Mis-declaration of Value of Imported Goods as per Manufacturer’s Price Lists can attract Penalty u/s 114A: CESTAT [Read Order]

The New Delhi bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that misdeclaration of imported goods as per the manufacturer’s price lists can attract penalty u/s 114A.

The appellant M/s S.D. Overseas, a proprietorship firm had imported a consignment of Food Supplements through ICD, Tughlakabad and filed a Bill of Entry dated 04.01.2013 and the goods were cleared on 05.01.2013. Officers initiated an enquiry based on the intelligence report. A show-cause notice was issued to the appellant to explain why the declared assessable value should not be rejected under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and re-determined as per Rule 5 of the Valuation Rules. Further proposed to confiscate the imported goods u/s 111(m) and impose penalties under Section 112(a), 114A and 114AA of the Customs Act, 1962. 

The appellant contended that the data derived from NIDB cannot prove that it has mis-declared the value and, therefore, the transaction value should not have been rejected in terms of Rule 12 of the Valuation Rules and there was no evidence of additional consideration for the sale and that it has paid for the goods only through banking channels. Further submitted that the penalty should not have been imposed upon them under Section 114A and 114AA.

It was observed that the valuation has to be done under Rule 4 & 5 if the declared value was rejected under Rule 12. Further observed that the appellant has mis-declared the value of the imported goods which were only a fraction of the price of the goods as per the manufacturer’s price lists.

In light of various precedents, Justice Dilip Gupta, president and Mr P V Subba Rao, Technical member have upheld the impugned order and confirmed the penalty u/s 144A. Shri Gaurav Prakash appeared for the Appellant and Shri Sunil Kumar appeared for the Respondent.

To Read the full text of the Order CLICK HERE

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