Cus - Whether, if appellant has waived his right to waive SCN he foregoes right to challenge proposed action in SCN forever - Whether, without adducing any evidence, can Revenue discard declared transaction value - difference of opinion - Matter referred to TM: CESTAT
By TIOL News Service
NEW DELHI, FEB 14, 2014: THE appellant had imported 980 pieces of old and used monitors from Germany in the year 2008. The goods were subjected to examination under first check procedure to ascertain physical condition of the goods and its relation to the declared value. On the basis of chartered engineer's certificate, the goods were found to be old and used CRT monitors size 17"; year of manufacture between 1999-2004 and the market value of the said goods was found to be Rs. 8,23,900/-. On the basis of the value proposed by the chartered engineer, the value of the goods was enhanced to Rs. 6,91,711/- for assessment purpose after granting abatement from the market value. It was also noticed that since these old and used items required a licence under foreign trade policy 2004-2009 and no licence was produced by the appellant the goods were liable for confiscation, redemption fine and penalty.
The adjudicating authority did the rest - he confiscated the old and used CRT monitors u/s 111 (d) of the Customs Act, 1962 but was generous to allow redemption of the same on payment of a fine of Rs. 1 lakh. A penalty of Rs. 2 lakhs was also imposed on the appellant.
The lower appellate authority also upheld this order.
The appellant had taken the plea that market enquiry was conducted at their back and no copy of chartered engineer's report was given. The redemption fine and penalty have been imposed without calculating margin of profit and it is on higher side. Incidentally, it is observed from the records that the appellant waived issue of SCN and agreed to the o-in-o passed by the Additional Commissioner indicating that they accepted the finding in respect of non-availability of licence/permission of DGFT for import of old and used monitors of different brands and manufactured in different countries. The appellants also did not challenge the value arrived at by the chartered engineer. They had also waived personal hearing with the request to decide the case based on documents available on records.
The Member (T) inter alia observed that since the appellant waived his right to waive the SCN and defend the same he had foregone his right to challenge the proposed action in SCN for ever. Holding that the judgments quoted by the Commissioner (A) were apt and the imposition of penalty and redemption fine were justified, the Member (T) rejected the appeal.
The Member (Judicial) did not agree with this order and, therefore, recorded a separate order thus -
+ As there is nothing on record to show that the appellants were associated with the market inquiry and the result of the same was given to the appellants along with a copy of Chartered Engineers certificate, I feel constrained to accept the above submission of the appellant.
+ Revenue has not adduced any evidence to first discard the declared value as incorrect. It is well settled law that the transaction value has to be adopted as the correct assessable value unless there is sufficient, tangible and positive evidence to show that such transaction value is not the correct value. In the present case, there is no such evidence on record to reflect upon the incorrectness of the transaction value. There is no evidence to show that the importer has paid any extra amount to the supplier of the photocopier other than the transaction value which is reflected in the invoice. As such, in my view the rejection of the transaction value without any reference to the evidence cannot be upheld.
+ The fact that the appellant has challenged such enhancement before the higher appellate forum is itself indicative of the appellants non-acceptance of the enhanced value. Merely because the appellants waived the issuance of show cause notice for quick release of the goods does not mean that they are stopped from challenging the enhanced value by the Revenue. I find no reason to discard the transaction value, in the absence of any evidence to the contrary.
After adverting to the decisions, inter alia, in CC, Cochin vs. Dilip Ghelani (2009-TIOL-1984-CESTAT-BANG), Tejus Proprietary concern of Tejus Rohit kumar Kapadia (2011-TIOL-594-HC-MUM-CUS), the Member (J) observed - "In as much as in the present case, all the Coordinate Benches have taken a categorical view of imposition of redemption fine of 10% and penalty of 5% of the value of imported goods, I find no justification to take a different view. It may not be out of place to mention here in some of the cases, the importers were repeatedly violating the EXIM policy provisions. Inspite of that, the Tribunal imposed redemption fine and penalty of 10% and 5% of the value only.”
In fine, the Member (J) set aside the order as regards the enhancement of the value but upheld the confiscation of the imported goods with an option to the appellant to redeem the same on payment of redemption fine of 10% of the value of the goods and penalty of 5% of the value of goods is upheld.
In view of the difference of opinion, the matter is referred to the Third Member for a Majority decision.
(See 2014-TIOL-229-CESTAT-DEL)
