Mis-declaration of imported goods on invoices & bill of entry

PJ/Case Laws/2011-12/1376

Mis-declaration of imported goods on invoices & bill of entry - acceptability of declared value

Case: COMMISSIONER OF CUSTOMS, TUTICORIN v/s RABBANI EXPORTS

Citation: 2011 (271) E.L.T. 533 (Tri.-Chennai)

Issue:- Whether declared value can be accepted where goods have been clearly mis-declared in the invoice as well as in the Bill of Entry?

Brief Facts:- Respondents imported the impugned consignment describing the goods under import as 'Stainless steel melting scrap'. However, the goods were examined by the Special Investigation Branch and samples were sent to the Regional Testing Laboratory, which reported that the impugned goods did not contain any chromium but nickel contained was to the extent of 33.87%. As such, the product was found to be not stainless steel melting scrap but to be nickel alloy steel scrap.

The mis-declaration of the goods was thus established. The Original Authority held that the value of US $ 280 per M.T. declared for stainless steel metal scrap cannot be accepted for nickel alloy steel scrap. Hence, in the absence of any import of similar items, he proceeded to value the consignment on the basis of calculation provided by the importer himself based on LME report dated 24-6-98 and the Hindu Business Line dated 30-6-98. The value US $ 445.15 per M.T. was worked out on the basis of LME price for 95% pure alloy steel taking into account the fact that the impugned goods contained 33% nickel.

In appeal, Lower Appellate Authority has set aside the impugned order by holding that invoice value cannot be discarded and that the transaction value has to be accepted for valuation purposes.

Aggrived by the same, Revenue is in appeal before the Tribunal.

Appellant’s Contention:- Revenue contended that there was clear mis-declaration as proved by the testing of the sample drawn in the presence of the respondents. The value accepted by the Original Authority is also in accordance with the calculation submitted by the respondents themselves. They state that the declared value cannot be accepted when the impugned goods have been mis-declared in the invoice as well as in the Bill of Entry. Revenue placed reliance on the decision of the Supreme Court in the case of Radhey Shyam Rntanlal v. CC (Adjudication), Mumbai [2009 (238) E.L.T. 14 (S.C.)] wherein in Para 22 which approves placing reliance upon the contemporaneous publications like Weekly Bulletin of spices market and Public Ledger which contain prices in the international market.

Respondent’s Contention:- Respondent in support of the order of the lower Appellate Authority argued that the transaction value has to be adopted as has been rightly held by the lower appellate authority. They also argue that the wrong consignment was sent by supplier and they have not mis-declared the goods.

Reasoning of Judgment:- The Tribunal found that the impugned goods have been clearly mis-declared in the invoice as well as in the Bill of Entry. As such, the value indicated on the basis of such mis-declaration cannot be taken to be the transaction value. By definition, the transaction value is the price actually paid or payable for the goods when sold for export to India. In the present case, the value indicated on the invoice is for stainless steel melting scrap whereas the goods which have been exported to India are actually nickel alloy steel scrap. As such, the value of stainless steel melting scrap cannot be the transaction value of nickel alloy steel scrap.

Further, it was noted that the Supreme Court in the case of CC, Calcutta v. Sanjay Chandiram [1995 (77) E.L.T. 241 (S.C.)] clearly held that when the declaration is found to be false, the declared value is not acceptable. It was also found that the cited decision of the Supreme Court in the case of Radhey Shyam Ratanlal approves the valuation done on the basis of the international prices published in reputed publications. In the present case, Metal Bulletin prices have been adopted which was also supplied by the respondents themselves as evident from the statement dated 4-8-98 given by Shri B. Mohanasundaram, Proprietor of the respondents' firm. Metal Bulletin is a prestigious international publication like Public Ledger which publishes price derived from sales made in the international market. As such, it is held the lower Appellate Authority has clearly misdirected himself in reversing the order of the original authority. Impugned order-in-appeal set aside and order-in-original restored. Penalty of Rs. 1 lakh imposed by Original Authority reduced to Rs. 50, 000/-.

Decision:- Appeal partly allowed.

Comment:- The tribunal has rightly held that when there is misdeclaration of goods then value is also not acceptable and it has to be decided on the basis of market valuation.

Comments

PJ/Case Laws/2011-12/1376

Post a Comment

Query