2007 (2) TMI 498 - AT - Customs

Valuation of imported PU leather cloth and entitlement for benefit of Notification No. 20/99-Cus - Contemporaneous import - End use condition - HELD THAT - The appellants had produced the evidence for import of similar goods for the same value. The adjudicating authority has stated that there is a cartel operating in this matter and therefore the value is tainted. The statement of the Commissioner has not at all been supported by any investigation. Moreover the Commissioner has stated that the impugned goods are capable of multiple uses and therefore the benefit of the said exemption Notification is not available to the appellants. While stating that the impugned goods have multiple uses the Commissioner has not relied on any expert opinion or test report. The Commissioner s views cannot be taken very seriously because without proper evidence gathered through investigation such opinions will not survive scrutiny of judicial fora. The appellants have stated that the impugned items have been sold to actual users only and in the Nhava Sheva port the benefit of exemption notification was given to them. All these averments have not been properly examined by the Commissioner. Moreover the show cause notice itself has not proposed denial of the exemption Notification. In these circumstances the order of the Commissioner denying the benefit of notification which was already allowed goes beyond the scope of show cause notice. The assessee s bills of entry have not been reviewed by the Commissioner. Thus the assessments have become final. In these circumstances the impugned order suffers from all the above mentioned vices. It was also pointed out that when the revenue relied on the value of similar goods imported the copy of the BE or relied on documents was not supplied to the importer. Therefore we do not find any merit in the impugned order with regard to the valuation and also the denial of the benefit of the exemption notification. Therefore no differential duty can be demanded and no penalties can be imposed. Hence we allow the appeal with consequential relief.

Summary

Issues involved: Valuation of imported PU leather cloth and entitlement for benefit of Notification No. 20/99-Cus.

Valuation Issue: The appellants imported PU leather cloth at a declared unit price of US$ 0.90, claiming a concessional rate of duty under Notification No. 20/99-Cus. The Revenue alleged mis-declaration and valued the goods at US$ 2.00 per meter, demanding differential duty and imposing penalties. The Commissioner upheld this valuation, finding the importers not entitled to the notification benefit due to being traders, not actual users.

Appellants' Arguments: The appellants presented evidence of similar imports cleared at comparable prices, sold only to actual users in the leather industry, and challenged the Commissioner's reliance on a higher-priced clearance by another importer. They contended that the show cause notice lacked concrete evidence, failed to address the exemption notification conditions, and did not justify rejecting the transaction value under Customs Valuation Rules.

Entitlement Issue: The Commissioner determined that the goods had multiple uses beyond leather industry application, thus denying the notification benefit. However, the appellants argued that similar imports at Nhava Sheva port had received the exemption and that the Commissioner's decision exceeded the show cause notice scope. They also highlighted the lack of expert opinion or investigation supporting the multiple-use claim.

Tribunal's Decision: After careful review, the Tribunal found the Commissioner's order flawed on various grounds. It noted the absence of specific grounds for rejecting the transaction value, lack of evidence supporting the multiple-use assertion, and failure to address the appellants' evidence and arguments. Consequently, the appeal was allowed, rejecting the differential duty and penalties, and providing consequential relief to the appellants.