Home Case Index All Cases Customs Customs + AT Customs - 2018 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 1115 - AT - CustomsValuation of imported goods - Server and certain related items - rejection of declared value - Customs authorities noticed that the value declared for the imported goods appears low and further that the invoice attached was from the third party - Held that - It is seen that the importer has declared only a fraction of the correct value of the imported goods. Consequently, mis-declaration on the part of the importer stands established and hence, goods are liable for confiscation under Section 111(l),(m) of the Customs Act, 1962. The seven items were mentioned in the two invoices out of which the value of the software is required to be added to that of the hardware inasmuch as the hardware is received pre-loaded with the software - However, the amounts paid towards the annual maintenance contract for three years, cannot be added to the transaction value of the imported goods inasmuch as such payment is towards post import service. Matter remanded to the adjudicating authority with the direction to add the value of software to that of the hardware and charge Customs duty accordingly - appeal allowed by way of remand.
Issues: Mis-declaration of imported goods, valuation of imported goods, inclusion of software value in customs duty, post-importation service charges, penalty imposition.
Mis-declaration of Imported Goods: The appeal was filed against the Order-in-Appeal by the Commissioner of Customs (Appeals) due to the discrepancy in the declared value of the imported goods. The Customs authorities found that the value declared for the goods was significantly lower than the actual value based on the invoices submitted. The importer had declared only a fraction of the correct value, leading to mis-declaration, which was established through the purchase order and invoices provided. Valuation of Imported Goods: The imported goods consisted of hardware and software components, with the software pre-loaded onto the hardware. The tribunal noted that the value of the software needed to be added to the hardware for customs duty assessment. However, the amounts paid for annual maintenance services post-importation were deemed separate and not to be included in the customs duty valuation. Inclusion of Software Value in Customs Duty: The appellant argued that since the software was pre-loaded and there is no import duty on software, its value should not be added to the customs duty assessment. In contrast, the Revenue contended that the software value should be included in the assessment. The tribunal ruled in favor of including the software value in the customs duty calculation. Post-Importation Service Charges: The appellant had paid amounts for a three-year maintenance contract post-importation. It was clarified that these post-importation service charges should not be considered for customs duty valuation as they were for services rendered after the importation of goods. Penalty Imposition: Penalties were imposed on the importer and the Customs House Agent (CHA) for the mis-declaration of the imported goods. The tribunal upheld the penalties, considering the intentional suppression of certain values in the invoices as mis-declaration. The issue of penalties was directed to be re-evaluated by the adjudicating authority in light of the modified customs duty calculation. In conclusion, the tribunal partially allowed the appeal, modifying the impugned order. The matter was remanded to the adjudicating authority to adjust the customs duty by adding the software value to the hardware while excluding the post-importation maintenance charges. The penalty imposition was also subject to re-evaluation based on the re-computed demand.
|