The Supreme Court recently ruled that under the Customs Act, the Bill of Entry for subsequent imported goods can be disregarded if they are undervalued compared to previously imported identical or similar goods. This decision affirmed the findings of the Central Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The Court cited the provision allowing for discarding the transaction value if earlier imports of identical or similar goods were made at a higher price from the same seller/exporter.
Brief Facts:
The appellant, a regular importer of camera stabilizer devices, imported a consignment under a Bill of Entry dated February 16, 2018, covered by an invoice from M/s. Guilin Zhishen Information Technology Co. Ltd. in China. The goods were alleged to be undervalued and seized on February 21, 2018, after examination by SIIB officers. Statements were recorded, past import details were retrieved, and a market survey was conducted. The adjudicating authority, citing Customs Valuation Rules, assessed the value of the imported goods significantly higher than declared, imposing a substantial customs duty, a redemption fine, and penalties. The appellant's appeal was initially allowed by the Commissioner of Customs Appeals but later challenged by the Department and restored by the CESTAT on September 29, 2022.
Contentions of the Appellant:
The appellant's counsel made two primary arguments. Firstly, they challenged the timeliness of the review order by the Committee of Commissioners, asserting it exceeded the 10-month limit from the Commissioner (Appeals)'s decision. Secondly, they emphasized that CESTAT overlooked the precise definitions of 'identical' and 'similar' goods under the Valuation Rules. They highlighted technical differences supported by manufacturer documentation, arguing against comparisons with earlier imports due to significant disparities in features and functions.
Contentions of the Respondent:
The learned ASG representing the respondent argued that the Committee of Commissioners wasn't bound by a time limit under sub-section (2) of Section 129A, unlike Section 129D. They highlighted the impact of the COVID-19 pandemic on timelines. They questioned the sudden change in the goods' popularity, citing discrepancies in the importer's claims. Additionally, they stressed similarities in features between the goods in question and earlier imports, supported by the adjudicating authority's findings, upheld by the CESTAT.
Observations of the Court:
The Supreme Court, in endorsing the findings of the CESTAT, determined the goods to be identical or similar to those imported earlier, despite the appellant's claims of minor differences in hardware and software functions. The court noted a statement by an officer of the appellant acknowledging these differences during the inquiry before the adjudicating authority. They emphasized that detailed reasons were provided in the order-in-original and the CESTAT judgment regarding the valuation of the imported goods. Based on these findings, the court affirmed that the assessing officer had sufficiently established the undervaluation of the declared transaction value, citing precedent from Sanjivani Non-ferrous Trading Pvt. Ltd. The Court concluded that no error was made by the CESTAT in upholding the imposition of penalties and the recovery of differential customs duty from the appellant.
The decision of the Court:
The Supreme Court dismissed the appeal as there was no merit in the appeal and the same is dismissed with no order as to costs.
Case Title: M/s Global Technologies and Research versus Principal Commissioner of Customs, New Delhi (Import)
Coram: Hon’ble Mr. Justice Abhay S. Oka and Hon’ble Mr. Pankaj Mithal
Citation: 2024 Latest Caselaw 164 SC
Advocate for the Appellant: Mr. Sanjay R. Hegde, Sr. Adv. Mr. Manoj K. Mishra, AOR Mr. Shahrukh Ali, Adv. Mr. Ankit Tiwari, Adv. Ms. Stuti srivastava, Adv. Mr. Umesh Dubey, Adv. Mr. A. Baskar, Adv. Mr. D. N. Dubey, Adv. Mr. Vishal, Adv. Mr. Piyush Singh, Adv.
Advocate for the Respondents: Mr. N. Venkatraman, A.S.G. Mr. Mukesh Kumar Maroria, AOR Mr. B.K. Satija, Adv. Mr. H.R. Rao, Adv. Mr. A.K. Kaul, Adv. Mr. Shantnu Sharma, Adv.
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