TaxTMI 
TaxTMI 
2010 (10) TMI 31
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....try for the said goods was filed on 3rd May 2002, by M/s Vegha Shipping & Transport Pvt. Ltd. on behalf of M/s. IPCO Enterprise, whereby the total assessable value of the goods was declared at Rs. 6,75, 796.90/- with duty liability of Rs. 3,86,352/-. 3. On an examination of the bill of entry, invoice dated 17 th April 2002, and packing list issued by one M/s. Plizer Trading, Dubai, certain discrepancies were noticed by the Central Intelligence Unit, and therefore, first check appraisement was ordered. Subsequently, 100% examination of the goods was carried out on 13th-14th May 2002, and it was found that there was mis-declaration with respect to country of origin, quantity and value of the imported items. 4. On 31st May 2002, the respondent was summoned by the Central Intelligence Unit, and his statement under Section 108 of the Act was recorded. Subsequently, another statement was recorded on 6th June 2002, wherein the respondent stated that he was not aware that he required license for import of certain goods, and that he did not remember the country of origin of some of the goods. 5. Due to large number of discrepancies found in the bill of entry, a....
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....is mug in the local markets can be Rs. 40/- and Rs. 240/-respectively if they are so cheap as (sic) declared by the importers. Similar is the situation in case of all other crockery items. The advocates have not given me any explanation for such a vast difference in market values of the goods and the declared prices. On the other hand Shri Abdulla Koyloth, the proprietor of the import firm has, in his letters dated 26,08,02,09.02 and statement dated 13.09.02, accepted the determination of assessable value and the duty liability thereon in the basis of market surveys which were conducted in his presence. Under the circumstances, I am not inclined to accept the contention of the advocates that the value declared is of a complete set. In any case, these goods are mis-declared in respect of both quantities as well as value. This was done with a clear intention of evade duty." Thus, having rejected the value declared by the respondent for the purpose of Section 14 of the Act, the Commissioner held that the assessable value of the goods had to be determined under Rules 6A and 7 of the 1988 Rules. Accordingly, he confirmed the assessable value of the goods at Rs. 23,69,838/- and....
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....inst an actual user license, which the respondent did not possess. The Tribunal also deleted the penalty levied on the respondent on the ground that since the value enhancement had not been upheld by it, there was no cause for imposition of penalty. 10. Hence, the present appeal. 11. Mr. K. Swami, learned counsel appearing for the revenue, while assailing the order of the Tribunal, strenuously urged that since the respondent had made mis-declarations in the bill of entry in relation to quantity, country of origin and value of the goods, the transaction value had to be rejected in terms of Section 14(1) of the Act and Rule 4(2) of the 1988 Rules. Learned counsel further contended that in the absence of contemporaneous imports of identical or similar goods, Rule 7 of 1988 Rules would apply. Commending us to the decision of the Tribunal in Prasant Glass Works P. Ltd Vs. Collector of Customs [1996 (87) E.L.T. 518 (Tri.-Del)], Calcutta which attained finality because of dismissal of assessee's appeal by this Court in Prasant Glass Works P. Ltd Vs. Collector of Customs. [1997 (89) E.L.T. A 179], wherein it was held that in a case where the invoice value shown is i....
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.... in the business of each other; or (b) one of them has no interest in the business of other, and the price is the sole consideration for the sale or offer for sale: Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50; (1A) Subject to the provisions of sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf." 14. It would be also useful to extract Rules 2(f), 3 and 4 of the 1988 Rules, which provide that: "2(f) "transaction value" means the value determined in accordance with Rule 4 of these rules. 3. Determination of the method of valuation.-For the purpose of these rules - i. the value of imported goods shall be the transaction value, ii. if value cannot be determined under the provisions of clause (i) above, the value shall be determined by proceeding sequentially through Rules 5 to 8 of these rules. 4. Transaction valu....
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....sub-rule." 15. Both Sections 14(1) of the Act (as it existed at the relevant time) and Rule 4 of the 1988 Rules provide that the price paid by an importer to the vendor in the ordinary course of commerce shall be taken to be the transaction value in the absence of any of the special circumstances indicated in Section 14(1) of the Act and particularized in Rule 4(2) of the 1988 Rules. Therefore, the Customs authorities are bound by the declaration of the importer unless on the basis of some contemporaneous evidence the Revenue is able to demonstrate that the invoice does not reflect the correct value. (See: Commissioner of Customs, Mumbai Vs. J.D. Orgochem Limited [(2008) 16 SCC 576] and Commissioner of Customs, Calcutta Vs. South India Television (P) Ltd. [(2007) 6 SCC 373]) It is only when the transaction value under Rule 4 is rejected, that by virtue of Rule 3(ii), the value shall be determined by proceeding sequentially through Rule 5 to 8 of the 1988 Rules. (See: Commissioner of Customs, Mumbai Vs. Bureau Veritas & Ors.[(2005) 3 SCC 265] and Eicher Tractors Ltd. (supra)). Rule 5 allows for the transaction value to be computed on the basis of identical goods imported i....