TaxTMI 
TaxTMI 
1995 (5) TMI 25
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....ine No. 324, declared C.I.F. value Rs. 3,06,941.52 against B/E No. 1655, dated 28-11-1989. 2.The goods were detained by the Directorate of Revenue Intelligence, Calcutta, on the basis of information that the importer was misdeclaring the country of origin of the imported goods and was under-invoicing the value of the goods. Sanjay Chandiram, Proprietor of M/s. Shiv Shankar International, was summoned to appear for the further investigation on 8-12-1989. Chandiram did not appear before the Customs authority pursuant to the summons, but moved the High Court by way of writ petition challenging the validity of the proceedings. There were various court proceedings. Ultimately, the matter reached this Court. By an order dated 3-1-1990, the Customs authority was directed to issue a show cause notice within four weeks and to complete adjudication proceedings within a further period of three weeks thereafter. 3.A show cause notice was issued by the Assistant Director, D.R.I., Zonal Unit, Calcutta, to the importer and also to M/s. N.N. Bose and Nephew, their Clearing Agents. 4.It was alleged in the show cause notice, inter alia :- that the said M/s. S.S. International have produced forge....
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....toms Act, 1962 read with Imports and Exports (Control) Act, 1947 and the Imports (Control) Order, 1955. Importer was also asked to show cause why penal action should not be taken under Section 112 of the Customs Act and extra duty to the tune of Rs. 1,24,62,949.53 should not be realised from them on the basis of the ascertained value of goods of Japanese origin. After hearing the importer and considering the evidence and materials on record, the Asstt. Collector held :- "The prices are definitely very low compared to the prices normally noticed for zipper rolls. This claim of lower price is due to the fact that the goods are reported to be of North Korean origin. In effect, if it is proved that the goods are of North Korean origin, the Department may have to accept the low price of US $ 2.28 per 100 yards. However, if it is conclusively proved that the goods are not of North Korean origin, then the prices declared are definitely low and show be revised." 6.The Assistant Collector considered the evidence on record, in particular a letter issued by the North Korean Embassy, New Delhi, dated 20th February, 1990 to the effect that the certificates allegedly issued by the North Korean....
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.... conclusion that "we are of the view that the goods are not imported from DPR Korea." 11.Thereafter, CEGAT posed the question : "What should be the assessable value as the country of origin from which the goods are imported is not ascertainable?" After referring to Section 14 of the Customs Act, which lays down that the value of the imported goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale, CEGAT came to the conclusion that since the country of origin of the goods was not known, the price must be arrived at according to the Customs Valuation (Determination of Price of Imported Goods) Rules. Thereafter, CEGAT held :- "...the Department was not sure about the correct country of origin of the impugned goods and the Department was also not sure as to what should be the correct price of the goods. That is why it was alleged in the show cause notice that the price should be determined on the basis of the value of the goods of Japanese origin or ....
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....ntially through Rules 5 to 8 of these rules. 4.Transaction value. - (1) The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules. (2) The transaction value of imported goods under sub-rule (1) above shall be accepted. ***"********* 16.These rules are based on the assumption that the price actually paid or payable for the goods has been genuinely disclosed by the importer. But, if the certificates of origin of the goods have been found to be false, the value declared in the invoices cannot be accepted as genuine. The importer had represented that the goods were of North Korean origin and had provided documents to justify its claim. The price of the goods that was declared, was the market price of DPR Korea. But, the documents produced by the appellant to support its contention that the goods were of North Korean origin, were found to be forged. The Tribunal's finding is that the goods were not imported from DPR Korea. If that be the finding, as a logical corollary, it follows that the price of the goods cannot be the price which was payable ....