The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the allegation of mis-declaration of goods cannot sustain, and accordingly set aside the penalty under Section 112 (a) of the Customs Act, 1962.
The appellant, Oliva Care filed Bill of Entry No. 4686063 dated 19.09.2011 declaring the goods to be knitted interlining with value declared as USD 60 per KG (Rs.1.75 per meter). The total quantity imported was 11,815 Kg as per Bill of Entry. After examination, samples were drawn and sent to the Textiles Committee’s Laboratory for testing. It was reported that the goods were 100% polyester knitted fusible interlining with a GSM of 42.5. The department was of the view that goods have been undervalued.
It was also observed by the adjudicating authority that there was a difference in the quantity imported. Instead of 11,815 Kg. declared in the Bill of Entry by the appellant, the total weight was 11,900 Kg. The appellant waived the requirement for issuance of show cause notice. The adjudicating authority, on the basis of NIDB data and other documents, rejected the transaction value and enhanced the value to USD 0.075 per Kg. (Rs.13.01 per meter).The appellant was directed to pay the differential duty.
The goods were ordered to be confiscated giving an option to the appellant to redeem the goods on payment of Redemption Fine of Rs.2, 00,000/-. The adjudicating authority imposed a penalty of Rs.50,000/- under Section 112(a) of Customs Act.
Mr. Hari Radhakrishnan, representing the appellant submitted that the adjudicating authority has violated the principles of natural justice by not providing copies of the Bills of Entry relied for enhancing the declared value. There are no reasons stated in the order for rejecting the transaction value. Further, the value cannot be enhanced by merely relying on NIDB data without supplying details to the appellant
Mr. R. Rajaraman, representing the revenue, fervently argued that the appellant has been provided with a copy of details of NIDB data. It is noted in the order that NIDB data is made part of the order as annexure to the order. Therefore, the contention of the appellant that they have not been given opportunity to defend the enhancement of value on the basis of NIDB data is without basis. There is much under valuation in the present case as the value declared was very much lower than the actual value that is seen on the basis of details obtained from NIDB data. Also, there is misdeclaration with regard to the quantity of the goods imported. It is submitted that the enhancement of value, the redemption fine and penalty imposed are legal and proper
The bench found that the adjudicating authority has held that there is misdeclaration of the goods with regard to quantity. On perusal of the records it is seen that in the bill of entry, packing list as well as other documents the quantity is declared in kilograms. However, payment of duty is on the basis of measurement in meters. On examination it was found that instead of 11,815 kilograms as declared by appellant, the total quantity imported is 11,900 kilograms
Further the two member bench of the tribunal comprising Vasa Seshagiri Rao (Technical member) and Sulekha Beevi C.S (Judicial member) noted that the said difference in quantity was too low so as to allege intentional misdeclaration of the goods. There will be some variation in the quantity during the voyage of the goods.
CESTAT held that the allegation of mis-declaration of the goods cannot sustain. Consequently, the Redemption fine and penalty imposed are set aside.
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