Mere Acceptance Of Re-Assessed Value And Payment By Assessee Not Be Sufficient To Confirm Allegations Of Under Valuation: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that mere acceptance of the re-assessed value and payment by the assessee will not be sufficient to confirm the allegations of undervaluation.

The bench of Ravana Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) observed that to avoid any delay and demurrage charges, in case the consignment is held by the Customs Authority, the assessee/appellant opted to pay the differential amount demanded by them. The voluntary payment hence cannot be called admission of the assessee towards the alleged mis-declaration for value from the above discussion.

The appellant/assessee filed a Bill of Entry through their CHA M/s Prompt Air and Sea Cargo Pvt. Ltd. for clearance of the imported goods called Brass Ceramic Cartridge (L) size 1⁄2” Parts for use in sanitary ware.

However, the goods covered under the bill of entry were examined, and the container was also weighed. The net weight was found to be 21120 kg. However, the weight as per the packaging list was 20160 kg, whereas the weight declared in the Bill of Entry was 18144 kg. Thus, at 2976 kg, the weight of the consignment was found to be in excess of the declared weight. The value declared in the Bill of Entry was also observed to be low.

The goods were seized under Section 110 of the Customs Act, 1962. The already-paid duty of Rs. 7,42,139 was acknowledged to have been paid. The goods were confiscated with the option of being released on payment of a redemption fine of Rs. 75,000, and a penalty of Rs. 7,33,243 was imposed. When it was challenged, the findings were confirmed by upholding the order under challenge.

The appellant contended that there is neither a misdeclaration nor an undervaluation in the impugned bills of entry. The allegations are vehemently denied, with the mention that the brass ceramic cartridges have been imported into pieces and the value is per piece-based value. The weight has neither consequence nor any connection with the value. Otherwise, the container as such, including the packaging materials, was weighed. Hence, it has wrongly been held to be a case of misdeclaration.

The department contended that, on examination, there was an excess weight of 2976 kg in the consignment imported by the appellant. It was reasonable to doubt the declaration as far as the quantity and also as far as the value of the consignment is concerned.

The tribunal noted that the burden is on the department to prove allegations of undervaluation, which has not been discharged.

Counsel For Appellant: L.B. Yadav

Counsel For Respondent: Rakesh Kumar

Case Title: M/s River Side Impex Versus Commissioner (Preventive)

Case No.: Customs Appeal No. 52057 Of 2019

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