Tribunal affirms penalties on importer for mis-declaration of goods, quantity, and related party status.

The tribunal upheld the impugned order, rejecting all three appeals and affirming the reassessment of the value, confiscation of goods, and imposition of penalties on the importer and its directors for mis-declaration of quantity, related party status, and mis-declared grade of guar gum.

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Issues Involved:
1. Mis-declaration of the quantity of imported goods.
2. Relationship between the importer and the overseas supplier.
3. Grade of the imported guar gum.
4. Valuation of the imported goods.
5. Imposition of penalties on the directors.

Summary:

1. Mis-declaration of Quantity:
The appellant, M/s. Nanz Med Science Pharma Pvt. Ltd. (Nanz), imported guar gum and declared a quantity of 32,580 kg. However, the actual quantity imported was found to be 34,260 kg, resulting in an excess of 1,680 kg. This mis-declaration was not disputed by the appellant.

2. Relationship Between Importer and Supplier:
The appellant initially declared that the overseas supplier and itself were not related buyers. However, upon investigation, it was found that they were related parties as per Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. This relationship was also not disputed by the appellant.

3. Grade of Imported Guar Gum:
The appellant declared the guar gum as not of food grade or pharma grade. Samples tested by the Central Revenue Control Laboratory (CRCL) and AES Laboratories (AES) confirmed that the guar gum was of food grade. The appellant presented a contradictory report from Balaji Test Lab, but the tribunal found the AES report more credible due to procedural integrity in sample collection and testing.

4. Valuation of Imported Goods:
The declared value of the guar gum was Rs. 19.264 per kg, significantly lower than the contemporaneous import price of Rs. 424.95 per kg. The tribunal upheld the rejection of the transaction value and re-assessed the value based on contemporaneous imports data from the National Import Data Base (NIDB), given the mis-declaration of quantity, related party status, and mis-declared grade of the guar gum.

5. Imposition of Penalties:
Penalties were imposed on Nanz and its directors, Shri Manmit Singh Malhotra and Shri Lakhvinder Pal Singh Puri, under Sections 112(a)(ii) and 114AA of the Customs Act, 1962, for their involvement in the mis-declarations. The tribunal found the penalties justified given their roles in the violations.

Conclusion:
The tribunal upheld the impugned order, rejecting all three appeals and affirming the reassessment of the value, confiscation of goods, and imposition of penalties. The order was pronounced on 18/04/2023.

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