Customs, Excise and Gold Tribunal - Delhi
Iron Master (I) Pvt. Ltd. And Ors. vs Cc on 21 June, 2002
Equivalent citations: 2002(105)ECR444(TRI.-DELHI), 2002(150)ELT599(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. These appeals are directed against duty demands and penalties imposed under order in original No. 27/ADJ/Skas/2001 dated 28.3.2001 passed by the Commissioner of Customs (Gen.), New Delhi. The appellant M/s Iron Master India Pvt. Ltd. imported 7 consignments of Casio brand musical instruments during the period June, 1997 to September, 1998. The impugned order has held that the imported goods had been undervalued causing of short levy of custom duty of over Rs. 21 lakhs. Duty demand and penalties are consequent to this finding.
2. The only material relied upon for reaching a finding regarding undervaluation is the price of comparable goods imported by M/s Jay International. While the appellant's imports were at Delhi, the imports of Jay International were carried out at Bombay.
3. The appellants have contested the findings and duty demand on merits as well as on the issue of time bar. On the issue of time bar, the appellant's submission is that the demand in respect of 6 out of the 7 consignments has been raised beyond the normal time limit, even though none of the factors (collusion, willful mis-statement or suppression of facts by the importer etc.) permitting the raising of demand for the extended period was present in the instant case. Only in the case of import under bill of entry No. 000165 dated 18.9.1998 the demand is within time limit since the original clearance of the goods was on provisional assessment. The appellants have submitted that they were regularly importing the musical instruments from the authorized dealer of the Japanese manufacturer and they had declared the transaction values in the import documents and those declarations were in conformity with the purchase price shown in the invoices. Thus, there was no mis-declaration or mis-statement of facts to evade payment of correct amount of duty. They have, therefore, urged that the demand in respect of Bills of Entries other than bill of entry No. 000165 dated 18.9.1998 is required to be set aside on the ground of time bar alone.
4. With regard to the duty demand in respect of goods covered by bill of entry No. 000165 dated 18.9.1998, the appellant's submission is that the reassessment carried out in the impugned order is contrary to legal provisions relating to valuation of imported goods. It has been emphasized that there was no evidence what-so-ever indicating that the prices declared by the appellant were not the transaction values. No evidence showing additional payments for the goods manipulation of documents exist. They have submitted that it is settled law that transaction value should be accepted for assessment of the goods unless such value falls in the category of exceptions stipulated in the Valuation Rules themselves. The appellants have also pointed out that import of goods at a higher value by some other importer is no criterion for rejection of the transaction.
5. Apart from the above legal position, the appellant has also submitted that the material relied upon by the Commissioner, comparable value of certain varieties of musical instrument imported by M/s Jay International, was not sufficient for revision of assessable value. It has been emphasized in particular that comparable value was not available for several varieties like CTK 501, CTK 520L, CTK 620L, WK1200, CTK 401, CTK 511, CTK 601, CTK 485 and CTK 611 imported by the appellant under Bill of Entry No. 000165. The appellants have pointed out that the Commissioner has fixed the assessable value of such items also by resorting to "average loading of other models", a procedure not contemplated under the valuation provisions. The appellants have also submitted that the procedure adopted by the adjudicating authority was also not fair or just inasmuch as the appellants were not given copies of the invoices of comparable imports by M/s Jay International. During the hearing of the case, learned Counsel for the appellant also pointed out that the price comparison was also not appropriate inasmuch as the appellant's prices were on FOB basis while the prices of M/s Jay International were on CIF basis.
6. As against the aforesaid submissions on behalf of the appellants, the contention of the revenue is that under Rule 10A of the Valuation Rules the authorities were justified in discarding doubtful prices and fixing assessable value based on imports price of comparable goods. The learned SDR pointed out that the variation between the prices of appellants imports and the imports of M/s Jay International was considerable as discussed in detail in the impugned order and rejection of the appellant's transaction value was fully justified. He also submitted that once the declared value was found to be too low, the charge of misdeclaration of value is attract under the provision of Section 111 of the Customs Act for confiscation of the goods the provisions of Section 112 of the Customs Act in regard to imposition of penalty. He also pointed out that once the values were found to be misdeclared extended period was also rightly invocable.
7. In the present case, the revaluation has been undertaken based on the price of imports by another importer. The prices mentioned in the appellant's import invoices and the declarations made by them in the import documents have been challenged based solely on the import prices of another importer at Bombay. There is no material casting any doubt that the prices mentioned in the invoices represented the true transaction value. There is also no material that the appellant declared a lower value than the transaction value. It is normal that prices vary from customer to customer and from time to time. In these circumstances, the charge of willful suppression of facts or mis-statement of facts cannot be rightly raised against the appellants. Invoking of extended period for demand of duty is, therefore, clearly not sustainable. For these reason alone, the demand in respect of 6 out of 7 imports have to fail on the ground. In respect of imports under Bill of Entry No. 000165 dated 18.9.1998 also the revision of prices suffers as from several flaws. There was no comparable price in respect of several models. Therefore, there was no reasonable basis for revising their prices. In respect of the other items also the comparable prices were available only in respect of one importer. The revision of prices also has been carried out without making available the invoices relating to the imported goods to the appellant. In these circumstances, we are of the opinion that this is not a fit case for demand of differential duty on the ground of under valuation of the goods. Since the duty demand is not sustainable, the penalties also cannot be sustained.
8. In the light of what has been stated above, the appeals are allowed with consequential relief to the appellants.
Pronounced on 21.6.2002.