2008 (9) TMI 67 - SC - Customs

Supreme Court affirms Customs Act decision, emphasizes transaction value proof

COMMISSIONER OF CUSTOMS, MUMBAI Versus MAHALAXMI GEMS

The Supreme Court upheld the Tribunal's decision in an appeal under Section 130E(b) of the Customs Act. The Court emphasized accepting the transaction ... Allegation of overvaluation - imported rough diamonds found to be overvalued in appraisers valuation repost and trade panel report – but department not proved by showing any contemporaneous evidence that invoices are fabricated or there was any relation between importer and exporter – tribunal’s finding that declared value is acceptable as transaction value is justified – revenue’s appeal dismissed Issues: Appeal under Section 130E(b) of the Customs Act against the Tribunal's order allowing the appeal filed by the assessee-respondent regarding overinvoicing of imported rough diamonds.Analysis:1. Facts and Allegations: The appellant filed an appeal against the Tribunal's order allowing the appeal by the assessee-respondent regarding the import of rough diamonds. The goods were alleged to be overinvoiced, leading to proposed confiscation and penal action under Sections 111(m) and 112 of the Customs Act, 1962.2. Customs Examination and Valuation: The customs authorities found the goods to be overinvoiced after physical examination, leading to a valuation report determining the fair value of the goods. The overinvoicing was calculated for each lot of rough diamonds, with lot No. (1) and lot No. (2) being significantly overinvoiced.3. Commissioner's Decision: The Commissioner of Customs ordered the confiscation of the goods but provided an option to the importer to pay a redemption fine and reship the goods in lieu of confiscation. A penalty was also imposed on the importer.4. Tribunal's Decision: The Tribunal set aside the Commissioner's findings, emphasizing that the declared value was the transaction value and the genuineness of the invoice was not questioned. The Tribunal highlighted the lack of evidence proving overinvoicing and the absence of any relationship between the importer and exporter.5. Judgment and Rationale: The Supreme Court upheld the Tribunal's decision, stating that the transaction value should be accepted unless proven otherwise by contemporaneous evidence. The Court emphasized the absence of evidence showing the invoices were fabricated or that a relationship existed between the importer and exporter. The Court dismissed the appeal, affirming the Tribunal's findings and directing parties to bear their own costs.