Market Survey report Based on Contemporaneous Import Data is not Valid: CESTAT Sets Aside Penalty under Customs Act for MisDeclaration [Read Order]

The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT)has held that the market survey report based on contemporaneous import data is not valid and set aside the penalty under the Customs Act for misdeclaration.

M/s River Side Impex, the appellant filed a Bill of Entry through their Customs House Agent (CHA) M/s Prompt Air and Sea Cargo Pvt. Ltd. for clearance of the imported goods called Brass Ceramic Cartridge (L) size ½” Parts for use in Sanitary ware. However, the goods covered under the said Bill of Entry were examined and the container was also weighed.

The net weight was found as 21120 kg., however, the weight as per the packaging list was 20160 kg. whereas the weight declared in the Bill of Entry was 18144 kg. Thus 2976 kg. weight of the consignment was found more than the declared weight. Accordingly, goods were seized under section 110 of the Customs Act, 1962.

The invoice was also observed to have no mention of the metal contents of the brass tap cartridge. the report of a market survey that the declared assessable value of Rs. 28,08,128/- in the Bill of Entry was rejected in terms of Rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules and the value was reassessed at Rs. 55,83,280/- with the total reassessed duty of Rs. 14,75,563/-. The already paid duty of Rs. 7,42,139/- was acknowledged to have been paid.

The goods were confiscated with an option of getting those released on payment of a redemption fine of Rs. 75,000/- and the penalty of Rs. 7,33,243/- was imposed upon the appellant. On appeal, the findings have been confirmed by upholding the order.

Shri L.B. Yadav, Consultant for the appellant and Shri Rakesh Kumar, departmental representative for the Revenue.

About the allegation of under-valuation, it is submitted that Rule 7 of Valuation Rules has wrongly been straightway adopted otherwise there was no proper market enquiry as it was conducted from one specific gali of Chawri Bazar, Delhi. There is no evidence that the goods enquired were the imported goods.

The consultant also impressed upon that there was no reason for the Assessing Officer to doubt the truth or accuracy of the value declared about the goods imported by the appellant. No evidence subsequently could have been produced.

The value has wrongly been rejected under Rule 12 of the Valuation Rules. The Department has also failed to sequentially proceed from Rule 4 to Rule 9 of the said rules rather had jumped upon Rule 7 without following the requirements even of Rule 7.

that the Adjudicating Authority has mentioned the market survey report to be based on contemporaneous import data, but no such data has been mentioned in the order. It is rather coming as an admitted fact that few shops in the wholesale market were visited and the samples which were drawn at the time of examination of impugned imported goods were shown to the different vendors.

The original Adjudicating Authority in its order has observed that the imported goods were observed to be of cheaper quality and many of the shopkeepers expressed not having similar items with them. It is only one shopkeeper who has similar items, as were imported vide the impugned Bill of Entry. But there is no evidence brought on record by the department that the said shopkeeper also had imported the goods. These observations of the Adjudicating

A two-member bench of Dr Ms Rachna Gupta, Member (Judicial) and Ms Hemambika R Priya, Member (Technical) viewed that “Authority is sufficient for us to hold that the Department has not followed the statutory procedure nor has produced cogent evidence while confirming the allegations of under-valuation and while confirming the differential duty.”

To Read the full text of the Order CLICK HERE

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