2026 (2) TMI 1290 - AT - Customs

Mis-declaration permits rejection and redetermination of declared assessable value; confiscation affirmed and fines reduced on proportionality grounds.

Mis-declaration of description, quantity and value permits rejection of the declared assessable value and redetermination of value; remeasurement and ... Mis-declaration of goods - rejection and redetermination of assessable value - customs valuation based on supplier's export declaration - confiscation of imported goods - redemption fine and penalties under the Customs Act - HELD THAT:- The appellant has not disputed the weight of the Gypsum Boards as given in the Trade Declaration, the value redetermined by the Revenue based on the supplier’s declaration at the time of export is accepted since the appellant has not produced any other purchase order with regard to specific quantity or value of the Gypsum Boards. Similarly, with regard to fabrics, the Revenue has taken into an account the remeasured quantity as per the directions of the Hon’ble High Court and accordingly, has redetermined the value which has been accepted by the appellant and noted by the Hon’ble High Court of Karnataka, hence the same is upheld. Accordingly, the differential duty demanded on the enhanced value stands validated. Confiscation of imported goods - redemption fine and penalties under the Customs Act - The appellant’s claim that they had ordered for 1057 pieces of Gypsum Boards and by mistake fabric was sent cannot be accepted since as rightly pointed out by the Revenue, the Bill of Entry shows the name of supplier as M/s. Panache International Ltd. while the packing list and the invoice is from Wanhang International Trade Company. The Consulate General of India, Hong Kong vide letter dated 28.05.2012 in response to the Revenue’s letter dated 08.05.2012 intimated that the declaration before the China Customs was 12000 kgs of Gypsum Boards and 22890 sq.mts. of polyester fabrics and the value declared is USD 49969.80. Hence, there is clear misdeclaration of goods as well as quantity and value. Accordingly, confiscation of goods is upheld, however, taking into consideration the above facts, the impugned order is modified only to the extent of reduction of redemption fine and penalty under Section 112(a)(ii) is reduced and all other penalties are set aside. Issues: (i) Whether the declared assessable value could be rejected and the value redetermined in view of mis-declaration of goods and quantity; (ii) Whether the goods were liable for confiscation and whether penalties and redemption fine imposed should be sustained or modified.Issue (i): Whether the declared assessable value could be rejected and the value redetermined in view of mis-declaration of goods and quantity.Analysis: The record shows declared description and quantities differed from contents actually found and accepted remeasurement established the actual quantity and nature of the imported fabrics. Supplier/export documentation including export declarations was considered for value redetermination. The declared value was not supported by reliable corroborative purchase evidence from the importer and provisional release conditions and trade declaration discrepancies were relevant to valuation.Conclusion: Declared assessable value is rejected and the value redetermined is upheld in respect of both gypsum boards and fabrics.Issue (ii): Whether the goods were liable for confiscation and whether penalties and redemption fine imposed should be sustained or modified.Analysis: The facts establish mis-declaration of description, quantity and value. Confiscation is a statutory consequence where mis-declaration is established. Penalties and redemption fine require assessment of proportionality and factual matrix. Documentary inconsistencies among shipping, invoice and supplier declarations support liability, while mitigation was appropriate in quantifying monetary sanctions.Conclusion: Confiscation of the goods is upheld. Redemption fine and penalties are modified - redemption fine reduced to Rs.3,00,000 and penalty under Section 112(a)(ii) reduced to Rs.2,00,000; all other penalties are set aside.Final Conclusion: The appeal is partly allowed only to the extent of reducing redemption fine and certain penalties; all other findings including redetermined value and confiscation are affirmed.Ratio Decidendi: Mis-declaration of description, quantity or value permits rejection of declared assessable value, redetermination of value and confiscation; monetary sanctions may be adjusted for proportionality based on documentary and measurement evidence.