TaxTMI 
TaxTMI 
2026 (8) TMI 169
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....e, China and had filed the Bill of Entry (B/E) No. 7458279 dated 16.04.2020 by classifying the goods under Customs Tariff Item (CTI) 6115 1000 and declared the value of goods as USD 20,350/- CIF (Unit price of 2.50 per dozen). 2.3 Based on the intelligence gathered by Nhava Sheva Preventive Unit (NSPU) of the Customs Preventive Commissionerate and on a reasonable belief that the said goods were under-valued and mis-declared to evade customs duty, the imported goods were subjected to 100% examination. During such examination conducted by the NSPU Customs Officers under Panchanama proceedings dated 04.05.2020, it was found that the quantity of imported goods was in excess i.e., it was of 10979.08 dozen (1,31,749 nos.), instead of declared quantity of 8140 dozen (97,680 nos.). Therefore, the department had seized the said imported goods vide Seizure Memo dated 19.05.2020. Further proceedings were taken by the department in issuance of Show Cause Notice (SCN) dated 21.05.2020 proposing for re-determination of assessable value of goods at Rs.30,17,710/- i.e., on account of revised/ enhanced unit price of goods at USD3.60/-per dozen for the declared quantity at Rs.22,37,360/- and for ....
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.... goods viz., readymade garments (polyester knitted) - Ladies Leggings, based on the invoice and packing list provided by their supplier M/s Yiwu Lingna Clothing Company Limited, China. They had no intention to evade the customs duty and thus upon identification of mis-match/excess quantity of the goods and on the decision of customs officers assessing the goods in enhancing the assessable value of the goods, they had paid the differential duty of Rs.2,19,278/- as well as the penalties of Rs.32,982/- and Rs.10,000/- vide Demand drafts No. 023845, 023846 &, 023844 all dated 27.05.2020, respectively, by paying it to the government exchequer vide Challan Nos. HC 81, HCM 939 & HCM 940 all dated 29.05.2020 of the Nhava Sheva Customs House. 3.2 He further submitted that since the appellant had given a letter dated 11.05.2020 to the department accepting to pay the differential duty on account of enhancement of value by the customs assessing officers and had also paid the differential duty along with penalty of 15% of differential duty, before clearance of the goods, as per Section 28(5) of the Customs Act, 1962, the original authority had rightly held that the proceedings were completed....
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.... "7. I have carefully gone through the facts of the case, records available in file and I proceed to decide the case as below. (i) I find that the goods covered under Bill of Entry No.7458279 dated 16.04.2020 has mis-declared in terms of quantity to evade legitimate Customs duty, the said goods are liable for confiscation under Section 111(1) and 111(m) of the Customs Act, 1962 and for such act of omission and commission, the importer has rendered himself liable for penalty under Section 112(a) of the Customs Act, 1962. (ii) 1 find that the re-determine assessable value of the impugned goods as Rs. 30,17,710/- (Rupees Thirty Lakh Seventeen Thousand Seven Hundred and Ten Only) and the differentiate duty as Rs. 2,19,278/- (Rupees Two Lakh Nineteen Thousand Two Hundred Seventy-Eight Only). (iii) I find that the goods have been seized on 19.05.2020, under Sec. 110 of the Customs Act, 1962, as the goods appeared to be liable for confiscation under Sec 111(1) and 111(m) of the Customs Act, 1962. However, since the importer is ready to pay the differential duty, interest and Penalty, I find that the proceedings need to be concluded under See 28(6)(1) of the Cu....
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..... RKPS Impex Private Limited under Section 28 (6)(i) read with Section 28 (5) of the Customs Act, 1962. However, since the Importer has already paid the said amount, the same is being appropriated against the demand of duty mentioned herein. (v) I impose Penalty of Rs. 10,000/- (Rupees Ten Thousand Only) on the importer. M/s. RKPS Impex Private Limited improper importation of goods under Section 112 (a) (ii) of the Customs Act, 1962. However, since the Importer has already paid the said amount, the same is being appropriated against the demand of duty mentioned herein." 8.2 In the appeal filed against the order of the original authority, the learned Commissioner (Appeals) has held as under: "6........Thus, I find that for applicability of Section 28(5), demand notice under Section 28(4) has to be served by the proper officer. As already discussed in para 6.1 above, Section 28 is not applicable in the present case being live consignment. Thus, I find that penalty of Rs.32,892/- under Section 28(6)(i) read with Section 28(5) of the Customs Act, 1962 as imposed by the Adjudicating Authority, is not applicable in this case keeping in view that Section 28(6) is conc....
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.... order to impose redemption fine of Rs.3,00,000/- under Section 125 of the Customs Act, 1962; c) I order to drop the penalty of Rs.32,892/- imposed under Section 28(6)(i) read with section 28(5) of the Customs Act, 1962. d) I uphold the penalty imposed on the Respondent under section 112(a)(ii) of the Customs Act, 1962. Under the circumstances, the appeal is disposed off accordingly by way of modifying impugned order as detailed supra, in terms of section 128A(3)(a) ibid as per doctrine of modification." 9.1 Before I consider the issues under dispute along with the submissions made by both sides, it is important to note that the undisputed facts with respect to the factual matrix of the case are as follows: (i) the appellant importer had imported 'Readymade Garments (Polyester Knitted) - Ladies Leggings' from overseas supplier M/s Yiwu Lingna Clothing Company Limited, China and there is no misdeclaration with respect to the nature and description of the goods; (ii) the foreign supplier had also mentioned the quantity of the imported goods in the invoice No.RKT-141 dated 21.01.2020 as 8140 dozen and in the Packing List No. RKT-141 date....
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....r delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where- (a) the seller and the buyer have no interest in the business of each other; or (b) one of them has no interest in the business of the other, and the price is the sole consideration for the sale or offer for sale : Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill or bill of export, as the case may be, is presented under section 50. (1A) Subject to the provisions of sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf..... xxx xxx xxx xxx" Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 Rule 2. Definitions (1) In these rules, unless the context otherwise requires, - xxx xxx xxx xxx (b) "goods of the same class or kind", means imported goods that are within a group or range of imported goods produced by a particular industry or ....
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.... be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules. (2) The transaction value of imported goods under sub-rule (1) above shall be accepted; Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs pu....
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.... readymade garments-ladies leggings. However, there is no evidence of any record or document to show that the appellant importer has ordered for 1,31,749 nos./10979.08 dozen readymade garments and they tried to suppress the excess quantity by declaring only 8140 dozen /97,680 nos. of readymade garments. Furthermore, there is apparent contradiction in assessing the value of impugned goods, as the comparable price as per B/E No.6528256 dated 18.01.2020 is stated as USD 3.38 per dozen, whereas the value of USD 3.60/- per dozen was adopted on the basis of assessment practice at JNCH and there was no specific comparable contemporaneous import value as per NIDB data base. Therefore, part of the imported consignment being as per declaration and rest of the same being in excess quantity as well as the varying contemporaneous values on the basis of NIDB data, which is alleged to be mis-declaration by the department for the reason it being in excess and undervalued alone, in my considered view, does not enable the imported goods as mis-declared for the purpose of Section 111(l) & 111(m) ibid and for imposition of redemption fine on the goods and penalty on the appellant importer. 9.5 Furt....