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Issues Involved:
1. Enhancement of the assessable value of imported goods. 2. Basis of valuation and evidence. 3. Imposition of penalty under Section 112(a) of the Customs Act. Issue-Wise Detailed Analysis: 1. Enhancement of the Assessable Value of Imported Goods: The appellant imported 180.925 MT of HDPE Tape Grade HS 7023, with an agreed price of US$ 900 PMT as per the Sales Indent dated 9-11-1987. The Collector of Customs enhanced the assessable value to US$ 1000 PMT, based on the statement of the partner of the importing firm, who accepted that the price of HDPE of Belgian origin was US$ 1000 PMT. The appellant contended that this enhancement was wrong in law, arguing that the department did not base the enhancement on contemporaneous imports but solely on the deposition of Nirmal Surekha, which should be seen as an attempt to avoid conflict rather than an admission of undervaluation. 2. Basis of Valuation and Evidence: The Collector's decision to enhance the value was primarily based on the statement of the importer, who suggested a lenient view and agreed to a valuation increase to US$ 950 PMT to avoid further action. The appellant argued that the import documents did not reference the sales indent dated 9-11-1987, and the shipment did not occur within the first quarter of 1988 as stipulated. The Tribunal noted that the sales indent did not mention a number and the quantity discrepancies between the invoices and the indent. The Tribunal found that the communication from the supplier indicated a cancellation of the contract due to force majeure, and the subsequent shipment was not made under the original contract terms. The Tribunal held that the Collector increased the valuation to US$ 1000 PMT based on the importer's statement, which was not retracted. The Tribunal concluded that the importer's statement clinched the issue, supporting the enhanced valuation. 3. Imposition of Penalty under Section 112(a) of the Customs Act: There was a divergence in opinion among the Tribunal members regarding the imposition of a penalty. One member (G.N. Srinivasan) supported the penalty, emphasizing the importer's statement as an implicit admission of undervaluation. However, another member (Gowri Shankar) disagreed, arguing that the statement did not constitute an admission of undervaluation and that the value should not be increased solely based on the importer's statement without evidence of contemporaneous imports. Gowri Shankar highlighted that the contract was canceled, and the shipment was made under different terms, making the original contract price inapplicable. The third member (J.H. Joglekar) agreed with Gowri Shankar, stating that the importer's statement could not be considered an admission of undervaluation. He emphasized that the department should have determined the value under Rule 8 of the Valuation Rules, given the absence of contemporaneous imports. Joglekar concluded that there were no grounds for imposing a penalty, as the statements did not establish suppression of price. Final Order: In light of the third member's agreement with Gowri Shankar, the Tribunal allowed the appeal and set aside the Collector's order imposing a penalty on the appellant.
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