned goods. It is directed that the goods shall be assessed at the value declared by the appellants and the rate of duty shall be as applicable to such goods - order is modified to the extent that after the imposition of redemption fine, the department cannot put any conditions for re-export or whatsoever else. The condition is thus set aside - Appeal allowed in part. Issues: Valuation of goods not requiring BIS certifications, Confiscation and redemption of goods requiring BIS specifications, Imposition of penaltyValuation of Goods Not Requiring BIS Certifications:The case involved the arbitrary valuation of goods without proper justification, leading to confiscation and redemption orders. The lower authorities failed to follow natural justice principles and did not provide clear reasons for rejecting the declared value. The revaluation process lacked transparency and diligence, with no evidence of adherence to Customs Rules. The valuation of shoes and sandals was incorrectly done, disregarding applicable notification rates. The Tribunal found the lower authorities' actions to be careless and not in line with legal principles.Confiscation and Redemption of Goods Requiring BIS Specifications:The Tribunal highlighted the flaws in the lower authorities' decisions regarding the valuation and confiscation of goods subject to BIS specifications. It noted that the orders passed were contrary to legal standards and the decisions of higher courts. The Tribunal ruled that goods not subject to BIS specifications should be valued at the declared amount by the appellants, with duty rates for shoes and sandals set at 2.5% as per relevant notifications.Imposition of Penalty:Regarding the imposition of penalties, the Tribunal emphasized the need for adherence to natural justice principles and legal standards. It found that the impugned orders did not withstand legal scrutiny and needed to be set aside. The Tribunal directed that goods not requiring BIS specifications should be valued as declared by the appellants, and duty rates for specific items should align with applicable notifications.Detention Certificate Issue:The appellants sought a detention certificate, but the impugned order did not address this request. The Tribunal clarified that it could not entertain the request without a specific order from the department. However, it acknowledged the appellants' right to seek a detention certificate from the concerned authority and advised them to pursue this through the proper channels.Conclusion:The Tribunal set aside certain orders related to valuation and redemption, directing that goods be assessed at declared values and duty rates be applied accordingly. It modified conditions for re-export post redemption and partially allowed the appeal with consequential relief. The judgment emphasized adherence to legal principles, transparency in valuation processes, and the importance of following established rules and notifications.