1992 (10) TMI 197 - AT - Customs

Appellate Tribunal sets aside Additional Collector's Order, directs Department to assess imported goods under Customs Act.

BASANT INDUSTRIES Versus COLLECTOR OF CUSTOMS

BASANT INDUSTRIES Versus COLLECTOR OF CUSTOMS - 1993 (66) E.L.T. 93 (Tribunal) Issues:Under-invoicing of imported goods, acceptance of contract price for assessment, relevance of invoice price for assessment under Section 14(1) of the Customs Act.Analysis:The appeal before the Appellate Tribunal arose from an Order-in-Original concerning the importation of 11600 pieces of goods by the appellants. The customs authorities alleged under-invoicing based on invoices showing lower prices for similar goods imported at different times and proposed a duty recovery. The appellants contested this, arguing that the contract price should be accepted as genuine, citing a judgment from the Calcutta High Court. The Department, however, contended that the value for assessment under Section 14 is the prevailing price at the time of importation, not necessarily the contract price. The Department relied on Section 14(1) of the Customs Act, which deems the value to be the price at which similar goods are sold at the time and place of importation in international trade.The main contention revolved around whether the Department was obligated to accept the contract price when assessing the imported goods. The Tribunal noted that the appellants imported significantly more pieces than those covered by the invoices used by the Department to propose an enhanced value. The Tribunal found that the prices in the invoices cited by the Department were not comparable due to the substantial difference in quantities imported. As there was no evidence of contemporaneous imports at higher prices, the Tribunal directed the Department to accept the invoice price and assess the goods under Section 14(1) of the Customs Act. Consequently, the Tribunal allowed the appeal and set aside the Order of the Additional Collector.In conclusion, the Tribunal emphasized the importance of considering the quantity of goods imported and the relevance of contemporaneous prices in determining the appropriate value for assessment under the Customs Act. The judgment clarified that while the contract price is significant, the prevailing price at the time of importation is crucial for assessment purposes, especially when there is no evidence of higher-priced contemporary imports.