TaxTMI 
TaxTMI 
2018 (10) TMI 1574
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed provisionally, redemption fine of Rs. 29,96,358 was imposed and further penalty of Rs. 38,29,299/- was imposed under Section 114 A of the Act and further penalty of Rs. 10,000/- was imposed under Section 114 AA of the Act. Further, the bond furnished with bank guarantee at the time of provisional release of the goods were ordered to be enforced and appropriated. Further, personal penalty was imposed on Shri Anil Alamatti, the CMD of the importing company. 2. Being aggrieved, the appellant had preferred appeal before Commissioner (Appeals), who vide the impugned order dismissed the appeals upholding the findings in the Order-in-Original. Being aggrieved, the appellants are before this Tribunal. 3. The brief facts are that appellant is a manufacturer and exporter of handmade carpets/Rugs. They had a related concern in United States under the name and style of Imperial Rugs. The appellant had exported carpets sometime in the year 2007 to be the said Imperial Rugs - USA for the purpose of sale, business of renting. Subsequently, due to adverse business conditions, the appellant decided to close its operations in the USA and decided to re-import the stock lying with them at Imperia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....consignment at JNCH and that one more consignment of carpet was pending customs clearance at ICD Mandideep, for which a bill of which was filed in 2015. That all the carpets imported were of Indian origin. He further stated that all the carpets imported were not exported by them. The carpets are imported back to India as they wanted to close down the business in USA. The lot of carpets imported included the carpets returned by the customers, who had taken them on credit from Imperial Rugs, USA. He also informed that from the earlier consignment imported at JNCH, samples were tested at the Textile Committee, Mumbai and clearance was allowed subject to payment of fine and penalty. On being asked as to why he mentioned the country of origin as USA., which amounts to misdeclaration, he stated that he wanted to hide the fact that the carpets are old and admitted his mistake and undertook to rectify the mistakes. 5. That another bill of entry no.3470916 was filed on 11.05.2011 for the other pending consignment. The appellant had requested for examination on first check basis and the same was examined in the month of June, 2011. As per the records, some of the carpets were found to have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... produced evidence that 101 bales of carpet were exported by them in the year 2007 and accordingly, prayed for granting benefit of notification no.94/96 - cus, as applicable, wherein the said notification provides, "exemption of import duty on reimport of goods exported under duty drawback regulations or under bond. The said notification also provides that the reimport should have been within a period of three years from their export. The goods should be the same, which were exported. The said notification was found to be not applicable under the facts and circumstances of the case, after a period of three years and it was not possible to identify the imported goods with the goods exported originally. 7. It further appeared to Revenue that the appellants did not inform the customs that the transaction is between the related parties and that the carpets were of Indian origin. Further, the carpets were found to be of Indian origin and also appeared to be undervalued on the basis of the export invoices submitted along with shipping bill no. 462/DBK/2007 dated 12.04.2007 for the export of handmade carpets, which were found valued in the range of USD 2.00 to USD 10.00 per square feet F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ations leveled in the show cause notice and confirmed the differential duty demand of Rs. 38,29,299/- with equivalent penalty. She had also imposed a redemption fine of Rs. 29,96,358/- under the provisions of Section 125 of the Customs Act, 1962. She further imposed penalty of Rs. 10,000/- under Section 114 A of the Customs Act, 1962. The aforesaid order had been challenged by the appellant before the learned Commissioner (Appeals), wherein the learned Commissioner (Appeals) has rejected the appeal of the appellants. Against the said impugned order dated 31.08.2017, the appellants are before this Tribunal. 9. The learned Counsel for the appellants submitted that the impugned order is liable to be set aside by making the following submissions:- 9.1 The entire case of the Department in sofar as Bill of Entry dated 24.02.2011 is concerned, rests on the solitary fact that Country of Origin declared by the Appellant as USA is mis-declaration. In this regard, it is submitted that the Country of Origin has been entered as USA under the belief that "Country of Origin" means the place from where the goods are being imported from i.e. from where the goods originate/start their journey. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the ground that appellant has mis-declared the country of origin and the quantity of goods. It has also been stated that exporter is related person. In this regard, firstly, it is relevant to state that, as stated above, there is no mis-declaration on both counts and therefore Rule 12 (2)(iii)(d) of the Customs Valuation Rule has no application. Secondly, the fact that the parties are related by itself is not enough to reject the transaction value. There is absolutely no evidence that the relationship has influenced the price. On the contrary, the Customs at JNCH, Raigad has accepted the value of the identical goods vide „First‟ Bill of Entry. Thus the transaction value could not have been rejected in view of Rule 3(3)(a) of the Customs Valuation Rules. 9.5 Without prejudice, the appellant humbly submits that the method adopted by the department to value the goods is incorrect and illegal. Department has taken the mean price of the carpets exported by the appellant in the year 2007 and after providing for 10% depreciation for 3 years i.e. 30% has arrived at the value. It is humbly submitted that said valuation has been done by applying Rule 9 of the Customs Valuation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re not included in the bill of entry made under this Act. In the present case, as stated above there is no mis-declaration nor the value declared was incorrect. Thus the goods were not liable for confiscation and thus no question of payment of redemption fine arises. In any case the redemption fine imposed is on the higher side as it is twice the value of goods declared, which is the true value of carpets imported. 9.9. That according to the humble submission of the appellant no penalty under Section 114 A could be imposed on the appellant company and Shri L R Maurya. Firstly, penalty cannot be imposed on the company and CMD together. Secondly no ground exits for imposition of penalty. It is urged that error in declaration of country of origin is a technical error and no penalty can be imposed. Certainly it was not with an intent to evade the payment of duty. Misdeclaration of the country of origin being the only reason for rejecting the transaction value, the penalty cannot be imposed. Similarly, no penalty is imposable under Section 114 AA of the Act. 9.10 Thus, the impugned order is liable to be set aside with consequential relief. 10. The learned AR appearing on behalf of th....