2001 (12) TMI 712 - AT - Customs

Tribunal overturns unjustified deodorant valuation, orders release of goods

PERFECT TRADING COMPANY Versus COMMISSIONER OF CUSTOMS, NEW DELHI

PERFECT TRADING COMPANY Versus COMMISSIONER OF CUSTOMS, NEW DELHI - 2002 (149) E.L.T. 207 (Tri. - Del.) Issues:1. Valuation of deodorants imported by the appellants.2. Confiscation of goods and imposition of penalties based on misdeclaration of value.Issue 1: Valuation of deodorants imported by the appellants.The dispute in the appeals revolved around the valuation of deodorants imported by the appellants from Dubai. The Customs authorities rejected the prices mentioned in the supplier's invoices due to the non-production of the manufacturer's invoice. Consequently, the value of the goods was enhanced based on local market enquiry, leading to the confiscation of the goods under Section 111(m) of the Customs Act, 1962 for misdeclaration of value. The appellants argued that the enhancement of values lacked a reasonable basis as the market survey report used for valuation did not provide sufficient details to ascertain market value accurately. The appellants contended that the rejection of their declared value was unjustified, especially when compared to the valuation accepted for similar goods in another case. The Customs authorities defended their actions by citing Rule 10A of the Customs Valuation Rules and argued that the market price in the Indian market was acceptable under the rules. However, the Tribunal found that the rejection of declared value solely based on market enquiry without adequate particulars rendered the valuation unjustified. The appeals were allowed, setting aside the impugned orders, and directing the Customs authorities to assess the goods at the declared values and release them promptly.Issue 2: Confiscation of goods and imposition of penalties based on misdeclaration of value.The appellants challenged the confiscation of goods and imposition of penalties on the grounds that the actions were taken without concrete evidence of misdeclaration. The Customs authorities justified the confiscation and penalties by pointing out the rejection of declared values under Rule 10A and the assessment of goods under Rule 8 of the Valuation Rules. However, the Tribunal observed that the charge of misdeclaration was primarily based on a market survey of prices without substantial proof of actual value discrepancies or underhand dealings. The Tribunal concluded that the confiscation of goods and imposition of penalties were unjustified in the absence of concrete evidence supporting the misdeclaration allegations. Consequently, the appeals were allowed, and the Customs authorities were directed to release the imported goods pending clearance since September 1999.In summary, the Tribunal found the valuation of the imported deodorants and the subsequent confiscation of goods and penalties to be unjustified due to the lack of a reasonable basis and concrete evidence supporting the misdeclaration allegations. The appeals were allowed, setting aside the impugned orders, and directing the Customs authorities to assess the goods at the declared values and release them promptly.