1992 (3) TMI 167 - AT - Customs

Tribunal rules in favor of appellants on misdeclaration, upholds unauthorized import charge. Reduced fines imposed.

SUPREME LACES Versus COLLECTOR OF CUSTOMS

The Tribunal ruled in favor of the appellants regarding the misdeclaration of value and description, accepting the invoice price and confirming the goods ... Valuation Issues Involved:1. Mis-declaration of goods regarding value and description.2. Import in contravention of ITC regulations.Detailed Analysis:1. Mis-declaration of Goods Regarding Value and Description:Valuation:- The Department relied on quotations from M/s. Sun Fashion Corporation, Japan, dated 1986, which quoted prices of US $ 19.00 and 19.40 per Kg. CIF for Polyurethane Bands MB 4025 and MB 5025.- The Department decided to load the declared value based on an adjudication order fixing the per Kg. price of identical goods at Rs. 200/- CIF.- The Tribunal found the following issues with the Department's reliance on these quotations:- The quotations did not specify the recipient or address.- No evidence of actual imports or sales at the quoted prices.- The quotations were two years old and related to different band types (MB 4025 and MB 5025) compared to the imported goods (MB 4024).- The production of the quoted items was discontinued in 1987, replaced by MB 4024.- The Department failed to provide evidence of undervaluation.- The Tribunal concluded that the charge of misdeclaration of value was not established, and the invoice price should be accepted.Description of Goods:- The Department alleged that the goods were bands of plastic (Polyurethane) based on chemical tests.- The appellants requested a retest to determine if the goods conformed to the definition of synthetic rubber under Chapter 40 of the Customs Tariff Act, 1975.- The retest confirmed that the goods met the elongation and recovery criteria, establishing that they were made from synthetic rubber.- The Tribunal ruled that the goods were correctly described as synthetic rubber and classified under Heading 40.16, attracting 100% basic duty + 45% auxiliary duty and 15% additional duty.2. Import in Contravention of ITC Regulations:- The importers claimed that the goods were covered by Appendix 3 Part 3 Sl. No. 396, which includes 'rubber products inclusive of products from natural and/or synthetic rubber.'- The Customs Department did not accept the REP license and classified the goods under consumer goods falling under Sl. No. 145 Appendix 2 Part B.- The Tribunal agreed with the adjudicating authority that the goods were consumer goods and were imported unauthorizedly without a valid license.- The goods were liable for confiscation under Section 111(d) of the Customs Act.- The redemption fine for the importers in Appeal No. C/436/90-C was reduced from Rs. 32,000/- to Rs. 25,000/-, and for C/1540/89-C from Rs. 25,000/- to Rs. 20,000/-.- The penalty of Rs. 10,000/- imposed on M/s. Satya Vijay Exports in Appeal No. C/1540/89-C was set aside as unwarranted.Conclusion:The Tribunal ruled in favor of the appellants regarding the misdeclaration of value and description, accepting the invoice price and confirming the goods as synthetic rubber. However, it upheld the charge of unauthorized importation under ITC regulations, imposing reduced fines and setting aside the penalty on M/s. Satya Vijay Exports.