2004 (3) TMI 644 - AT - Customs

Summary

Issues Involved:
1. Classification and valuation of imported goods.
2. Alleged misdeclaration of goods and evasion of duty.
3. Comparison of values for assessment purposes.
4. Legality of confiscation, redemption fine, and penalty.

Detailed Analysis:

1. Classification and Valuation of Imported Goods:

The Commissioner of Customs held that the goods covered under Bill of Entry No. 412109 dated 22-7-2002 were 30 sets of Samsung Brand VCD Players in CKD condition and 820 sets of parts of Samsung Brand VCD Players. The value was determined at US$ 89 per set for the 30 sets and US$ 62.08 per set for the 820 sets. The Tribunal found that the goods imported were of different models and from different suppliers and countries, which cannot be compared for valuation purposes. The appellants provided various documents, including Proforma Invoice, Invoices, and remittance details, proving the bona fides of their transactions.

2. Alleged Misdeclaration of Goods and Evasion of Duty:

The department alleged that the goods were intentionally imported in SKD condition to evade higher duty and misdeclare the value. However, the Tribunal noted that the appellants had disclosed all parts in their respective Bills of Entry, and there was no evidence of any hawala transaction for remitting excess amounts. The Tribunal referenced previous judgments which held that importing all or major components does not constitute importing a complete unit.

3. Comparison of Values for Assessment Purposes:

The Commissioner compared the value of the imported goods with a different model imported by another entity from a different country. The Tribunal held that goods of the same model and from the same supplier can only be compared to enhance the assessable value. The Tribunal found that the Revenue's method of comparing different models and suppliers was contrary to law and judicial pronouncements.

4. Legality of Confiscation, Redemption Fine, and Penalty:

The Commissioner confiscated the goods under Section 111(m) of the Customs Act, imposed a redemption fine of Rs. 2 lakhs, and a penalty of Rs. 50,000 under Section 112(a). The Tribunal set aside the order of confiscation, redemption fine, and penalty, stating that there was no misdeclaration and the value could not be enhanced based on the comparison with different models. The Tribunal concluded that the resort to Rule 8 of the Customs Valuation Rules and Section 14 (1A) of the Customs Act by the Commissioner was not legal and proper.

Conclusion:

The Tribunal allowed the appeal, setting aside the order of enhancement of value, confiscation, redemption fine, and penalty. The Tribunal held that the goods imported were parts and not complete units, and the comparison of different models and suppliers for valuation was incorrect. The appeal was allowed with consequential relief.