Customs Tribunal Upholds Rejection of Transaction Values; Orders Recalculation of Duties

Tribunal mandates reassessment using CIF values, sets aside anti-dumping duty, and upholds penalties for false declarations.

In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in New Delhi has upheld the decision of the Principal Commissioner of Customs to reject the declared transaction values by M/s Royal Blankets under the Customs Valuation Rules, 2007. The Tribunal has, however, directed that the values be reconsidered as Cost, Insurance, and Freight (CIF) rather than Free on Board (FOB) in the absence of supporting evidence, necessitating a recalibration of differential duties.

The appeal arose from a previous order dated 25th October 2019, where the Principal Commissioner rejected declared transaction values across multiple Bills of Entry, citing undervaluation based on evidence unearthed during investigations linked to other firms associated with the appellant. The Tribunal has confirmed the rejection of values for 22 out of 23 Bills of Entry under Rule 12 of the Customs Valuation Rules, 2007. However, it annulled the demand for one particular Bill of Entry, citing the doctrine of merger, as it had already been reassessed and upheld by the Commissioner (Appeals).

Moreover, the Tribunal has set aside the imposition of anti-dumping duty on one Bill of Entry, pointing out the lack of any recorded reasoning for its imposition in the original order. The Tribunal also addressed the appellant's challenge regarding the use of Excel sheets as evidence, noting that the sheets, printed and signed by the appellant during investigations, were valid despite the absence of a Section 138C certificate, given the context of their retrieval and authentication.

Penalties levied under Section 114A and 114AA of the Customs Act, 1962, have been upheld, with modifications directed for recalculation of penalties under Section 114A, aligning with the revised duty assessments. The Tribunal found the penalties appropriate, emphasizing the appellant's role in knowingly making false declarations to evade customs duties.

This ruling underscores the Tribunal's stringent stance on customs compliance, emphasizing due diligence and accurate declaration in import transactions. The recalibration of duties and penalties reflects a commitment to ensuring fair trade practices and adherence to legal provisions.

Bottom Line:

Customs Valuation Rules - Rejection of declared transaction value under Rule 12 upheld for 22 out of 23 Bills of Entry. Differential duty and penalties to be recalculated considering values as CIF instead of FOB. Anti-dumping duty set aside due to lack of reasoning. Penalty under section 114AA upheld.

Statutory provision(s): Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, Rule 12; Customs Act, 1962, Sections 14, 28(4), 114A, 114AA, 138C.

Royal Blankets v. Principal Commissioner, Customs (IMPORT)-ICD, (CESTAT)(New Delhi)(Principal Bench) : Law Finder Doc Id # 2793843