2002 (10) TMI 210 - AT - Customs

Tribunal Overturns Customs Decision on Goods Classification and Burden of Proof

The Tribunal set aside the Commissioner of Customs, Chennai's decision to reclassify imported goods from chapter heading 8442.10 to 9010.00, denying ... Valuation (Customs) Issues:- Classification of imported goods under different chapter headings- Allegation of under-valuation and comparison with goods imported at different times- Burden of proof on importer to establish valuation- Reopening of assessment barred by time- Principles of valuation under Section 14 of the ActClassification of imported goods under different chapter headings:The appeals arose from an Order-in-Original passed by the Commissioner of Customs, Chennai, where the appellants imported a photo-composing machine. The classification was initially declared under chapter heading 8442.10, but after investigations, it was changed to chapter heading 9010.00, resulting in the denial of benefits claimed under certain notifications. The Commissioner upheld the reclassification, citing a previous case as precedent. However, the Tribunal found that the goods imported by the appellants were different from those in the comparison case, with distinct descriptions and weightage. The Tribunal emphasized that it was the Revenue's responsibility to establish comparability, which was not done in this case.Allegation of under-valuation and comparison with goods imported at different times:The Department alleged under-valuation based on a previous Bill of Entry from 1991, which was different in description and weight from the appellant's import. The Commissioner rejected the importer's arguments regarding the differences in items and prices, shifting the burden of proof onto the importer. However, the Tribunal disagreed, stating that the burden of proof lies with the Revenue to demonstrate under-valuation with contemporaneous evidence. The Tribunal highlighted the lack of comparability between the imports and the insufficiency of evidence provided by the Revenue.Burden of proof on importer to establish valuation:The Commissioner's decision placed the onus on the importer to prove the correctness of the valuation, contrary to legal provisions. The Tribunal clarified that it is the Revenue's responsibility to establish under-valuation with contemporaneous evidence. In this case, the Tribunal found that the evidence presented was not contemporaneous, as the comparison was made with a much earlier import, and the goods were sourced from different entities.Reopening of assessment barred by time:The appellants argued that the assessment had been finalized after due inquiry, and thus, reopening the matter was time-barred under Section 28 due to the absence of suppression or under-valuation. The Tribunal considered the timeline of assessments and agreed that the reopening was not justified, given the absence of evidence supporting under-valuation or suppression.Principles of valuation under Section 14 of the Act:The Tribunal reviewed the principles of valuation under Section 14 of the Act and emphasized the need for contemporaneous evidence to establish under-valuation. It noted that the imports in question were not contemporaneous and lacked comparability, leading to the setting aside of the Commissioner's order. The Tribunal found the impugned order to be legally incorrect and set it aside, allowing the appeals with consequential relief, if any, as per the law.