In a recent case, the Supreme Court of India upheld the order of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) and penalties and viewed that the import of cameras stabilizer different than mentioned in bill of entry amounts to mis declaration. The Court relied on the statement of officer that there is a little difference in the hardware and software functions in the disputed goods as compared to the earlier versions.
M/s Global Technologies and Research, the appellant assessee has taken an exception to the judgment and order passed by the CESTAT in an appeal preferred under Section 129 (A) of the Customs Act, 1962 ( the Customs Act ).
The appellant assessee has been a regular importer of camera stabilizer devices for the last several years. The appellant assessee imported a consignment of camera stabilizer devices under a Bill of Entry dated 16th February 2018. The consignment was covered under the Invoice dated 30th January 2018, having a total value of USD 20,353 (CF). The invoice was issued by M/s.Guilin Zhishen Information Technology Co. Ltd. in China.
The goods were examined 100% by SIIB officers. It was alleged that the goods were grossly undervalued. After taking representative samples, the goods were detained for further investigation. The goods were seized on the ground that the same were found to be mis-declared and undervalued. Statements under Section 108 of the Customs Act of the respondent and the customs broker were recorded on 23rd February 2018.
The appellant’s past import details were retrieved from the system, and it was found that the importer had imported identical/similar items with the same model numbers at higher and different unit prices. The appellant submitted a letter to the Commissioner of Customs ( Import ), New Delhi, stating that the goods were imported from the manufacturer supported by the manufacturer’s invoice and that the value of the goods was listed on some of the well-known online trading and B2B websites.
The order-in-original was passed by the adjudicating authority rejecting the declared assessable value of Rs.12,87,742/- for the goods imported under Bill of Entry dated 16th February 2018 in terms of Rule 12 of the Customs Valuation ( Determination of Value of Imported Goods ) Rules, 2007 (‘the Valuation Rules’) read with Section 14 of the Customs Act. The adjudicating authority assessed the value of the imported goods at Rs.66,18,575/-. The adjudicating authority ordered recovery of differential customs duty of Rs.16,22,228/-.
An order of confiscation under Section 111 of the Customs Act was passed, giving the appellant an option to redeem the goods on payment of a redemption fine of Rs.9,93,000/. The adjudicating authority imposed penalties of Rs.2,00,000/- and Rs.3,31,000/- on the importer under Sections 112(a) and 114AA respectively of the Customs Act. On appeal, the Commissioner allowed the appeal. Against this the revenue preferred appeal before the CESTAT, whereby the CESTAT restored the order-in-original passed by the adjudicating authority.
It was argued that CESTAT completely ignored the definitions of ‘identical’ and ‘similar’ goods under the Valuation Rules. He submitted that the finding that the goods imported by the appellant in the past were similar or identical is completely erroneous, as the earlier goods purchased were not comparable at all.
The ASG appearing for the respondent – Revenue pointed out that under sub-section (2) of Section 129A for exercising power by the Committee of Commissioners, no time limit was incorporated in the Customs Act. However, under Section 129D, which deals with orders passed by the original authority, for a similar exercise to be done by the Committee of Commissioners, a limitation of 30 days has been prescribed. He submitted that the judgment and order of the Commissioner (Appeals) was passed on 17th December 2020, and the order under subsection (2) of Section 129A was made on 2nd November 2021. He submitted that those were the days of the COVID-19 pandemic, and the orders passed by this Court in the exercise of suo motu powers of extending limitations were in force at that time.
It was found that under the Bill of Entry subject matter of the appeal, the goods were shown as “unpopular models”. There was no explanation as to why, within a few months, the goods had become unpopular. The Counsel for the department pointed out that though later on, the importer claimed that the goods imported were of low versions compared to the earlier goods, the market survey showed that there were no such low versions in the market. He invited our attention to the comparison of features of the goods imported under the subject Bill of Entry and the earlier imports.
Justice Abhay S. Oka and Justice Pankaj Mithal observed the statement made by an officer of the appellant during the inquiry before the adjudicating authority. In paragraph 11, he stated that there is a little difference in the hardware and software functions in the disputed goods as compared to the earlier versions. Cogent reasons have been assigned to arrive at the assessable value.
The Court upheld the order of the CESTAT and held that “No fault can be found with the imposition of penalties. Hence, there is no merit in the appeal and the same is dismissed with no order as to costs. “
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