Case Law Details
Shashi Dhawal Hydraulics Pvt Ltd Vs Commissioner of Customs (Import) (CESTAT Mumbai)
CESTAT Mumbai held that section 111(m) of Customs Act, 1962 may be invoked only upon material particulars being misdeclared and this detriment is in addition to duty liability determined under section 28 of Customs Act, 1962.
Facts- The appellant, M/s Shashi Dhawal Hydraulics Pvt Ltd, was proceeded against by notice dated 26th September 2006 for recovery of ₹20,31,302 that had allegedly been short-paid on import of ‘David Brown hydraulic pumps’ between December 2001 and April 2003 from M/s S&H Universal, UK upon enhancement of assessable value from GBP 90 to GBP 212 apiece by adopting the value in imports effected by M/s Shashi Charu Hydraulic Pvt Ltd, a sister concern of the appellant, from the manufacturer themselves. The impugned order also held the impugned goods liable for confiscation u/s. 111(m) of Customs Act, 1962 while imposing fine of ₹20,00,000 in lieu thereof besides invoking section 112 of Customs Act, 1962 for imposition of penalties. The order of the Tribunal disposing off the appeal had set aside the confiscation, as well as imposition of penalties thereon, while confirming the demand in the impugned order.
Conclusion- Held that section 111(m) of Customs Act, 1962 may be invoked only upon material particulars being misdeclared and this detriment is in addition to duty liability determined under section 28 of Customs Act, 1962. For such confiscation to be correct in law, it is necessary that the circumscribing circumstances must exist; the ‘value’ itself has not been established as ‘misdeclared’ even if the said ‘value’ was placed on record for assessment without making known the circumstances in which the same goods had been procured from the manufacturer at higher price. That was the consequence of the special framework, deviating from the Agreement on Customs Valuation (ACV) that was adhered to only in the subsequent Rules, and the incorporation of rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 setting the two apart. A finding on inapplicability of confiscation did not necessarily extend to ‘suppression/ misrepresentation’ deployed for enhancement of value for assessment.
As no new facts pertaining to circumstances in which the parallel transaction with manufacturer of the impugned goods was not tantamount to ‘suppression/ misrepresentation’ is on record and the non-applicability of the re-determined value is not in dispute in these proceedings, we find no reason to set aside the demand on ground of limitation.
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