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Issues: (i) Whether the imported locks and accessories were covered by REP Licences under the relevant import policy entries. (ii) Whether the invoice value could be rejected and the goods valued on the basis of market enquiry for customs assessment.
Issue (i): Whether the imported locks and accessories were covered by REP Licences under the relevant import policy entries.
Analysis: The goods were found to be cylindrical locks/door fittings with in-built locking mechanism, and their description fit the specific entry for locks and metal fittings. The specific entry in Appendix 3A prevailed over the general consumer goods entry in Appendix 2B under the policy rule that a specific description overrides a generic one. The principle of noscitur a sociis and the rule that the special prevails over the general supported the interpretation. Goods appearing individually in Appendix 3A were outside the scope of the general Appendix 2B entry, and imports under the flexibility clauses were permissible for Appendix 3A items.
Conclusion: The imported goods were covered by the licences and the confiscation on the ground of licence violation was unsustainable, in favour of the assessee.
Issue (ii): Whether the invoice value could be rejected and the goods valued on the basis of market enquiry for customs assessment.
Analysis: The customs department did not disclose the details of the market enquiries, and no cogent evidence was produced to justify rejection of the declared transaction value. The burden to displace the declared value lay on the department once rejection of transaction value was alleged. Mere suspicion or undisclosed market enquiry results could not substitute for legal proof, and there was no adequate material showing that the declared value was not genuine or that the assessed market value was properly derived.
Conclusion: The rejection of invoice value and the valuation adopted by the department were not justified, in favour of the assessee.
Final Conclusion: The impugned order was set aside, and the appeal succeeded with consequential relief because the import was held to be covered by the licence and the valuation dispute was not proved against the importer.
Ratio Decidendi: A specific import policy entry prevails over a general entry, and declared customs value cannot be rejected on the basis of undisclosed market enquiries or mere suspicion without cogent evidence discharged by the department.
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