2003 (3) TMI 437 - AT - Customs

Summary

Issues:
1. Valuation of imported goods for customs duty assessment.
2. Confiscation and penalties imposed under the Customs Act.
3. Rejection of transaction value and demand for duty at an enhanced value.

Analysis:

Issue 1: Valuation of imported goods for customs duty assessment
The case involves the appellant, a pharmaceutical manufacturer, importing a consignment of liquorice root extract and seeking assessment at the transaction value. The impugned order rejected this request, setting the value at Rs. 65.26 per Kg, leading to confiscation under Section 111(m) of the Customs Act. The appellants argued that the transaction value should be accepted based on the purchase price from the country of origin. The Tribunal found that the purchase invoice from the supplier in Turkmenistan supported the transaction value, ruling in favor of the appellants. The Tribunal emphasized that the transaction value should be the basis for customs valuation, as per Rule 4 of Customs Valuation Rules.

Issue 2: Confiscation and penalties imposed under the Customs Act
Apart from the valuation dispute, the impugned order also imposed penalties under Sections 111(m) and 112(a) of the Customs Act on the appellant and a separate penalty on another individual. The Tribunal found errors in the valuation carried out in the impugned order, which led to the confiscation and penalties. However, the Tribunal confirmed the imposition of additional customs duty. Ultimately, the Tribunal set aside the order concerning valuation, confiscation, and penalties, directing the release of the goods to the importer-appellant after collecting duties based on the declared value.

Issue 3: Rejection of transaction value and demand for duty at an enhanced value
The appellants contended that rejecting the transaction value and demanding duty at an enhanced value was contrary to legal provisions and facts of the case. They argued that the sale price from the country of origin supported the transaction value, and the Internet offer price used for valuation was not reflective of actual transacted prices. The Tribunal agreed with the appellants, noting that the Internet offer price could not override the transaction values, especially when supported by the purchase price from the country of origin. The Tribunal emphasized that the goods should have been assessed based on the transaction value, leading to the acceptance of the appeals in relation to the valuation dispute.

In conclusion, the Tribunal ruled in favor of the appellant regarding the valuation of the imported goods, setting aside the order related to valuation, confiscation, and penalties while confirming the imposition of additional customs duty.