2001 (11) TMI 579 - AT - Customs

Summary

Issues:
The main issues in this appeal are the quantum of fine for imported marble and the enhancement of the declared value.

Quantum of Fine:
The appellants imported rough marble blocks of Iranian origin with a declared net weight of 1941.34 MTs, while customs adopted a gross weight of 2078.26 MTs. The declared value was US $ 75/- PMT, later enhanced to US $ 85/- PMT by the Commissioner. The Commissioner justified this enhancement based on similar cargo cleared at a higher value from CSF Pune during the same period. However, the Customs (Valuation) Rules require acceptance of the transaction value unless a valid exercise is undertaken to reject it. In this case, no such exercise was conducted, and the ad hoc increase in prices was deemed unjustified.

Declared Value Enhancement:
The Commissioner determined the margin of profit by considering market enquiries and the potential undisclosed cash element in transactions involving marble. Different prices were assigned based on the color and type of stones, with white marble valued at Rs. 11,000/- PMT, color stones at Rs. 12,000/- PMT, and black stones at Rs. 15,000/- PMT. However, without a colorwise bifurcation, it was difficult to accurately assess the total market price. The appellants argued that the actual selling prices of the goods were available through invoices, which the Commissioner did not dispute. The invoices indicated that prime goods were sold at Rs. 9,700/- PMT, while goods with defects were sold at Rs. 4,700/- PMT. Based on the actual selling prices, the fine and penalty were reduced significantly from the initial amounts prescribed.

Conclusion:
The appeal was disposed of with a reduction in the fine from Rs. 1.05 crores to Rs. 35.5 lakhs and a proportionate reduction in the penalty from Rs. 10 lakhs to Rs. 3.5 lakhs based on the actual selling prices provided in the invoices.