Customs Act | Bonafide Declaration Of Value Of Goods Can't Be Treated As Suppression Merely For Being Incorrect: CESTAT

The Bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that the declaration of the value of goods was a bonafide declaration and merely because it is ultimately found to be incorrect will not mean that the valuation was with a bad motive not declared correctly. Penalty under sections 112 and 114AA of the Customs Act could not, therefore, have been imposed upon the assessee.

In this case, the department believing that the assessee/appellant imported melamine by resorting to overvaluation of the price to avoid anti-dumping duty, conducted searches at the residential and factory premises of the assessee.

A show cause notice was issued to the assessee after two and half years from the recording of the statement of the Director raising demand of anti-dumping duty under section 28 of the Customs Act with interest and penalty alleging suppression of facts on the part of the assessee.

The assessee submitted that there is no allegation that the assessee made any mis-declaration with respect to the description, classification, quality or quantity. In fact, the assessee even mentioned the Notification in the Bills of Entry under which anti-dumping duty was leviable if the goods were imported at a price lower than stipulated in the Notification. It is, therefore, evident that allegation of suppression cannot be levied against the assessee, and hence the extended period of limitation could not have been invoked.

The department submitted that the extended period of limitation was correctly invoked as the appellant had concealed material facts from the department with an intent to evade payment of customs duty. The Principal Commissioner, therefore, committed no illegality in directing for recovery of duty under section 28(4) of the Customs Act.

The Tribunal noted that the Bills of Entry filed during this period by the appellant, copies of which have been enclosed by the appellant in a separate paper book from page numbers 25 to 50, clearly demonstrate that the goods imported by the appellant had been examined by the officers of the customs and, thereafter, out of charge was given.

The assessee had even mentioned the Notification in the Bills of Entry under which anti-dumping duty was leviable if the goods were imported at prices lower than that stipulated in the Notification. It cannot, therefore, be urged that any fact relevant to the dispute had been suppressed by the assessee, added the bench.

The bench stated that merely because the value declared by the assessee has not been found to be correct, it cannot be said that the assessee had suppressed material facts from the department.

In view of the above, the Tribunal allowed the appeal.

Case Title: M/s Goldstar Glasswares Pvt. Ltd. v. Principal Commissioner of Customs

Case Number: CUSTOMS APPEAL NO. 52752 OF 2019

Counsel for Appellant/Assessee: Dr. G.K. Sarkar and Shri Prashant Shrivastava

Counsel for Respondent/Department: Manish Kumar Shukla

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