New goods in a stock lot are not disposal goods, and declared import value cannot be enhanced without disclosure and fair hearing.

Imported bearings found on examination to be unused and new, though part of an old stock lot, were not "disposal goods" under the Import Control Order; purchase as a stock lot did not by itself change their character, so they were covered by the import licence. The declared invoice value could not be rejected or enhanced on the basis of undisclosed comparable prices, because the importers were not given fair disclosure or adequate opportunity to explain the alleged discrepancy; the invoice value was therefore accepted. Confiscation, valuation enhancement, fine and penalty were set aside.

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Issues: (i) Whether the imported bearings, though purchased as a stock lot, were disposal goods requiring specific coverage in the import licence; (ii) whether the declared invoice value could be rejected and enhanced on the basis of undisclosed comparable prices.

Issue (i): Whether the imported bearings, though purchased as a stock lot, were disposal goods requiring specific coverage in the import licence.

Analysis: The goods were found on examination to be unused and new, though of old stock and not of uniform variety. The expression "disposal goods" in the Import Control Order was treated as distinct from "new goods". Purchase in a stock lot, by itself, was held insufficient to convert new goods into disposal goods. The reasoning followed the principle that the licence condition applies only where the goods are not new, and the physical condition of the bearings showed them to be new and usable without servicing.

Conclusion: The goods were not disposal goods and were validly covered by the licence. This issue was decided in favour of the assessee.

Issue (ii): Whether the declared invoice value could be rejected and enhanced on the basis of undisclosed comparable prices.

Analysis: The invoice value was supported by the surrounding circumstances, including acceptance of similar import values in other bills of entry. The value enhancement rested on comparable list prices which were not disclosed to the importers, and no adequate opportunity was given to explain the alleged discrepancy. In these circumstances, rejection of the declared value was not justified and the invoice value deserved acceptance.

Conclusion: The enhancement of value was unsustainable and the declared invoice value was to be accepted. This issue was decided in favour of the assessee.

Final Conclusion: The confiscation, valuation enhancement, fine and penalty were set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: Goods found to be new in condition cannot be treated as disposal goods merely because they were purchased as a stock lot, and declared import value cannot be rejected without fair disclosure and proper opportunity when relying on comparable prices.

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