Re-assessment did not Follow the CVRs, Examination Sought before Assessment: CESTAT Allows Appeal [Read Order]

The Customs, Excise and Service Tax AppellateTribunal (CESTAT), Mumbai, allowed an appeal noting that the re-assessment did not follow the Customs Valuation (Determination of Valuation of Imported Goods)Rules, 2007 (CVR) and that the assessee sought an examination of goods before initial assessment.

The facts of the case are that the appellant imported from Germany articles of base metal and flanges of plastics. The importer/assessee requested for first check examination of imported goods by jurisdictional customs authorities before assessment of such goods as some of the goods were ‘used’ and some unused. After examination by a Chartered Engineer, it was reported that all goods were found to be old and used other than capital goods and stated that they are not allowed for import.

The Commissioner (Imports) then ordered for re-assessment on 17.10.2013. He confiscated the import goods on grounds of misdeclaration under Section 111(m) and allowed it to be released on payment of redemption fine under Section 125(a). The matter was appealed to the Commissioner (Appeals) who confirmed the previous order and dismissed the appeal. The matter was then and finally put before the Tribunal by way of appeal.

The counsel for the appellant submitted that the Commissioner (Appeals) failed to consider that the appellant/importer themselves sought for first check examination in order to verify the details and there is no ground for deliberate misdeclaration for enabling the goods for confiscation, imposition of fine and penalty. The Chartered Engineer also mentioned this in his observations.

Further, it was argued that the re-determined assessable value is made in contravention of Rule 5(3) of the CVR. The tribunal observed that there is no data of contemporaneous import values and the re-determination of value has solely been made on the basis of Certificate given by the Chartered Engineer.

Additionally, CESTAT held that the misdeclaration is not in line with the facts of the case and the confiscation, fines and penalties are thus not sustainable. The two member bench of M.M. Parthiban (Technical Member) and Dr. Suvendu Kumar Pati (Judicial Member) also held that the CVR provisions have not been followed and therefore, set aside the order passed by the Commissioner (Imports).

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