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2022 (2) TMI 209 - CESTAT CHENNAIValuation of imported goods - LPG Butane - LPG Propanemis - declaration of country of origin - whether country of origin was Iran and not UAE as declared by the respondents? - seeking enhancement of value on the basis of freight and insurance charges - IOPPL (respondent) and their officers were guilty of any misdeclaration or not - levy of penalty - rejection of refund claim. Misdeclaration of goods - HELD THAT:- The Revenue while investigating the case has not referred the matter to the originating country seeking for any clarification or cancellation of the said country of origin certificate issued by the Chambers of Commerce and Industry of that country. As long as authentic documents are not disowned or corrected by the authorities in the country of origin, the respondents cannot be faulted in the declarations they have filed at the time of Bill of Entry. Confiscation - HELD THAT:- Learned Commissioner proceeds to confiscate the goods. Learned Counsel for the respondents submits that this is not tenable as no mala fide intention has been attributed to the respondents; he relies upon Oriental Containers Ltd. [2003 (3) TMI 126 - HIGH COURT OF JUDICATURE AT BOMBAY] wherein it was held confiscation of goods is not correct when the assessee was innocent victim of the fraud played by the foreign supplier and that the assessee should not be held guilty of violation of the provisions of Customs Act - Learned Commissioner finds that penalty under Section 114AA can be levied only if a person has knowledge and intent in commission or omission under the Act and therefore, he was not inclined to impose any penalty under Section 114AA of the Customs Act, 1962. Redemption fine - penalty - HELD THAT:- The Redemption fine and penalty should be imposed depending on the facts of the case and the seriousness of consequences of misdeclaration. Looking into the fact that mens rea is absent in the instant case, we find that redemption fine and penalty can be reduced. In the circumstances where it is held by adjudicating authority that respondents did not have mens rea, the imposition of redemption and penalty can be at a minimal level commensurate with the commission or omission by the respondents. Accordingly, the redemption fine imposed under Section 125 reduced from ₹ 50,00,000/- to ₹ 5,00,000/- and penalty imposed under Section 112 on M/s. IOPPL repaired from ₹ 20, 00,000 to ₹ 2,00,000/-. Valuation of goods - HELD THAT:- Having gone through the documents presented by the Learned Counsel for the respondent during the hearing, it is convincing that the price was on CFR terms and that the country of origin could not have affected the transaction value in the instant case - Coming to the alleged undervaluation on account of Insurance paid, we find that the respondents have demonstrated with documentary evidence that they have paid insurance premium of ₹ 55,049/- towards the insurance. It is thus found that the department’s averment that as freight and insurance were not available, they should be considered at the time of notional levels in terms of Rule 10 (2) of CVR 2007 is not acceptable - the Learned Commissioner’s order, as far as demand of duty on the basis of notional value of freight and insurance is concerned, does not require any interference. Refund claim - CBEC vide circular dated 22.02.2001 - HELD THAT:- The departmental officers are bound by the directions of the CBEC, where it was held that no refund/rebate claim should be withheld on the ground that an appeal has been filed against the order giving the relief, unless stay order has been obtained. - Moreover, as submitted by the Learned Counsel, the respondents in the instant case have made a security deposit of ₹ 8 crores and have been sanctioned a refund of ₹ 7.30 crores by the Assistant Commissioner which was reversed by the Commissioner (Appeals). As submitted by the Learned Counsel for the respondents that this is a case of refund of security deposit and department cannot withhold the amount citing the reason that an appeal is pending before CESTAT - retention of amounts, by department, at least over and above the amount that would have eventually fallen due from the respondent, on completion of legal process, is an excessive action in contravention of the instructions issued by the Board. The order of Learned Commissioner (Appeals) is not legally tenable and cannot be upheld - Appeal of the assesse allowed - Revenue appeal dismissed - decided against Revenue.
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