2005 (2) TMI 202 - AT - Central Excise

Tribunal Upholds Appeal Decision: Imported Goods Correctly Declared as 'Door Locks,' Rejects Revenue's Misdeclaration Claims.

The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)' decision that the imported goods were accurately declared as 'door ... Classification of goods - rejection of declared value under Rule 10A of the Customs Valuation Rules - transaction value - rejection of transaction value based on contemporaneous imports - onus on the Revenue to prove that the invoice value does not represent the true commercial value - NIDB data insufficiencyClassification of goods - lock cylinder as component versus cylindrical lock as finished good - Whether the imported goods were door locks as declared or cylindrical locks attracting misdeclaration. - HELD THAT: - The Tribunal accepted the respondents' contention that a lock cylinder is a component and that use of a cylinder in a lock does not ipso facto make the imported items misdeclared cylindrical locks. The Commissioner (Appeals) relied on the supplier's catalogue and certificates from the foreign supplier and the All India Lock Manufacturers Association which identified the imports as door locks; the Revenue failed to produce material to rebut those findings. The Revenue's comparison using an Internet printout of Godrej products was not supported by any physical examination establishing identity with the imported goods. In the absence of cogent contrary material, the finding that the imports were door locks was upheld and the charge of misdeclaration was set aside.Finding of Commissioner (Appeals) that the imported goods were door locks and not cylindrical locks is upheld; misdeclaration charge set aside.Transaction value - rejection of transaction value based on contemporaneous imports - NIDB data insufficiency - onus on the Revenue to prove that the invoice value does not represent the true commercial value - rejection of declared value under Rule 10A of the Customs Valuation Rules - Whether the declared transaction value could be rejected on the basis of NIDB data and other material relied on by the Revenue. - HELD THAT: - The Commissioner (Appeals) found the NIDB data relied upon by the Department to be vague and not specific to identical goods or the same commercial level, and therefore inadequate to displace the declared transaction value. The Tribunal agreed that rejection of transaction value requires reasonable and cogent evidence of contemporaneous imports of identical or similar goods of the same origin and commercial level. Mere non-production by the importers of a manufacturer's invoice or catalogue does not shift the initial onus; it remains on the Revenue to demonstrate that the invoice value is not the true commercial value. The Revenue produced no material sufficient to show that the declared value was incorrect, and the findings of the Commissioner (Appeals) on valuation were affirmed.Rejection of the declared transaction value was not justified; the Commissioner (Appeals)'s decision to accept the declared value is upheld and the Revenue's appeal on valuation is rejected.Final Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)'s findings that the imports were door locks (not cylindrical locks) and that the declared transaction value could not be rejected on the basis of the NIDB data and material produced by the Department. Issues involved: Appeal against misdeclaration and enhancement of value of imported goods.Misdeclaration of goods:The Revenue filed an Appeal against the Order-in-Appeal setting aside charges of misdeclaration and value enhancement of goods imported by M/s. Modern Overseas. The Department's view was that the imported goods declared as 'door locks' were actually cylindrical locks, based on physical examination and market enquiry. However, the Commissioner (Appeals) held that the imported goods were indeed door locks, supported by a Certificate from the foreign supplier and the All India Lock Manufacturers Association. The NIDB data was deemed vague as it did not specify the type of locks. The Respondents argued that a lock cylinder can be used in various locks, making them cylindrical locks, and provided a catalogue to establish they imported only door locks.Value determination of imported goods:Regarding the value of the imported goods, the Revenue failed to provide sufficient evidence to reject the findings of the impugned order. The Commissioner (Appeals) noted that the NIDB data was vague and could not be used as a basis for rejecting the transaction value. It was emphasized that the burden of proof lies on the department to show that the invoice value does not reflect the true commercial value in the international market. The Tribunal agreed with the findings of the impugned order, stating that non-production of the manufacturer's invoice does not render the transaction value unacceptable. The Revenue did not establish that the declared transaction value was incorrect, leading to the dismissal of the Appeal.This judgement highlights the importance of providing clear evidence in cases of misdeclaration and value determination of imported goods, emphasizing the burden of proof on the department to justify any discrepancies in the declared values.