No Evidence to Prove Import of More than Goods Declared to Customs: CESTAT Reduces Penalty [Read Order]

In a significant case, the Bangalore bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) reduced the penalty since there was no evidence to prove that the import amount was more than the goods declared to Customs.

Sri Sai Graphics, the appellant had filed four Bills of Entry declaring the value for the goods imported viz. used Multifunctional Devices (MFDs) without obtaining necessary authorization/licence from the DGFT.  Since the impugned goods were declared as used, the Bills of Entry were marked for 1st check examination and after 1st check, it was found being used machines, therefore, the case was referred to a Chartered Engineer for valuation. 

The Chartered Engineer, Shri Garuda Prasad G.K., by the report, indicated that the equipment will have a residual life of more than 5 years.  The declared value of imported goods was ascertained by the Chartered Engineer. 

Since the photocopier machines/Digital Multifunction Print and copying machines are restricted for import and permitted only on authorization/licence issued by the DGFT. The importer was directed to place valid authorization from DGFT. As the appellant could not produce valid authorization, the transaction value was rejected and it was enhanced based on the Chartered Engineer’s certificate.  On appeal, the Commissioner(Appeals) rejected the arguments of the appeal.

It was submitted that since the appellant had repeatedly imported the goods in violation of the conditions, the imposition of a fine to the extent of 25% and a penalty of 10% is justifiable. 

A single member bench of D.M Misra, Member (Judicial) observed that the value declared by the appellant has already been enhanced by the Revenue based on the Chartered Engineers certificate. There was no evidence brought out by the revenue to show that the appellants had paid more than what he had declared to the customs.

It was viewed that in Omex International’s case, it was held that the redemption fine and penalty in such cases be 10% and 5% of the value.  Following the aforesaid precedent, the impugned order is modified and the fine and penalty in each of the cases are reduced to 10% and 5% of the enhanced value. 

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