TaxTMI 
TaxTMI 
2025 (1) TMI 1463
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....irst Check basis by examination order dated 31.05.2022. 100% of the imported goods were examined by shed officers, in the presence of SIIB officers and Chartered Engineer. Upon examination, the officers were of the opinion that the goods imported were mis-declared and undervalued. Accordingly, an investigation was initiated against the appellant. 2. On completion of the investigation, the appellant was called upon to show cause as to why: - a. The declared assessable value of the entire consignment of Rs. 1,98,70,080/- should not be rejected under provisions of Rule 12 of CVR, 2007 read with Section 14 of Customs Act, 1962 and should not be re-determined at Rs. 2,23,33,876 / under Rule 9 of the CVR, 2007 read with Section 14 of Customs Act, 1962; b. Undeclared goods i.e. Output Power Supply, Switching Power Supply, AC-DC converter & Delta Energy system should not be classified under CTH 85044029; c. Undeclared goods i.e. Switches should not be classified under CTH 85176990; d. Imported goods having re-determined value of Rs. 2,23,33,876/- actually found during the examination should not be confiscated under Section 111(d), 111(l) and 111 (m) of the Customs Act, 1962; e. ....
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....goods liable for confiscation under Section 111(d), 111(1) & 111(m) for reasons as discussed in the Order supra; VI. I impose a penalty of Rs.30,00,000/- (Rupees Thirty Lakhs only) under Section 114AA of the Customs Act, 1962 on M/s. Eastern Lights Industries Pvt. Ltd. (IEC-AAGCE2782G)for its act of omission or commission which had rendered the imported goods liable for confiscation under Section 111(d), 111(1) & 111(m) for reasons as discussed in the Order supra; VII. I impose a penalty of Rs.2,00,000/- (Rupees Two Lakhs only) under Section 112(a)(i) of the Customs Act, 1962 on the Customs Broker i.e. M/s India Transport & Travel Pvt. Ltd. for its act of omission or commission which had rendered the imported goods liable for confiscation under Section 111(d), 111(1) & 111(m) for reasons as discussed in the Order supra;" 2.2. On appeal, the Ld. Commissioner (Appeals) passed the impugned Order in Appeal bearing No. KOL/CUS(PORT)/KS/419/2024 dated 02.07.2024, rejecting the appeal of the appellant and upholding the Order in Original dated 26.12.2023. Being aggrieved by the impugned order, the appellant has filed this appeal. 3. The appellant submits that they have imported secon....
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....31 of the Foreign Trade Policy (FTP) as notified by the DGFT Notification No.05/2015-20, dated 07.05.2019; hence, confiscation of such imported goods is bad in law. 3.2. In support of their claim that 'Servers' are classifiable under the CTH 8417, the appellant relied upon the following decisions: (i) COMMR. OF CUS., BANGALORE Versus MICROSOFT CORPN. INDIA PVT. LTD. [2008 (224) E.L.T. 322 (Tri. - Bang.)] (ii) In COMMR. OF CUS. & C. EX., HYDERABAD-II VS. DELL INDIA PVT. LTD. [2008 (226) E.L.T. 367 (Tri. - Bang.)]. 3.3. Regarding the penalty imposed under Section 114AA of the Customs Act, 1962, the appellant submits that they have not made any misdeclaration in the Bill of Entry; that it is an admitted fact on record that the appellant has filed the Bill of Entry with correct information and the respondent has accepted such classification, which is evident from the fact recorded at paragraph 1.11. read with paragraph 22.1 of the Order in Original dated 26.12.2023. In this regard, the appellant submits that classification dispute cannot be considered as violation of Section 114AA of the Act and hence, the penalty imposed under Section 114AA of the Act is not sustainable. 3.....
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....accessories, which are restricted items as per Para 2.31 of the Foreign Trade Policy (FTP) as notified by the DGFT Notification No.05/2015-20, dated 07.05.2019. 6.1. We observe that the issues to be decides in the present appeal are as under: (i) Whether Confiscation of the imported 'server' falling under CTH 84714190 is warranted or not, on the ground that the appellant has imported restricted goods in violation of DGFT Notification No.05/2015-2020 dated 07.05.2019 read with Electronics And Information Technology Goods (Requirement for Compulsory Registration) order 2012. (ii) Whether Imposition of penalty of Rs.20,00,000/- under Section 112(a) (i) of the Customs Act, 1962 for violation of Section 111(d), 111(l) and 111(m) of the Act is justified? (iii) Whether Imposition of penalty of Rs.30,00,000/- under Section 114AA of the Customs Act, 1962 for violation of Section 111(d), 111(l) and 111(m) of the Act is justified? 7. We observe that the said consignment was assessed on First Check basis by examination order dated 31.05.2022, 100% of the imported goods were examined. The goods were examined 100% basis by shed officers in presence of SIIB officers and Chartered Engineer....
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.... is also pertinent to note that they don't have the keyboard and monitors. The Commissioner has rightly distinguished between personal computers/laptop computers and also the server. In our view, the Commissioner is correct in holding that the restriction in the Exim Policy is applicable only to computers including personal computer and laptop computer and not to server. We note that normally the servers will be the larger machines having very high memory. The processing speed also will be very high and there are various types of servers for various applications. There is no reason to exclude them from the scope of 'Capital Goods'. So, they are not stand-alone computer. In any case, the Commissioner (Appeals) has upheld the confiscation on some other ground and he has also imposed redemption fine and penalty which is the final penalty imposed or only reduced. We do not find any reason as regards the valuation adopted by the Commissioner. Revenue has also no grievance on this point. In these circumstances, no purpose would be served in restoring the original order. Hence, we dismiss the Revenue's appeal". 7.2. The same view has been held by the Tribunal, Bangalore in the case of CO....
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....eclared are items such as Output Power Supply, Switching Power Supply, AC-DC converter & Delta Energy system and Switches. We find these items are parts and accessories of the 'servers' imported by the appellant without which the 'servers' cannot function. We also find that the value of the same has already been included in the value of the 'servers' and no separate value has been paid for the parts and accessories. Thus, we do not agree with the findings of the lower authorities that the appellant has mis-declared these items. Thus, we hold that the allegation of mis declaration in the impugned order is not sustained. Accordingly, we hold that the confiscation of the goods on account of mis-declaration is not warranted. 7.5. Regarding undervaluation, we observe that the appellant has declared assessable value of the entire consignment as Rs.1,98,70,080/-. The said value declared by the appellant was rejected by the lower authorities under the provisions of Rule 12 of CVR, 2007 read with Section 14 of Customs Act, 1962 and the assessable value has been re-determined at Rs. 2,23,33,876 / under Rule 9 of the CVR, 2007 read with Section 14 of Customs Act, 1962....
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....roduced in Lok Sabha on 12-5- 2005, the Standing Committee has examined the necessity for introducing a new Section 114AA. The said Section was proposed to be introduced consequent to the detection of several cases of fraudulent exports where the exports were shown only on paper and no goods crossed the Indian border. The said Section envisages enhanced penalty of five times of the value of the goods. The Commissioner (Appeals) has analyzed the object and the purpose of this Section and has held that in view of the rationale behind the introduction of Section 114AA of the Customs Act and the fact that penalty has already been imposed under Section 112(a), the appellate authority has found that the penalty under Section 114AAis excessive and requires to be set aside. Thus, the penalty under Section 114AA is not set aside merely for the reason that penalty under Section 112(a) is imposed. After considering the ingredients of Section 114AA and the rationale behind the introduction of Section 114AA, the Commissioner (Appeals) has set aside the penalty under Section 114AA. 7. On appreciating the evidence as well as the facts presented and after hearing the submissions made by both sid....