2003 (12) TMI 139 - AT - Customs

Tribunal Adjusts Fines and Penalties After Rejecting Quantity Misdeclaration and Valuation Enhancement Claims.

The Tribunal determined a misdeclaration of quantity by the appellants, rejecting their claim of an error by the supplier. However, it found no basis for ... Confiscation - Valuation (Customs) - Misdeclaration of quantity and valuation of imported copper scrap - HELD THAT:- As regards the misdeclaration about the quantity of the copper scrap, which is to the tune of 82.354 M.T. we find that the appellants have not disputed that the said quantity was more than the declared quantity. However, it is their contention that the same was sent by mistake by the foreign supplier. We do not find any merits in the above contention of the ld. adv. From records it is clear that the entire exercise of getting in touch with their foreign suppliers and raising of supplementary invoices by the foreign supplier is only after the DRI stepped into the matter and started investigations. There is no explanation by the importer as to why the foreign supplier would send such a huge quantity of goods inadvertently; as to why the foreign supplier would not come to know of the said mistake, even if committed, for a period of about a month after shipping bills; why is it that the foreign supplier realised their mistake only after start of DRI investigations in India. Accordingly we hold that there has been a misdeclaration on the part of the importer as regards the quantity of the scrap. As regards the valuation we find that the Tribunal in the case of Prabhu Dayal Prem Chand [2002 (9) TMI 226 - CEGAT, COURT NO. I, NEW DELHI] has held that transaction value of copper scrap is not to be rejected on the basis of the prices indicated in L.M.E. Bulletin when there is no corroborative evidence of contemporaneous imports on the higher price. Similarly is the other decision of the Tribunal in the case of [2001 (10) TMI 471 - CEGAT, MUMBAI], Nheva Sheva v. Sangeeta Metals India. It was observed that the London Metal Exchange prices are only indicative of the prevailing market price, but in the absence of any contemporaneous imports of identical goods reliance on LME cannot be sustained. Inasmuch as in the present case there is no other evidence for enhancement of the value we do not find any justification in doing so. Accordingly that portion of the impugned order vide which the Commissioner has enhanced the value, is set aside. Inasmuch as the appeal has been partly allowed on the point of valuation and has been partly rejected on the print of misdeclaration of quantity, we reduce the redemption fine from Rs. 15,00,000/- (rupees fifteen lakhs) to Rs. 7,00,000/- (rupees seven lakhs). Penalty imposed upon the first appellant M/s. Drunkey Exports is also reduced from Rs. 5,00,000/- (rupees five lakhs) to Rs. 2,50,000/- (rupees two lakhs fifty thousand). However, penalty imposed on Shri Rajesh Sonthalia, the second appellant is set aside in toto. Both the appeals are disposed of in above terms. Issues involved: Misdeclaration of quantity and valuation of imported copper scrap.For the issue of misdeclaration of quantity, the Tribunal found that the appellants did not dispute the excess quantity of 82.354 M.T. found during investigations. The appellants claimed the excess was sent by mistake by the supplier, but the Tribunal noted that the supplier raised additional invoices only after investigations began, indicating a deliberate act by the importer. The Tribunal rejected the appellant's plea, holding that there was a misdeclaration of quantity.Regarding the valuation issue, the Tribunal referred to previous cases where it was held that LME prices should not be followed without evidence that the transaction value is incorrect. In the absence of corroborative evidence for the enhanced value, the Tribunal set aside the Commissioner's decision to increase the valuation based on LME prices. The Tribunal found no justification for the valuation enhancement.As a result of the partial allowance and rejection of the appeal on valuation and misdeclaration of quantity, the redemption fine was reduced from Rs. 15,00,000 to Rs. 7,00,000, and the penalty on the first appellant was reduced from Rs. 5,00,000 to Rs. 2,50,000. The penalty on the second appellant was completely set aside. Both appeals were disposed of accordingly.