Top Court upholds order imposing penalty upon importer of camera stabilizer devices under Customs Act, says cogent reasons were assigned to arrive at assessable value
Justices Abhay S. Oka & Pankaj Mithal [15-03-2024]

Read Order:M/s Global Technologies and Research v. Principal Commissioner of Customs, New Delhi (Import) [SC- CIVIL APPEAL NO. 9385 OF 2022]

Tulip Kanth

New Delhi, March 15, 2024: While observing that detailed reasons were recorded in the original orderas to why the transaction value of the imported goods were discarded, the Supreme Court has dismissed an appeal challenging an order imposing penalty upon an assesseeinvolved in regular import of camera stabilizer devices under the Customs Act, 1962.

The factual background of this case was such that the appellant assessee, a regular importer of camera stabilizer devices for the last several years, had imported a consignment of camera stabilizer devices under a Bill of Entry. The consignment was covered under the Invoice having a total value of USD 20,353 (CF). The invoice was issued by M/s.GuilinZhishen Information Technology Co. Ltd. in China. Out of the 4 different categories of goods, the dispute was about 3 categories. These categories were Camera Stand (3 Axis StabilizerCRA02, Unpopular Brand); Camera Stand (3 Axis StabilizerCRA01, Unpopular Brand) and Dual Handle (Unpopular Brand, Parts of Camera Stand).

On the basis of the Intelligence, the goods were examined 100% by SIIB officers. It was alleged that the goods were grossly undervalued. After taking representative samples, the goods were detained for further investigation. The goods were seized on the ground that the same were found to be mis-declared and undervalued. The appellant's past import details were retrieved from the system, and it was found that the importer had imported identical/similar items with the same model numbers at higher and different unit prices. The appellant submitted a letter to the Commissioner of Customs (Import), New Delhi, stating that the goods were imported from the manufacturer supported by the manufacturer’s invoice and that the value of the goods was listed on some of the well-known online trading and B2B websites.

The order-in-original was passed by the adjudicating authority rejecting the declared assessable value of Rs12,87,742 for the goods imported under Bill of Entry in terms of Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (Valuation Rules)read with Section 14 of the Customs Act. The adjudicating authority assessed the value of the imported goods at Rs66,18,575 and ordered recovery of differential customs duty of Rs.16,22,228. An order of confiscation under Section 111 of the Customs Act was passed, giving the appellant an option to redeem the goods on payment of a redemption fine of Rs9,93,000.

The adjudicating authority imposed penalties of Rs2,00,000 and Rs3,31,000on the importer under Sections 112(a) and 114AA respectively of the Customs Act. The appellant’s appeal before the Commissioner of Customs Civil was allowed. Accordingly, an appeal was preferred before the CESTAT and by the impugned judgment, the appeal was allowed.

On the issue of bar of limitation in the exercise of powers under sub-section (2) of Section 129A, the Division Bench of JusticeAbhay S. Oka & JusticePankaj Mithal opined that no specific time period has been prescribed for the Committee of Commissioners to exercise the power under sub-section (2) of Section 129A.“Thus, there is no prescribed period of limitation for passing an order in exercise of the power under sub-section (2) of Section 129A”, the Bench added.

It was noted that the even if the law does not provide for a specific period for taking a particular action, the authority vested with the power to take action must take the action within a reasonable time. In the present case, the relevant period of 10 months was covered by the COVID-19 pandemic. It was observed that considering the period of the pandemic, it couldn’t be said that the Committee of Commissioners had taken an unreasonably long time to decide.

On the issue of undervaluation, the Bench noted that in the impugned judgment, a comparative table of the goods subject matter of this appeal imported by the appellant and the goods imported by the appellant earlier had been incorporated. After due consideration, the adjudicating authority and CESTAT found the goods identical to/similar to the ones imported earlier. The Bench found find that except for the description as an “unpopular brand,” the products appeared to be identical/similar. The factual finding rendered by CESTAT was after a detailed consideration of the material on record.

The Top Court also noticed the statement made by an officer of the appellant during the inquiry that there was a little difference in the hardware and software functions in the disputed goods as compared to the earlier versions.

“In the order-in-original and in the impugned judgment of CESTAT on facts, it was found that Item nos. 1 and 3 were identical goods, and Item no. 2 was of similar goods. Detailed reasons have been recorded in the order-inoriginal as to why the transaction value of the imported goods has been discarded. Cogent reasons have been assigned to arrive at the assessable value”, the Bench observed while dismissing the appeals.