2004 (11) TMI 418 - AT - Customs

Import Valuation - Mis-declaration - Rejection of transaction value - penalty - non supply of the market report - confiscation - penalty - HELD THAT - Merely because an enquiry was made before the CHA s representative would not meet the requirement of Principle of Natural Justice which require service on the importers of all such reports/enquires, before they could be relied upon. The plea made by Revenue in this appeal, on this aspect of non supply of the report, do not merit consideration. This Tribunal, in the case of Hitaishi Fine Craft Industries Pvt. Ltd. 2001 (11) TMI 728 - CEGAT, KOLKATA had held that when a BE was assessed and declared value of USD 490 PMT was loaded to USD 600 PMT, then further proposal by a issue of show cause notice consequent to DRs enquiries, to re-value at USD 710 PMT in the case, cannot be upheld. Nothing contrary has been shown. When the proper officer had reasons to believe that the declared value in the present case of USD 0.05 per piece was not as per Section 14 and thereafter, making such enquiries, as he deemed fit, loaded it to USD 0.10 per pieces, then further proposal to reload the same cannot be approved since no ground of earlier enquiries were inadequate or otherwise doubted or taken to be incorrect. The proper officer was duty bound to make such enquiries as he deemed fit, including enquiry about the nature of goods, its classification, contemparances values, market values etc. and then resort to an assessment of loading. Piece meal value loading re-adjudication is not envisaged under the Custom Act, 1962 and cannot be upheld more so when valuations as determined on the BE and assessed would be an order appealable adjudication order. No review/appeal against such an order of determination of value by the proper officer was taken by Revenue. The loading for USD 0.05 per pcs to USD 0.10 per pcs is final. That assessment, cannot be challenged by alleging misdeclaration of nature of goods, which the proper officer in the groups was in any case required to ascertain, the loading of value, on second check BE should not have been ordered. In this respect, Apex Court observations in the case Mohan Meakin Ltd. 1999 (12) TMI 58 - SUPREME COURT need appreciation. If the Collector failed to make a proper enquiry as to the market value of the goods and released the same after half hearted adjudication. Half hearted adjudications and failure to make proper market enquiry in this case is to be believed, how the proper officer loaded only 0.05 USD pcs is not explained in the appeal. There is no cause to upset the C.C. (Appeals) order on valuation. We to set aside the proceedings initiated by the Addl. Commissioner find no infirmity in the reliance placed on decisions of Tribunal by ld. C.C. (Appeals). Thus, the appeal is bereft of merits and is to be dismissed.

Summary

Issues involved: Import valuation, classification, confiscation liability, penalty imposition, application of Custom Valuation Rules, market enquiry report, misdeclaration, assessment completeness, natural justice principle, value determination, appeal against assessment order.

Import Valuation: The case involved an import of Plastic Lighters with declared value enhancement and reclassification proposed by the DRI. The Addl. Commissioner enhanced the value under Rule 7 of Custom Valuation Rules and imposed a fine for confiscation liability and penalty under Section 112(d). The Commissioner set aside the order, citing the impermissibility of straight away applying Rule 7 and lack of duty angle, thus not upholding penal action.

Classification and Misdeclaration: The Revenue contended that the decisions in previous cases did not apply, and Rule 7's market enquiry provision was not substantiated by the importers. The rejection of transaction value under Rule 4 was accepted by the importers, leading to the application of Rule 7. The assessment completeness was debated due to the nature of the goods and the need for examination.

Customs Valuation Rules Application: The Tribunal found that the assessment order based on the enhanced declared value was valid under Section 17 of the Customs Act, 1962. The Addl. Commissioner's dismissal of the Bills of Entry produced by importers was deemed incorrect, as the Customs Valuation Rules did not permit discarding comparable prices solely due to misdeclaration.

Natural Justice Principle and Value Determination: The non-supply of the market report was considered fatal to the proceedings, and the Tribunal emphasized the importance of service on importers for reliance on such reports. The Tribunal upheld the initial value determination by the proper officer and criticized the Addl. Commissioner's failure to follow Rule 5 and 6A in valuation assessment.

Conclusion: The Tribunal dismissed the appeal, finding it lacking in merits based on the assessment and valuation issues discussed. The proceedings initiated by the Addl. Commissioner were set aside, and the reliance on Tribunal decisions by the Commissioner (Appeals) was deemed appropriate.