Customs, Excise and Gold Tribunal - Mumbai
Auto & Hardware Enterprises vs Commissioner Of Customs on 2 July, 2002
Equivalent citations: 2003(151)ELT330(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. This bunch of appeals is against the order of the Commissioner of Customs (Preventive), Mumbai enhancing the value of the audio amplifier and loudspeakers and other goods imported by Auto and Hardware Enterprises, ordering their confiscation under Clause (m) of Section 111, imposing penalties on the importing firm, Nareshkumar Manoharlal, its Manager and Kirit M. Udani, its partner.
2. The goods under consideration were imported in January, 2000. The value declared by the importer was not accepted by the officers of the Mumbai Custom House who enhanced the value, without there however being an adjudication order. Pending clearance of the goods at the enhanced value, the officers of the Marine and Preventive Wing of the Commissioner Preventive seized the goods from the dock, conducted their investigation and issued notice proposing to enhance the value further and confiscated the goods and to impose penalty. It is on the adjudication of this notice that the Commissioner has passed this order which is impugned before us.
3. The amplifiers imported by the appellants were of Sony brand. The basis for the increase in their value is an extract of the price communicated by the Sony India. The contention of the Counsel for the appellant that the basis for the enhancement of the value of these goods is insufficient has, in our view, to be accepted. The Superintendent of the Customs by his letter dated 11-6-2001 intimated to the appellant, "the price communicated by Sony India Ltd. was for these models of amplifier. When the Commissioner was relying upon this letter of communication, it was incumbent upon him to disclose to the appellant the full communication and not merely one part of it. There might have been some other part of the communication which might have been in its favour, for example the presence of a discount. Apart from this, the contention of the Counsel for the appellant that a mere quotation is insufficient evidence to enhance the value and that there has to be evidence in the form of prices for goods imported for which he cites the judgment of the Supreme Court in Pardia Sales Corporation v. CCE - 1993 (66) E.L.T. 35 has to be accepted.
4. We note the contention of the Departmental Representative that the provisions of Rule 10A of the Customs Valuation Rules will apply. This rule will apply where the assessing officer has reason to doubt the correctness of the transaction value. Such a doubt that he raises therefore must be based on some reason. We agree that a quotation of the manufacturer showing its factory F.O.B. prices to be higher than the declared value may constitute a reason to doubt the value declared by the importer. This however would not be conclusive evidence of the incorrectness of that value. The proper officer would be at liberty to call upon the importer to furnish further information or evidence. We therefore leave it to the Commissioner to entertain this line and value in accordance with law.
5. The loudspeakers that the appellant imported were of types Sony and Kenwood. The Commissioner has relied upon the prices quoted by Sony India and Kenwood Corporation for enhancing the value of the speakers of this brand, upon what he calls the prices obtained from internet for the Pioneer make of speakers. Our conclusions with regard to the amplifier would equally apply to the Sony and Kenwood Corporation. The quotation of the manufacturer would be nothing more than a starting point for an enquiry and would not by itself a conclusive evidence of value. We are not clear what the Commissioner obtained from the internet. It could only be the price quoted on various websites, or e-mail that he received from person. The details of such quotation had not been disclosed to the appellant. The appellant had no opportunity to meet the case. We do not think that any particular sanctity is attached to prices or quotation merely because they were obtained from a website. Websites are put up by persons who are corporation or association of persons, or individuals and the prices obtained from any websites are nothing other than prices obtained from such person by means of correspondence. The principles that governing acceptance of value contained in letters, quotations, etc., would therefore equally apply to the prices obtained from websites with the added qualification that before the website is accepted the true identity of the person who had put up the website. Before relying on these quotations, the Commissioner had to intimate the appellant of the particulars of the quotations and give it an opportunity to rebut it. The basis for enhancement of the value of interior lamps, air freshener, etc., is stated to be market enquiry made in India. These reports have also not been communicated to the appellant. Reliance upon such evidence is therefore also flawed.
6. The Commissioner's order has therefore been passed in contravention of the principles of natural justice and it is set aside. The appeals are accordingly allowed and the matter is remanded to the Commissioner for disclosing the evidence that he relied upon to the appellant and after considering its reply, to pass orders on the notice keeping our observations in mind.