Categorization does not Mention whether ‘Painted Steel Sheets’ were Galvanized or not: CESTAT Allows Appeal to Delete Redetermined Value [Read Order]
The tribunal observed that the sheets have not been described as galvanized or ungalvanized and hence it was a case of incomplete description rather than misdeclaration.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi Bench, held that ‘painted steel sheets’ were not described completely as there was no mention whether they were galvanized or not. The CESTAT noted that it is not a case of misdeclaration and allowed the appeal.
The facts are that the imported goods are described in the Bills of Entry (BoE) and in commercial invoices as ‘painted steel sheets’. The DRI investigated and examined the goods and found them to be ‘painted galvanised steel sheets’ since the steel sheets had a zinc coating on top of which was the paint.
The SCN alleged that the appellant, VGS Enterprises, had misdeclared the nature of the imported goods and hence were liable to confiscation. Additionally, it was alleged that the declared value is liable to be rejected and redetermined.
The counsel for the appellants submitted that the importer had produced the MRC which gives the exact zinc coating along with BoE. The counsel also argued that since no comparables were served according to which the values were redetermined, the confirmation of demand of duty, confiscation and imposition of redemption fine and penalties was not correct.
The opposing counsel argued that MRC is not part of standard documents to be filed along with BoE and thus it was a clear case of mis-declaration. On the question of redetermination comparables, it was submitted that it was chosen from the National Import Database (NIDB) and cannot be doubted.
The tribunal observed that the sheets have not been described as galvanized or ungalvanized and hence it was a case of incomplete description rather than misdeclaration. CESTAT also noted that the re-determined value is to be calculated based on ‘contemporaneous Bills of Entry’ under Valuation Rule 4 which was not provided to the appellant.
Under these circumstances, the order passed cannot be sustained and needs to be set aside according to the bench of Justice Dilip Gupta (President). All three appeals were consequently allowed.
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