Back
2013 Supreme(Mad) 2499
High Court of Judicature at Madras
CHITRA VENKATARAMAN & K.B.K. VASUKI, JJ.
Commissioner of Customs (Sea) Custom House, Chennai
Versus
M.R. Associates New Delhi & Another
C.M.A. No. 3542 of 2005
Decided On : 18-07-2013
Advocate Appeared:
For the Appellant: K. Mohanamurali, SCCG.
For the Respondents:R1, N. Viswanathan, Advocate.
The main legal point established is that the assessment of imported goods should be based on the value agreed to by the importer, without invoking penal provisions based on voluntary concessions.
Headnote:
Customs Act - Valuation of imported goods - Section 108 - Rule 8 of the CVR'88 Rules
Fact of the Case:
The assessee imported printer calculators with discrepancies in quantity, description, and valuation. The Adjudicating Authority rejected the declared value and determined the value based on the importer's voluntary submission for enhancement under Section 108 of the Customs Act, 1962. The Customs, Excise and Service Tax Appellate Tribunal set aside the order and directed the assessment to be completed based on the declared value.
Finding of the Court:
The court found that the Customs, Excise and Service Tax Appellate Tribunal was justified in rejecting the reasoning of the Revenue and setting aside the order of the Adjudicating Authority. It directed the assessment to be completed based on the value agreed to by the assessee, without penal action.
Issues: The issues involved misdeclaration, valuation discrepancies, and the acceptance of enhancement of value by the assessee.
Ratio Decidendi: The court held that the assessment should be completed based on the value agreed to by the assessee, without invoking penal provisions, as the concession made by the assessee did not provide a good ground to invoke penal provisions.
Final Decision: The Civil Miscellaneous Appeal was disposed of, directing the assessment to be completed based on the value agreed to by the assessee, without penal action and without confiscation of the goods.
Chitra Venkataraman, J.
1. The Revenue is on appeal as against the order of the Customs, Excise and Service Tax Appellate Tribunal passed in No.430/2004 dated 07.06.2004 raising the following substantial questions of law :-
"1. Whether the Tribunal is correct in holding that the voluntary statement deposed under Section 108 of the Customs Act, 1962 with respect to acceptance of values, cannot be the basis for enhancing the values in the light of the settled law in the case of Surjeet Singh Chhabra Vs. Union of India (1997 (89) ELT 646 S(SC) ) ?
2. Whether the Tribunal is correct in law in granting the relief beyond the terms of the prayer of the respondent in as much as the importer had agreed enhancement to 50% and 25% of the value for calculators with cartons and without cartons respectively and by setting aside the impugned order, allowing the appeal and directing the proper officer of the appellant to complete assessment of the goods on the basis of the declared value ?"
2. The assessee herein imported two consignments under two Bills of Entry. The consignments consisted of printer calculators canon brand. On examination of the consignments by the Officers of Docks Intelligence Unit, Chennai Customs House, it was noticed that there were discrepancies with regard to quantity, description and valuation. A statement was recorded from the proprietor of the assessee. He stated that the imported models were obsolete and they needed a converter to put to use in Indian Market; he however agreed to a loading of the value by 50% for the calculators packed in cartons and by 25% for calculators without cartons. He also agreed to submit the manufacturer's invoice.
3. It is seen from the facts that the import was from Hong Kong and supplied by M/s.Asia Lucky Industrial Limited, Hong Kong. However, originally, the allegation was that there were discrepancies on the model, quantity and the valuation. Yet, after issuing the show cause notice, the Adjudicating Authority noted that there was no misdeclaration as regards the model. As regards the quantity, the Adjudicating Authority, however, rejected the importer's contention that the same was on stock-lot basis. As regards the valuation, the Authority, however pointed out that to the enquiries made with Cannon (India) Limited, Malaysia, based on which, the valuation was proposed to be revised; the order however pointed out that the evidence relied upon was based on the quotation price for Cannon (India) Limited, Malaysia, which could not be taken as the basis for valuation, since the quotation was from Malaysia and the country of origin of the goods was Hong Kong. The Adjudicating Authority further pointed out that in any event, the assessee did not produce any corroborative evidence. Thus, having noted all the above facts on the valuation and misdeclaration, and quantity, the Adjudicating Authority rejected the value declared by the assessee and determined the value under Rule 8 of the CVR'88 Rules based on the importer's voluntary submission for enhancement as per his statement under Section 108 of the Customs Act, 1962. Thus, while revising the value, the Adjudicating Authority proposed penal action on the assessee.
4. Aggrieved by this, the assessee went on appeal before the Commissioner of Customs (Appeals) questioning the correctness of the enhanced value of the goods imported. The First Appellate Authority, however rejected the appeal including the prayer for reduction of quantum of fine and penalty. Aggrieved by this, the assessee went on further appeal before the Customs, Excise and Service Tax Appellate Tribunal.
5. On going through the materials, the Customs, Excise and Service Tax Appellate Tribunal pointed out that even though show cause notice started with the quotation price of M/s.Cannon(India) Ltd., Malaysia, yet, the vigour of the allegation was however reduced stating that the quotation price of M/s.Cannon (India) Ltd., Malaysia could not be taken as a ba
