Legal principle

Where the Customs Act prescribes no limitation for the Committee of Commissioners to direct an appeal under Section 129A(2), its decision must still be taken within a reasonable time, and where earlier imports of identical or similar goods at higher prices are established with reasons supported by material, the declared transaction value may lawfully be rejected.

Court decision

The Supreme Court dismissed the appellant's appeal with no order as to costs, upholding the CESTAT order restoring the order-in-original: the Section 129A(2) decision was taken within a reasonable time given the COVID-19 pandemic and suo motu limitation extensions, and the undervaluation findings and penalties imposed on the importer were upheld in favour of the Revenue.

Facts

The appellant, a regular importer of camera stabilizer devices, brought a consignment under a Bill of Entry dated 16.02.2018 (invoice dated 30.01.2018 from a Chinese supplier, value USD 20,353 CF), and on intelligence inputs SIIB subjected the goods to 100% examination and seized them on 21.02.2018 as mis-declared and undervalued, recording Section 108 statements of the importer and the customs broker. The importer's past imports showed identical/similar model numbers at higher and different unit prices. By order-in-original dated 31.03.2018, the adjudicating authority rejected the declared value of Rs.12,87,742 under Rule 12 of the Valuation Rules read with Section 14, assessed the goods at Rs.66,18,575, ordered recovery of differential duty of Rs.16,22,228, ordered confiscation under Section 111 with a Rs.9,93,000 redemption fine, and imposed penalties of Rs.2,00,000 under Section 112(a) and Rs.3,31,000 under Section 114AA. The Commissioner (Appeals) allowed the importer's appeal on 17.12.2020, but the Committee of Commissioners, exercising powers under Section 129A(2), directed the Department to appeal on 02.11.2021, and CESTAT by order dated 29.09.2022 restored the order-in-original.

Key provisions

• Section 129A(2), Customs Act, 1962 — Appeals to the Appellate Tribunal
• Section 14, Customs Act, 1962 — Valuation of goods
• Section 128, Customs Act, 1962 — Appeal to Commissioner (Appeals)
• Section 129D, Customs Act, 1962 — Powers of Committee of Principal Commissioner of Customs or Chief Commissioners of Customs or Principal Commissioner of Customs or Commissioner of Customs to pass certain orders
• Section 129(a), Customs Act, 1962 — Appellate Tribunal
• Section 112(a), Customs Act, 1962 — Penalty for improper importation of goods
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 114AA, Customs Act, 1962 — Penalty for use of false and incorrect material
• Section 111, Customs Act, 1962 — Confiscation of improperly imported goods etc
• Rule 12, Customs Valuation (Determination of value of Imported goods) Rules, 2007 — Rejection of declared value