2023 (2) TMI 550 - AT - Customs

Tribunal upholds rejection of assessable value, confiscation, and penalty based on goods being 'restricted'

Aggarwal Traders Versus Commissioner of Customs, TKD New Delhi

The Tribunal dismissed the appeal, affirming the rejection and re-determination of the declared assessable value, confiscation of goods, and imposition of ... Valuation of imported goods - rejection of declared value, and redetermination of the same - declared price of the goods, below the Minimum Import Price - violation of Policy Condition No. 1 of the ITC(HS) Import Policy which prescribed that the specified defective items can be imported free, except those for which the CIF value of imports was below the value specified for the said items - confiscation - redemption fine - penalty - HELD THAT:- In the present case, the proper officer doubted the value of the goods declared by the appellant since it was below the Minimum Import Price and sent a letter dated 09.09.2020 to the appellant. The appellant, in response to the aforesaid communication, categorically stated that the issuance of show cause notice may be waived and personal hearing may also not be given. The appellant also stated that it was the first mistake and it was not aware of the policy restriction. The appellant also categorically stated that it was ready to pay the duty amount as per the assessment value of the goods, which the appellant believed was usually on the higher side than the minimum value. Section 124 of the Customs Act does provide for issuance of a show cause notice and personal hearing but in view of the specific request made by the appellant, show cause notice was not issued and personal hearing was also not granted. The assessing officer, after rejecting the value declared by the appellant in the Bills of Entry, reassessed the value of goods. The appellant paid the enhanced value without raising any objection or protest at the time of clearing of the goods. Thereafter, an appeal was filed to assail the order passed by the Additional Commissioner. It is correct that the Assistant Commissioner could not have determined the assessable value in an arbitrary manner even if the importer had submitted in writing that it would pay the duty amount as per the assessment, but it is seen from the order passed by the Assistant Commissioner that contemporaneous datas were examined. During the course of hearing of the appeal, learned counsel for the appellant also placed certain Bills of Entry relating to identical goods submitted by the appellant. It is seen from one such Bill of Entry No. 7462561 dated 16.04.2020, that the appellant accepted the transaction value of misprint sheets as Euro 495, which would come to 600 Dollars, whereas in the present case the value has been fixed at only Euro 470.5 per MTS. It cannot, therefore, be urged that the assessable value was determined by the Assistant Commissioner in an arbitrary manner on a higher side. The Additional Commissioner has noted that as the importer had tried to import the restricted goods in violation of the provisions of the ITC(HS) Import Policy and the value had not been correctly declared, the goods were liable to confiscation. There is, therefore, no error in the order - As the goods were held to be liable to confiscation under section 111 of the Customs Act, penalty under section 112(a) of the Customs Act has been correctly imposed. There is, therefore, no error in the order passed by the Commissioner (Appeals) - Appeal dismissed. Issues Involved:1. Rejection and re-determination of declared assessable value.2. Confiscation of goods under sections 111(m) and 111(o) of the Customs Act.3. Imposition of penalty under section 112(a)(i) of the Customs Act.4. Violation of natural justice and procedural fairness.5. Compliance with Minimum Import Price (MIP) under Import Policy.Detailed Analysis:1. Rejection and Re-determination of Declared Assessable Value:The appellant filed three Bills of Entry for clearance of goods described as 'Defective Tinplate Coil and Defective Tinplate Misprint Sheets' under CTH 7210 12 90. The declared unit price was below the Minimum Import Price (MIP), violating Policy Condition No. 1 of the ITC(HS) Import Policy. The Special Investigation Intelligence Branch (SIIB) investigated and found the declared price below the MIP, making the goods 'restricted.' The Additional Commissioner re-determined the assessable value based on contemporaneous import data, setting it higher than the declared value. The Commissioner (Appeals) upheld this re-determination, noting it was based on contemporaneous data and similar cases, rejecting the appellant's claim that other importers were importing at lower prices without evidence.2. Confiscation of Goods under Sections 111(m) and 111(o) of the Customs Act:The goods were liable for confiscation under section 111(m) due to misdeclaration of value and under section 111(o) for violating the Import Policy by declaring a value below the MIP. The Additional Commissioner ordered confiscation with an option to redeem the goods on payment of a redemption fine. The Commissioner (Appeals) confirmed this, stating the goods were rightly confiscated as 'restricted' due to the declared unit price being below the MIP.3. Imposition of Penalty under Section 112(a)(i) of the Customs Act:A penalty was imposed on the appellant under section 112(a)(i) for improper importation, as the goods were liable to confiscation under section 111. The Commissioner (Appeals) found the penalty commensurate with the facts of the case and upheld the imposition.4. Violation of Natural Justice and Procedural Fairness:The appellant argued that the waiver of show cause notice and personal hearing violated natural justice. However, the Commissioner (Appeals) noted that the appellant had explicitly requested the waiver in writing, making the plea of violation of natural justice unsustainable. The adjudicating authority acted in accordance with the appellant's request, and the order was passed without procedural unfairness.5. Compliance with Minimum Import Price (MIP) under Import Policy:The declared unit price of the goods was below the MIP of USD 465 per tonne, rendering the goods 'restricted' and in violation of the Import Policy. The Commissioner (Appeals) upheld the rejection of the declared value and re-determination based on contemporaneous data, finding no infirmity in the process. The appellant's claim of other importers importing at lower prices was unsupported by evidence.Conclusion:The appeal was dismissed, with the Tribunal affirming the rejection and re-determination of the declared assessable value, confiscation of goods, and imposition of penalty. The Tribunal found no procedural unfairness or violation of natural justice, as the appellant had waived the right to a show cause notice and personal hearing. The re-determination of value was based on contemporaneous data, and the goods were correctly classified as 'restricted' under the Import Policy.