S.D. Overseas Vs Joint Commissioner of Customs (CESTAT Delhi)
Penalty u/s 114AA leviable in case of misdeclaration of the value of the imported goods as per the manufacturer’s price lists.
Facts- The appellant had imported a consignment of Food Supplements through ICD, Tughlakabad and filed a Bill of Entry dated 04.01.2013 and the goods were cleared on 05.01.2013. Thereafter, officers initiated an enquiry based on the intelligence report.
A show-cause notice was issued to the appellant calling upon it to explain as to why the declared assessable value should not be rejected under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and re-determined as per Rule 5 of the Valuation Rules. Further proposed to confiscate the imported goods u/s 111(m) and impose penalties under Section 112(a), 114A and 114AA of the Customs Act, 1962.
Conclusion- Held that the goods declared transaction value was correctly rejected under Rule 12 of the Valuation Rules by the original authority and such rejection were upheld by the impugned order. Once the declared value is rejected under Rule 12, valuation has to be done sequentially under Rule 4, 5 etc. The original authority has determined the value under Rule 5 finding them to similar to the other goods which were imported. We find nothing incorrect in the order-in-original rejecting the transaction value under Rule 12 re-determining the value as per Rule 5 and demanding the differential duty along with interest.
As far as the penalty under Section 114AA is concerned, it is imposable if a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act. We find that the appellant has mis-declared the value of the imported goods which were only a fraction of a price the goods as per the manufacturer’s price lists and, therefore, we find no reason to interfere with the penalty imposed under Section 114AA.
FULL TEXT OF THE CESTAT DELHI ORDER
M/s S.D. Overseas1, a proprietorship firm filed this appeal assailing order-in-appeal2 dated November 09, 2018 passed by the Commissioner of Customs (Appeals), New Customs House, New Delhi whereby he upheld the order-in-original dated February 26, 2016 passed by the Joint Commissioner, Inland Container Depot3, Tughlakabad and rejected the appellant’s appeal.
2. We have heard learned Counsel for the appellant and learned Departmental Representative and perused the records.
3. The appellant had imported a consignment of Food Supplements through ICD, Tughlakabad and filed a Bill of Entry dated 04.01.2013 and the goods were cleared on 05.01.2013. Thereafter, receiving intelligence that the goods cleared by the above bill of entry were highly undervalued, officers initiated an enquiry and details of goods such as description, quantity, contemporary value etc. covered by the bill of entry were retrieved from the National Import Database 4 of the Electronic Data Interchange System. 5 Further, commercial prices of the same items supplied by the manufacturer were also collected. These prices were compared and a chart was prepared as follows:
