Custom, Excise & Service Tax Tribunal
Sunlight Overseas vs Commissioner, Customs-New Delhi(Icd ... on 20 September, 2023
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH, COURT NO. 1
CUSTOMS APPEAL NO. 52804 OF 2019
[Arising out of Order-in-Appeal No. CC (A) CUS/D-II-ICD-TKD-605 TO
608/19-20 dated 28.08.2019 passed by the Commissioner of Customs
(Appeals), New Delhi]
M/S SUNLIGHT OVERSEAS Appellant
1/73, WHS Kirti Nagar, New Delhi
Vs.
COMMISSIONER, CUSTOMS- (ICD Respondent
TKD)(IMPORTS) NEW DELHI
Commissioner of Customs, Import
Commissionerate, ICD, Tughlakabad,
New Delhi
WITH
CUSTOMS APPEAL NO. 52805 OF 2019
[Arising out of Order-in-Appeal No. CC (A) CUS/D-II-ICD-TKD-605 TO
608/19-20 dated 28.08.2019 passed by the Commissioner of Customs
(Appeals), New Delhi]
M/S SUNLIGHT OVERSEAS Appellant
1/73, WHS Kirti Nagar, New Delhi
Vs.
COMMISSIONER, CUSTOMS- (ICD Respondent
TKD)(IMPORTS) NEW DELHI
Commissioner of Customs, Import
Commissionerate, ICD, Tughlakabad,
New Delhi
WITH
CUSTOMS APPEAL NO. 52806 OF 2019
[Arising out of Order-in-Appeal No. CC (A) CUS/D-II-ICD-TKD-605 TO
608/19-20 dated 28.08.2019 passed by the Commissioner of Customs
(Appeals), New Delhi]
M/S SUNLIGHT OVERSEAS Appellant
1/73, WHS Kirti Nagar, New Delhi
2
Vs.
COMMISSIONER, CUSTOMS- (ICD Respondent
TKD)(IMPORTS) NEW DELHI
Commissioner of Customs, Import
Commissionerate, ICD, Tughlakabad,
New Delhi
AND
CUSTOMS APPEAL NO. 52807 OF 2019
[Arising out of Order-in-Appeal No. CC (A) CUS/D-II-ICD-TKD-605 TO
608/19-20 dated 28.08.2019 passed by the Commissioner of Customs
(Appeals), New Delhi]
M/S SUNLIGHT OVERSEAS Appellant
1/73, WHS Kirti Nagar, New Delhi
Vs.
COMMISSIONER, CUSTOMS- (ICD Respondent
TKD)(IMPORTS) NEW DELHI
Commissioner of Customs, Import
Commissionerate, ICD, Tughlakabad,
New Delhi
Appearance:
Ms. Anjali Gupta with Shri Rajatdeep Sharma, Advocates for the
Appellant
Shri Rajesh Singh, Authorized Representative of the Department
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL )
FINAL ORDER NOS. 51328-51331 /2023
Date of Hearing : 21/08/2023
Date of Decision: 20/09/2023
P V SUBBA RAO:
1. M/s. Sunlight Overseas filed these four appeals to assail
the Order in Appeal1 dated 28.8.2019 passed by the
Commissioner of Customs (Appeals) Delhi whereby he rejected
1 Impugned order
3
the appellant's appeals and upheld two orders in original 2 dated
13.1.2017 and two Orders in original dated 8.2.2022 passed by
the Joint Commissioner.
2. The appellant had filed four Bills of Entry No. 7732792
dated 05.12.2017, 7831426 dated 15.12.2016, 8216202 dated
17.01.2017 & 8216204 dated 17.01.2017 self-assessing the duty
in the Indian Customs Electronic Data Interface System 3to clear
imported "Misc. Furniture of Different Types etc" imported from
M/s Hong Kong Overseas, China. The details of consignments are
as under
S.No B/E No. B/L No. Declared Weight Differenc
weight found e (kg)
(kg) (kg)
1 8216204/1 9582375650/ 15760 24090 8330
7.01.2017 9.11.16
2 7831426/ CGZ0755773/ 15630 23510 7880
15.12.2016 03.11.16
3 7732792/ 958149486/0 15650 24590 8940
05.12.2017 1.11.16
4 8216202 GGZ0753599/ 15760 26720 10960
/17.01.2017 27.10.16
3. Receiving specific intelligence that the quantity of the
goods was mis-declared in these four Bills of Entry, the
Directorate of Revenue Intelligence4 placed an alert, acting on
which, the assessing officer ordered first check examination, i.e.,
directed the goods to be examined first before assessing the Bills
of Entry. It was specifically indicated that the weight of the goods
must be checked. Examination of the goods revealed mis-
2 OIO
3 ICES
4 DRI
4
declaration of the quantity of the goods in terms of weight as
indicated above.
4. Through its Customs Broker, the appellant submitted
letters dated 23.12.2016 and 02.02.2017 stating that it did not
want any show cause notice or personal hearing in the matter
and that it was ready to pay re-determined Customs duty as well
as fine and penalty.
5. Accordingly, the Joint Commissioner, Inland Container
Depot, Tughlakabad, passed OIOs rejecting the transaction value
under Rule 12 of the Customs Valuation(Determination of Value
of imported goods) Rules, 20075and re-determining the value on
the basis of contemporaneous imports of similar goods under
Valuation Rule 5. He demanded the differential duty, confiscated
the goods under section 111(l) and 111 (m) for mis-declaration,
allowed their redemption on payment of fine under Section 125
and imposed penalties. The details of the duty fine and penalties
in the OIOs were as follows.
Bill of Entry Value of Duty Redemption Penalty
goods assessed fine (Rs.) (Rs.)
confiscated (Rs.)
(Rs.)
7831426 dated 17,16,230 5,05,275 4,00,000 2,00,000
15.12.2016
8216204 dated 15,66,312 7,02,141 5,00,000 3,00,000
17.1.2017
7732792 dated 10,76,361 5,06,768 4,00,000 2,00,000
7.12.2016
8216202 dated 15,17,826 7,55,197 5,00,000 3,00,000
17.1.2017
5 Valuation Rules
5
6. On appeal, the Commissioner (Appeals) passed the
impugned order upholding the four OIOs passed by the Joint
Commissioner.
7. Aggrieved, the appellant filed this appeal. We have heard
learned counsel for the appellant and the learned authorised
representative for the Revenue and perused the records. The four
questions to be answered in these four appeals are:
(a) Can the rejection of the declared transaction value and re-
determination of the duty by the original authority and its
affirmation in the impugned order be sustained?
(b) Can the confiscation of the imported goods in the four Bills
of Entry under section 111(l) and (m) on the ground of
mis-declaration of the quantity and their release on
payment of redemption fine be sustained?
(c) If the confiscation of the goods is sustained, are the
amounts of redemption fine imposed correct or excessive?
(d) Are the amounts of penalty imposed under section 112
correct or excessive?
Rejection of transaction value under Rule 12 of the
Valuation Rules and its re-determination under Rule
based on the NIDB data
8. Learned counsel for the appellant submitted as follows:
(a) the imported goods were furniture which are not traded by
weight but by number;
(b) the appellants had themselves approached the customs
authorities for first check, i.e., requested the authorities to
6
first examine the goods and so it cannot be alleged that
there was mis-declaration or suppression of the description
or weight of the imported goods;
(c) the Customs authorities failed to verify if the number of
pieces imported were the same as in the invoice, which
was possible even though the imported goods were in
semi-knocked down (SKD) condition;
(d) the allegation of mis-declaration therefore fails and any
excess weight found during examination does not change
the value declared by the appellant;
(e) it was wrong on the part of the assessing officer to reject
the transaction value under Rule 12; for this purpose they
place reliance on:
(i) Abhiman Impex vs CC (Import) Nhava Sheva6
(ii) Nilkamal Ltd. vs Commissioner of Customs (Import)
Nhava Sheva7
(f) since the appellant had filed the Bills of entry as per the
invoices and other documents, no mis-declaration can be
alleged on its part and they place reliance on:
Scorpian International vs CC8
CC Excise vs Akshay Aluminum Alloys Pvt Ltd.9
(g) there is no evidence of any undeclared flow-back to the
exporter or any evidence of underhand payment and
therefore, there is no reason to discard the transaction
value;
6 2019 (369) ELT 1255 (Tri-Mum)
7 2019 (370) ELT 923 (Tri-Mum)
8 2017 (357) ELT 1093 (T)
9 2018 (364) ELT 170 (T)
7
(h) the appellant was forced to apply for waiver of show cause
notice as they had suffered huge warehousing & shipping
line demurrages and could not afford to continue the goods
in custom warehouse and wanted to avoid these damages;
(i) the assessment was done on the basis of the weight
reflected in the weighment slip issued by the CONCOR
which is against the statute;
(j) the decision of this Tribunal in Final Order dated
20.10.2020 in the case of Hanuman Prasad & Sons is
not applicable to this case because in that case, the
importer accepted the enhancement and in this case, there
was no acceptance of undervaluation by the appellant; the
values of the contemporaneous imports under NIDB were
not shown by the proper officer;
(k) the very act of filing of an appeal against an order imposing
customs duty is a protest against the duty assessed as held
in
(i) Principal Commissioner of Customs vs Cisco
Systems India Pvt. Ltd.10
(ii) Mafatlal Industries vs Union of India11
(iii) Mohan Textile Mills vs Commissioner12
(iv) Commissioner of Customs vs Ganesh Trading
Company13
(v) Bayshore Glass Trading Pvt. Ltd. vs CC Kolkata14
(vi) S&H Gears Pvt. Ltd. vs Commissioner15
10 2023 (384) ELT 165 (Del.)
11 1997 (89) ELT 247 (SC)
12 2018(363) ELT 536 (Tri-Chan.)
13 2013 (297) ELT 75 (Tri-Del)
14 2002 (148) ELT 1243 (Tri-Kol)
8
(l) in UOI vs Kamlakshi Finance Corporation Ltd.16it has
been held by the Hon'ble Apex Court that Department
should pay utmost regard to judicial discipline and give
effect to orders of higher authorities which are binding on
them.
9. Learned authorised representative for the Revenue
submitted that the quantity of the imported goods was checked
in terms of weight in this case for the reason that the unique
quantity code (UQC) prescribed for furniture is weight. He
explained that the quantity of any consignment of goods can be
indicated in variety of ways- kg, tons, litres, number, running
length, etc. depending on the nature of the goods. Often, the
quantity of the same goods can be indicated in more than one
ways and commercial transactions can be on any terms.
However, in order for ICES to make meaningful compilation of
the data and comparison of values and the customs Risk
Management System17 to determine the risk, a unique quantity
code is necessary. For this reason, a unique quantity code (UQC)
is fixed for each type of goods and the importer is required to
indicate the quantity in that code. For furniture, it is weight in kg.
The appellant grossly mis-declared the quantity of the goods and
the excess quantity found was between 50 and 70% of the
declared quantity in the four bills of entry. Therefore, the
adjudicating authority was fully justified in rejecting the
15 2004(167) ELT 538 (Tri-Mum)
16 1992 (55) ELT 433 (SC)
17 RMS
9
transaction value and re-determining it.
10. On the question of the appellant itself requesting for a first
check, i.e., requesting for the goods to be examined first before
assessment, he asserts that this submission of the appellant is
not true. While filing the Bills of Entry, the importer has an option
to request for first check and the importer can get the goods
examined before self- assessing the bills of entry and the
appellant had not opted for it but self-assessed the Bills of Entry
mis-declaring the quantity of the goods.
11. DRI received specific intelligence that the appellant had
mis-declared the quantity of goods and put an alert in the
system and accordingly, the assessing officer directed the
examining officer to conduct 100% examination of the goods
which exposed the mis-declaration.
12. When confronted with the examination report, the
appellant had not disputed either the mis-declaration or that the
value should accordingly be re-determined. It had also not
contested the re-determination of value in any manner. It had, in
fact, waived the SCN and the personal hearing thereby
precluding the possibility of the proper officer indicating how he
proposed to re-determine the duty before issuing the OIO. The
appellant undertook to pay the differential duty and fine and
penalty.
13. Having accepted the re-assessment of the Bills of Entry,
the appellant cannot now contest it. The appellant's contention
10
that it was forced to accept the re-assessment to avoid
demurrages has no force because nothing in its letters indicated
that it was accepting the re-assessment only to avoid
demurrages. He places reliance on Hanuman Prasad
14. We have considered the submissions on both sides. As per
section 17(1), the importer is required to self-assess duty on the
imported goods and as per section 17(4), the proper officer can
re-assess it. As per section 12, the value for assessing the duty
is the transaction value subject to some conditions. However,
there are situations in which the transaction value can be
rejected and the value can be re-determined as per Rule 12 of
the Valuation Rules by the proper officer. It reads as follows:
"Rule 12. Rejection of declared value. -
(1) When the proper officer has reason to doubt the truth
or accuracy of the value declared in relation to any imported
goods, he may ask the importer of such goods to furnish further
information including documents or other evidence and if, after
receiving such further information, or in the absence of a
response of such importer, the proper officer still has
reasonable doubt about the truth or accuracy of the value
so declared,it shall be deemed that the transaction value
of such imported goods cannot be determined under the
provisions of sub-rule(1) of rule 3.
(2) At the request of an importer, the proper officer, shall
intimate the importer in writing the grounds for doubting
the truth or accuracy of the value declared in relation to
goods imported by such importer and provide a
reasonable opportunity of being heard, before taking a
final decision under sub-rule (1).
Explanation.- (1) For the removal of doubts, it is hereby declared
that:-
(i) This rule by itself does not provide a method for
determination of value, it provides a mechanism and procedure
for rejection of declared value in cases where there is
reasonable doubt that the declared value does not represent the
transaction value; where the declared value is rejected, the
value shall be determined by proceeding sequentially in
accordance with rules 4 to 9.
11
(ii) The declared value shall be accepted where the proper
officer is satisfied about the truth and accuracy of the declared
value after the said enquiry in consultation with the importers.
(iii) The proper officer shall have the powers to raise doubts
on the truth or accuracy of the declared value based on certain
reasons which may include -
(a) the significantly higher value at which identical or similar
goods imported at or about the same time in comparable
quantities in a comparable commercial transaction were
assessed;
(b) the sale involves an abnormal discount or abnormal reduction
from the ordinary competitive price;
(c) the sale involves special discounts limited to exclusive
agents;
(d) the misdeclaration of goods in parameters such as
description, quality, quantity, country of origin, year of
manufacture or production;
(e) the non-declaration of parameters such as brand, grade,
specifications that have relevance to value;
(f) the fraudulent or manipulated documents."
15. As can be seen, as per Valuation Rule 12, if the proper
officer, has reason doubt the truth or accuracy of the value
declared, he can call for information and if no information is
provided by the importer or after receiving the information, if he
still has a reasonable doubt, then it shall be deemed that the
value cannot be determined as per the transaction value. Thus,
in the first stage, it is sufficient if the officer has some reason to
doubt to call for information but at the second stage to reject the
transaction value, he should have reasonable doubt. No
restrictions have been placed on the proper officer in this Rule on
raising doubts. However, explanation 1(iii) to the Rule lays down
six conditions, which may be the reason for the officer to doubt
the transaction value. However, the use of the words "raise
12
doubts on the truth or accuracy of the declared value based on
certain reasons which may include" in this explanation shows
that the officer's power to raise doubts is not limited to the six
conditions listed therein and can raise doubts for other reasons
as well. One of the six reasons listed is the misdeclaration of
goods in parameters such as description, quality, quantity,
country of origin, year of manufacture or production. In this
case, there was a specific intelligence that the quantity of the
goods were mis-declared in these consignments to evade duty.
Due diligence required the officer to check the consignment. On
examination, it was indeed, found that the quantity of the goods
in terms of weight (which is the unique quantity code for
furniture) was mis-declared. The proper officer, therefore, had
very good reason to doubt the transaction value because what
was imported was 50% to 70% more than what was declared in
the Bill of Entry, invoice and other documents.
16. Having found the mis-declaration, the proper officer could
call for information from the appellant. No specific method has
been prescribed for calling for the information- it could be in
writing or across the counter. The appellant submitted two letters
in which it nowhere disputed that the quantity of the goods
imported was more than what was declared. It also did not
dispute that the value should therefore, be re-determined. It had
also not provided any documents or explanation for the excess
quantity of the goods found. On the contrary, it agreed to pay
the differential duty and fine and penalty. Under such
circumstances, the proper officer had a reasonable doubt about
13
the transaction value and therefore, he correctly rejected the
transaction value under Valuation Rule 12.
17. Having rejected the transaction value, the proper officer
re-determined the value based on the value of contemporaneous
imports of similar goods. Since the appellant had also waived
both the Show Cause Notice and Personal hearing, neither was
an SCN issued with the relied upon documents indicating how the
duty was proposed to be re-determined nor was a personal
hearing held in which the appellant could have put forth its
defence orally or in writing. We find that the goods which were
imported were miscellaneous furniture and therefore, assessment
of the value as per the value of contemporaneous imports of
similar goods is fair and proper.
18. Learned counsel for the appellant submitted that
determination of the quantity of the goods based on the weight
taken at the CONCOR was not proper. She also argued that since
furniture is not sold by weight but by numbers, the quantity
should have been determined as per the number of articles,
which, even though the imported goods were in SKD condition,
was possible. Neither of these arguments can be accepted. If the
appellant had any doubt or reservation about the weight taken, it
could have asked the weight to be re-checked on another weigh
bridge but the appellant had not done so. If the appellant wanted
to contest that the quantity of the goods was the same even if
the weight was more, it could have said so and these factual
aspects could have been verified. It could also have been
14
ascertained as to why the weight was more-whether it was
because more furniture was imported or stronger and heavier
furniture was imported while invoices were issued for lighter
furniture. Insofar as this case is concerned, the fact that excess
quantity of 50 to 70% was imported in the Bills of Entry was not
disputed. Therefore, the assertion of the learned counsel that the
quantity of the goods was not more in the Bills of Entry cannot
be accepted.
19. Learned counsel also argued that even if the excess
quantity is imported, it makes no difference to the value and the
transaction value should have been accepted. This submission
cannot be accepted. When the transaction value shown in the
invoice and other documents was for a certain quantity and what
was actually imported was 50% to 70% more, the value in the
documents cannot be treated as the value for the total quantity
actually imported. While it is true that generally furniture is sold
by pieces and not by weight, it is equally true that heavier and
stronger furniture costs more than lighter and weaker ones.
Therefore, there was no error in the transaction value being
rejected. Learned counsel placed reliance on Abhiman Impex
and Nilkamal Ltd. Both these cases are distinguishable
inasmuch as there is nothing in either of these cases to indicate
that the importer had accepted the quantity of the goods was
more as is it in the present case.
20. Learned counsel also submitted that there is no evidence of
any undeclared flow-back to the exporter or any evidence or any
15
evidence or underhand payment and therefore, there is no
reason to discard the transaction value. However, to reject
transaction value under Rule 12, what is required is the
reasonable doubt of the officer. Evidence of flow back to exporter
or underhand payment are not necessary.
21. Learned counsel for the appellant also stated that they
were forced to apply for waiver of show cause notice as they had
suffered huge warehousing & shipping line demurrages and could
not afford to continue the goods in custom warehouse to avoid
these damages. This submission cannot be accepted since, in the
first place, there is no evidence of the appellant being forced to
waive the SCN or personal hearing. Secondly, the argument is
inherently contradictory. Demurrages are generally steep and are
levied by the custodian (Port Trust or CFS, etc.) to discourage
the imported goods blocking the space which can be used by
other importers. Goods in the Customs warehouse, however, do
not suffer any demurrages and all one is required is to pay the
rent to the warehouse keeper. Often, importers keep their goods
in the Customs bonded warehouse for months or years. If the
goods in these cases were in the Customs bonded warehouse,
there cannot be any demurrages at all.
22. Learned counsel also submitted that the very act of filing of
an appeal against an order imposing customs duty is a protest
against the duty assessed. Reliance was placed on Cisco
Systems India Pvt. Ltd., Mafatlal Industries, Mohan Textile
Mills, Ganesh Trading Company, Bayshore Glass Trading
Pvt. Ltd. vs CC Kolkata, and S&H Gears Pvt. Ltd.We find that
16
all these decisions were in the context of refund of duty paid but
which was, on appeal, set aside, could be denied on the ground
that the assessee had not paid it under protest. These do not
carry the case of the appellant any further.
23. This appeal is against re-assessment in which the appellant
waived, in writing, the SCN and personal hearing and in which it
had not even disputed that the goods which were imported were
much more than what was declared. The question is whether the
appellant can, after the goods have been cleared after paying
duty, fine and penalty, now dispute the assessment of duty on
facts which are now impossible to recheck but which could have
easily be re-checked before clearance. We find that similar case
up before this Tribunal in the case of Hanuman Prasad.
Relevant extracts of this order are below:
2. The records indicate that Hanuman Prasad had
submitted 27 Bills of Entry declaring the value of the
goods at 1.2 USD per kg and Niraj Silk had submitted 9
Bills of Entry declaring the value of the goods at 1.2
USD per kg. The Assessing Officer believed that he had
reason to doubt the accuracy of the value so declared,
since it was lesser than the contemporaneous export
data. On being confronted with such data, both
Hanuman Prasad and Niraj Silk submitted identical
letters in connection with the Bills of Entry. Hanuman
Prasad specifically stated that though it had declared
the value of the goods at 1.2 USD per kg but on
contemporaneous data having been shown, it agrees for
enhancement of the value to 1.80 USD per kg and that
it did not want any show cause notice to be issued to it
or personal hearing to be provided, nor did it want any
speaking order to be passed on the aforesaid Bills of
Entry. It further stated that it was voluntarily
relinquishing the rights provided to it under sections
124 and 17(5) of the Customs Act, 19625. The letter
written by Niraj Silk is identically worded, except
for agreeing to the enhancement of the value of
the declared goods to 1.94 USD per kg.
***
5. The value of the declared goods was thereafter enhanced by the Assessing Officer to 1.80 USD per kg. 17 in the case of Hanuman Prasad and to 1.94 USD per kg. in the case of Niraj Silk.
6. However, Hanuman Prasad and Niraj Silk challenged the order passed by the Assessing Officer on the Bills of Entry by filing 36 appeals before the Commissioner (Appeals).
*****
42. It has to be noted that the two importers, Hanuman Prasad and Niraj Silk, had not made any statement that they have accepted the value of the goods proposed by the Revenue to save demurrage charges nor did they state in the letter that the value was being accepted by them under protest and they would agitate the matter in appeal. It is only in this appeal that it has been suggested that the value was accepted to save demurrage charges, perhaps prompted by the observations made by the Tribunal in Artex Textile Private Limited.
43. Learned Counsel for the Respondent also relied upon the decision of the Tribunal in Commissioner of Customs, New Delhi (ICD TKD) vs M/s UniexcelPolychemPvt. Ltd. The Tribunal observed that:
4. On the merit of enhancement of value, we are in agreement with the findings in the impugned order. No detailed reason has been given by the Original Authority for rejection of the transaction value.
Apparently he was guided only by DRI alert which formed basis of enhancement of value. It has been repeatedly held by this Tribunal as well as Hon'ble High Courts that the transaction value cannot be rejected mechanically based on suspicion or general alert without supporting evidence to the effect that the invoice value does not reflect the transaction value required for assessment. In the present case, we find that no evidence of any nature has been brought out or discussed before such enhancement. Even contemporaneous value of similar or identical goods have not been examined and discussed"
44. This decision also does not indicate that the importers had accepted the value of the goods proposed by the Revenue in writing or that the importers had waived their right to a speaking order. In fact, it was the DRI alert that formed the basis of enhancement of value.
45. The Supreme Court observed in Eicher Tractors Ltd., which decision has also been relied upon by the learned counsel for the Respondent, that it is only when the transaction value under rule 4 of the Valuation Rules is rejected that the transaction value is required to be determined by proceeding sequentially through 18 rules 5 to 8. The decision of the Supreme Court in Century Metal Recycling also holds that if the declared transaction value is rejected, then it has to be determined in accordance with the procedure prescribed in rules 4 to 9. These decisions of the Supreme Court, for the reasons stated above, do not help the respondent.
46. Learned counsel for the respondent has also emphasized that NIDB data cannot be the sole basis to reject the transaction value without any cogent reasons. As seen above, the importers had in writing accepted the transaction value and it is perhaps for this reason that they did not require any show cause notice to be issued to them or a personal hearing to be granted to them. The respondent is, therefore, not justified in asserting that the transaction value has been determined on the basis NIDB data. It was their acceptance of the value that formed the basis for determination of the value. The decisions relied upon by the respondent to support the contention sought to be raised are, therefore, of no benefit to them.
47. The general observations made the Commissioner (Appeals) in the impugned order that the value declared in the Bills of Entry were being enhanced uniformly by the Department for a considerable period of time was uncalled for. The Commissioner (Appeals) completely failed to advert to the crucial aspect that the importers had themselves accepted the enhanced value. The Commissioner (Appeals) in fact, proceeded to examine the matter as if the assessing officer had enhanced the declared value on the basis of other factors and not on the acceptance by the importers. This casual observation is not based on the factual position that emerges from the records of the case.
48. Thus, for all the reasons above, the Commissioner (Appeals) was not justified in setting aside the orders passed by the assessing officer on the Bills of Entry.Recycling also holds that if the declared transaction value is rejected, then it has to be determined in accordance with the procedure prescribed in rules 4 to 9. These decisions of the Supreme Court, for the reasons stated above, do not help the respondent.
48. Thus, for all the reasons above, the Commissioner (Appeals) was not justified in setting aside the orders passed by the assessing officer on the Bills of Entry.
24. The only difference between this appeal and the one in Hanuman Prasad is that in this case, the re-valuation had to be done because more goods were imported than what were 19 declared which fact has been accepted by the appellant and which it had not disputed during assessment whereas in the case of Hanuman Prasad the re-assessment became necessary because the declared value was much lower than the contemporaneous values and the enhanced value itself was accepted by the importer. In Hanuman Prasad, after accepting the enhanced value and clearing the goods for home consumption, the importer assailed the re-assessment. In this case, after not disputing mis-declaration of the quantity of goods imported, the appellant did not even ask as to on what value the goods would be assessed or the basis for taking that value. By waiving the SCN and also the personal hearing, the appellant made it both unnecessary and impossible for the department to show the basis of re-determining the value of the goods. The assessing officer, having rejected the value under Valuation Rule 12, re-determined it on the basis of contemporaneous imports of similar goods based on the information available in the National Import Database (NIDB). The appellant, having waived the SCN, personal hearing, and having paid the re-assessed duty and clearing the goods for home consumption cannot now ask for the evidence or basis for re-assessment all of which it had waived, thus, putting the department in an impossible situation.
Confiscation of the goods:
25. Learned counsel submitted that the appellant had not violated any provisions of customs law and even assuming that the differential duty as adjudicated in the impugned orders was 20 correct, there was no case to confiscate the goods under section
111. It is her submission that since the appellant filed the Bills of Entry as per the invoices and other documents, no mis- declaration can be alleged. It is also her submission that the appellant itself had sought first check of the consignment. Therefore, there was no mis-declaration in the Bills of Entry.
26. According to the learned authorised representative, the appellant had not sought first check of the consignment although such a facility was available in the ICES. First check was undertaken along with 100% examination of the consignment for the reason that there was a specific alert in the system by DRI regarding the mis-declaration of the quantity of the goods in this case. The appellant had self-assessed duty as per its declaration in the Bills of Entry. The actual quantity of goods imported was much more than what was declared and hence confiscation under section 111(m) was fully justified.
27. We have considered the submissions on this aspect. It is not possible to accept the submission of the learned counsel that so long as the declaration in the Bills of Entry is as per the invoices, no mis-declaration can be alleged. The charge of duty of Customs and all the restrictions and prohibitions are on the goods imported into India and NOT on the goods said to be imported into India in the invoices or other documents. Usually, the documents match the goods actually imported and it provides a convenient way of assessing and clearing goods. However, in case of differences, what is important is the goods which are actually imported and not just what 21 have been indicated in the invoices. Relevant legal provisions are reproduced below:
" Section 11. Power to prohibit importation or exportation of goods.-
(1) If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description.
***** Section 12. Dutiable goods. -
(1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India.
(2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government.
Section 111. Confiscation of improperly imported goods, etc. -
The following goods brought from a place outside India shall be liable to confiscation: -
(m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 in respect thereof, or in the case of goods under trans-shipment, with the declaration for trans-shipment referred to in the proviso to sub-section (1) of section 54;"
Thus, it is the goods which must correspond to the declaration and if they do not, they will be liable to confiscation under section 111(m). The declaration in the Bills of Entry matching the invoices, bills of lading, etc. is of no avail. The importer is responsible for what is imported and how much is imported.
28. Reliance was placed by the appellant on Scorpian 22 International vs Commissioner of Customs18and Commissioner of Central Excise vs Aluminium Alloys Pvt. Ltd.19. In Scorpian International, a learned Member of the Tribunal held as follows:
" 8. We find that in this case during the course of physical verification, the goods were not found as declared. Therefore, the appellant contended that it is an inadvertent mistake of the supplier of the goods. In that circumstances, the revenue has alleged that it is an afterthought. We find that in that such situation, the mala fide intention of the appellants are missing. As the appellant has placed order to the foreign supplier and he has filed the bills of entry as per the packing list and declaration made by the supplier in invoices. The appellant is not known about the correct declaration, description, quantity and value of the goods. It is a fact on record that the appellant has declared the description, quantity and value of the goods as per the invoice/packing list, therefore, the benefit of doubt goes in favour of the appellant that it is an inadvertent mistake of the supplier by non- supplying the goods as per the invoice/order/packing list. In that circumstances, the goods cannot be held liable for confiscation and consequently, the penalty is not imposable on the appellant.
In Aluminum Alloys Pvt. Ltd., a learned Member of this Tribunal held as follows:
6. In this case, it is a fact on record that respondent has purchased the impugned goods on high seas sale basis from M/s. Sage Global, New Delhi. As per the Packing List, Pre-
Inspection Report, Bill of Lading, Invoice, Bill of Entry & Description of Goods are shown as "Aluminium Scrap". In that circumstance, it cannot be alleged against the respondent that he had deliberately misdeclared the goods. Moreover, from any stretch of means it is impossible to ascertain the goods contained in the container are not such goods as declared in the documents."
29. We respectfully disagree with the learned Member's finding that if the declaration was as per the invoice, packing list, etc. and the goods actually imported were different, no mis- declaration can be alleged. If it is held that it is sufficient if the declaration in the Bills of Entry match the invoices or Bills of 18 2017(357) ELT 1093 19 2018(364) ELT 3 (SC) 23 Lading even if it does not match the goods which are actually imported, it will open the floodgates for smuggling and mis- declaration. For instance, one can get an invoice for say, paracetamol and file a Bill of Entry accordingly and actually import heroin and claim that he has not mis-declared. One can get an invoice for iron and actually import gold. One can get an invoice for and declare, in the Bill of Entry, say 100 kg and actually import 1000 kg. The importer is responsible for what he has imported and it is not sufficient if he files Bills of Entry corresponding to the documents. The declaration in the Bills of Entry must match with the goods actually imported. We therefore, find no infirmity in the confiscation of the imported goods in this case. It also needs to be pointed out that the appellant had not contested before the adjudicating authority that the goods were liable for confiscation. In fact, it had, in writing agreed to pay the redemption fine. Quantum of redemption fine
30. Learned counsel submitted that even if the confiscation is upheld, the quantum of redemption fine was excessive and not proportionate to the alleged mis-declaration. Learned authorised representative for the Revenue asserted that the quantum of redemption fine is fair and proper. The value of the goods confiscated and the redemption fine and penalties imposed in the four Bills of Entry was as follows.
31. Section 125 does not prescribe how much redemption fine must be imposed but only places the upper limit of market value 24 of the goods. It reads as follows:
"Section 125. Option to pay fine in lieu of confiscation. -
(1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized,] an option to pay in lieu of confiscation such fine as the said officer thinks fit:
Provided that where the proceedings are deemed to be concluded under the proviso to sub-section (2) of section 28 or under clause (i) of sub-section (6) of that section in respect of the goods which are not prohibited or restricted, no such fine shall be imposed:
Provided further that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon.
(2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods.
(3) Where the fine imposed under sub-section (1) is not paid within a period of one hundred and twenty days from the date of option given thereunder, such option shall become void, unless an appeal against such order is pending.
Explanation .-For removal of doubts, it is hereby declared that in cases where an order under sub-section (1) has been passed before the date** on which the Finance Bill, 2018 receives the assent of the President and no appeal is pending against such order as on that date, the option under said sub-section may be exercised within a period of one hundred and twenty days from the date on which such assent is received."
32. Thus, in terms of the second proviso to Section 125, the maximum redemption fine in case of imported goods shall be the 25 market value of the goods minus the duty chargeable thereon. The redemption fine imposed in each of the four Bills of Entry is way below this limit. In the factual matrix of this case, we find that amount of redemption fine imposed is fair and proper and calls for no interference.
Quantum of penalty
33. Learned counsel for the appellant submitted that even if the demand of differential duty and confiscation of the goods is upheld, the penalties imposed upon the appellant are excessive. Learned authorised representative for the Revenue supports the penalties imposed in the impugned order. Considering the factual matrix of this case, we find that the penalties under section 112 are a small fraction of the market value of the goods confiscated which is fair and proper and calls for no interference.
34. The impugned orders are upheld and the four appeals are dismissed.
[Order pronounced on 20.09.2023 ] (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) Tejo