Consification of Goods and Penalty not permissible When Imported Goods are not mis declared: CESTAT rules in favour of Surya Exim Ltd [Read Order]

In a ruling in favour of Surya Exim Limited, the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the Consification of goods and penalty not permissible when imported goods are not mis declared.

Surya Exim Limited, the appellant had imported 400.5 MTs Suspension grade PVC Resin Off Grade/ Wet Venilen 140/145/150 imported from Venezuela and filed Bill of entry No. 920/0910 dated 11.03.2010. It was noticed by the department that the appellant–importer has not submitted a chemical analysis report in respect of the PVC resin imported even though the consignment was declared to be “off grade and wet”. 

Further observed that the goods imported were found to be PVC resin but without any marking “off grade or wet” on any of the bags. Also, as per the packing list, the goods are packed in the uniform packing of 25 Kg bags whereas on physical verification, the impugned goods were found packed in Jumbo bags of 600 Kgs each without any making and weight details, thus the consignment was not as per the packing list.

The department issued a show cause notice proposing to demand differential duty, as also to confiscate the goods under Section 111(d) and (m) of the Customs Act for misdeclaration of description and value and to impose a penalty on them under Section 112(a) and 114A of the Act. On appeal, the Commissioner (Appeals), upheld the order of the lower adjudicating authority.

It was contended by the appellant that the law requires to take Assessable value of goods by section 14 of the Customs Act 1962 read with Customs Valuation Rules 2007, which provides that for assessment, the value of goods shall be the price paid or deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at time and place of importation.

A Coram comprising of Mr Ramesh Nair (Judicial Member ) and Mr Raju (Technical Member) observed that when imported goods are not mis-declared by the Appellant and transaction value is available, it was required to accept the same as per the law settled.

Further observed that if the department decided not to accept the value then there has to be a justified reason for rejecting the transaction value and then only it can further proceed to re-determine such value proceeding sequentially to Rules 4 to 9 of the Customs Valuation Rules, 2007.

The Tribunal observed that there is no reason or justification except assumptions and presumptions for alleged misdeclaration for rejecting transaction value with reliable evidence on one hand and on the other hand none of the circumstances as are provided in Rules of 2007 for rejecting transaction value are existing, found or proved by the Revenue with reliable evidence.

The CESTAT set aside the consification and penalty imposed on the appellant. Shri P.P. Jadeja appeared for the Appellantand Shri G. Kirupanandan (Authorized Representative) appeared for the Respondent.

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