1993 (3) TMI 104 - SC - Customs

Supreme Court affirms Tribunal's decision on under-valuation of imported goods

The Supreme Court upheld the Customs, Excise and Gold (Control) Appellate Tribunal's decision in a case involving under-valuation of imported goods by ... Whether the goods were covered by the OGL and as such the order of confiscation under Section 111(d) of the Act was wrong as held by Tribunal ? Whether the Collector had no authority to impose the penalty of ₹ 50,000/- as held by Tribunal ? Whether the Corporation had under-invoiced the price of the goods and the Collector had rightly fixed the price per bearing at ₹ 1,79,631.76/ as held by Tribunal ? Held that:- The fact that the trade representative of USSR in his letter dated January 20,1987 has asked the appellant not to divulge the specially quoted price to any other party in India, in itself indicates that the price offered to the appellant was a special price and not the ordinary price of such goods in the course of international trade. The price in the ordinary course of international trade has been indicated in the price list published by the manufacturers in USSR. We, therefore, find no ground to interfere with the order of the Tribunal. We agree with the reasoning and the findings reached therein. We also endorse the wish and hope entertained by the Tribunal in Para 3.3 of its order regarding heavy demurrage. Appeal dismissed. Issues:- Under-valuation of imported goods- Confiscation of goods under Customs Act, 1962- Adjudication by Collector of Customs, Bombay- Appeal before Customs, Excise and Gold (Control) Appellate Tribunal- Revaluation of imported goods- Challenge of Collector's order before Tribunal- Tribunal's decision on under-invoicing- Appeal under Section 130E of the ActAnalysis:The case involved M/s. Padia Sales Corporation importing bearings from USSR, declaring a lower value than the actual price. Customs Department found discrepancies and issued a show cause notice for under-valuation and mis-declaration, leading to confiscation under the Customs Act, 1962. The Collector of Customs, Bombay, enhanced the value per bearing and ordered confiscation, allowing redemption on payment. The Tribunal remanded the matter for fresh adjudication based on additional evidence. The Collector reiterated the order with reduced redemption fine and imposed a penalty. The Tribunal set aside the confiscation and penalty, but upheld the under-invoicing finding, partially allowing the appeal. The Corporation appealed under Section 130E of the Act against the Tribunal's decision.The Supreme Court heard arguments on the invoiced price being a result of negotiation and not a special price, contrary to the respondent's claim. The Court noted that both the Collector and the Tribunal independently found the invoiced price unacceptable based on evidence. The Court reviewed the correspondence, including a letter from the USSR trade representative and the manufacturer's price list, which indicated a special price for the Corporation, not the ordinary price in international trade.Considering Section 14 of the Act, which defines the value for assessment, the Court observed that the specially quoted price, as indicated in the correspondence, was not the ordinary price in international trade. The Court agreed with the Tribunal's findings, endorsing its reasoning and decision. The Court dismissed the appeal, upholding the Tribunal's order without awarding costs.