Legal principle

An importer who voluntarily admits undervaluation, agrees to pay differential duty, and expressly forgoes Show Cause Notice and personal hearing without retraction cannot later challenge the valuation or allege breach of natural justice, since the requirement to determine value under the Valuation Rules arises only where there is a lis.

Court decision

The Tribunal partly allowed the appeal only to the extent of reducing the redemption fine from Rs.2,00,000 to Rs.20,000; the re-determined valuation, differential duty demand, interest, and the penalty of Rs.50,000 were upheld, with the benefit of the reduction going to the appellant.

Facts

M/s DJP International imported ferrite magnets (speaker parts), paper cone, epoxy resin etc. under Bill of Entry No.859681 dated 22.12.2009 classified under CTH 8505, and examination revealed the consignment weight was under-declared by about 9 tonnes. The proprietor, Mr. Arbind Kumar, voluntarily admitted mis-declaration of weight, 20% undervaluation on this consignment and 8-10% undervaluation on 28 past consignments, agreed to a chart showing differential duty across 29 Bills of Entry, and requested that no Show Cause Notice be issued and no personal hearing be granted. The adjudicating authority rejected the declared value under Rule 12 of the Customs Valuation Rules, 2007, re-determined value at Rs.5,10,665 under Section 14 read with Rule 8, confiscated the goods with an option of redemption fine of Rs.2,00,000 under Section 125, confirmed differential duty of Rs.2,37,003 under Section 28 (proviso), imposed a penalty of Rs.50,000 under Sections 112 and 114A, and demanded interest under Section 28AB. The Commissioner (Appeals) upheld this order.

Key provisions

• Section 112, Customs Act, 1962 — Penalty for improper importation of goods
• Section 14, Customs Act, 1962 — Valuation of goods
• Section 28AB, Customs Act, 1962 — [Omitted] ****
• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation
• Section 114A, Customs Act, 1962 — Penalty for short-levy or non-levy of duty in certain cases
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded