2023-VIL-904-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs – Section 112(a) of Customs Act, 1962 – Project Import Regulations, 1986 – Import of goods – Rejection of declared transaction value – Demand of differential duty – After submission of Bond and Bank Guarantee, Customs house registered project contract of Appellant under the Regulations for concessional rate of duty of goods – Appellant had imported goods from Marubeni Corporation, Japan by availing benefit of Project Import Scheme – Proper Officer assessed goods imported by Appellant provisionally – In respect of few bills of entry, Appellant had paid duty at merit rate due to exigency clearances as required by them – Appellant requested for finalization of provisional assessment – By alleging undervaluation of goods supplied to Appellant, original authority confirmed demand of differential duty and imposed penalty under Section 112(a) of the Act – Commissioner (Appeals) upheld order of original authority – Whether demand of differential duty and imposition of penalty are legally sustainable – HELD – Reason for enhancement of value declared by Appellant is that goods were procured by Marubeni from Stone & Webstar at a higher price than that shown in invoice raised by Marubeni on Appellant – Allegation raised in SCN is that Appellant has deliberately undervalued the goods to evade customs duty and Marubeni has abetted the case – On perusal of Project import Contract, it is seen that amount fixed by parties to contract (Appellant and Marubeni) is for entire contract which includes goods which have been sourced from vendors other than Stone & Webstar – Appellant has to pay only the contract value and need not pay any amount higher even if Marubeni has procured some goods at a higher price – When all imports are taken into consideration, overall sub-contracted amount is within amount contracted between Marubeni and Appellant – There is no allegation that there is some hidden payments made by Appellant to Marubeni – Documents of payment show that Appellant has paid amount as per contract – Department has not been able to put forward cogent evidence to reject transaction value – For these reasons, demand of differential duty and penalty imposed on appellant cannot sustain and set aside – assessee appeals are allowed
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