2007 (7) TMI 494 - AT - Customs

Valuation - Contemporaneous imports - Date of import - Penalty - Imposition of - Show cause notice - Limitation

Summary

Issues:
1. Validity of show-cause notice under Section 124 of the Customs Act and invocation of larger period of limitation for demanding duty.
2. Legality of evidence gathered by Enforcement Directorate officials from a foreign country.
3. Rejection of declared value without valid reason.
4. Enhancement of value based on quotations.
5. Applicability of penalty under Section 114A of the Customs Act.

Issue 1:
The appellants contested the show-cause notice issued under Section 124 of the Customs Act, arguing that the larger period of limitation was not applicable for demanding duty. They highlighted that the notice proposed to demand differential duty under Section 28(1) of the Act. The Commissioner confirmed the assessable value, demanded differential duty, ordered confiscation of goods, and imposed a penalty. However, the appellants challenged the legality of the notice and the invocation of the larger period of limitation.

Issue 2:
Concerns were raised regarding the legality of evidence collected by Enforcement Directorate officials from a foreign country. The appellants emphasized that the legality of the proceedings was under scrutiny by the High Court. The High Court had stayed related proceedings, casting doubt on the legal validity of the evidentiary materials collected by Customs authorities. This raised questions about the admissibility and reliability of the evidence in the case.

Issue 3:
The appellants argued that the declared value of the goods was rejected without a valid reason. They contended that the enhancement of value based on a mere quotation was unsustainable under Section 14 of the Customs Act. Additionally, they asserted that any enhancement of value from goods imported from countries different from the declared origin was not permissible under Section 14.

Issue 4:
The adjudicating authority had enhanced the value of the goods based on quotations that were not contemporaneous with the import. The appellants highlighted that the assessable value of imported goods should be determined based on contemporaneous imports covered by assessed Bills of Entry. The lack of such data in this case raised concerns about the validity of enhancing the value solely on the basis of quotations.

Issue 5:
The impugned order contained a finding that the appellants were liable for penalty under Section 114A of the Customs Act, although no such penalty was imposed. It was noted that Section 114A was not in force when the alleged offense took place. This discrepancy raised questions about the applicability of the penalty provision and the findings made in the order.

In conclusion, the Appellate Tribunal found various shortcomings in the Commissioner's order, including issues related to the validity of the show-cause notice, legality of evidence, rejection of declared value without adequate justification, improper enhancement of value based on quotations, and incorrect application of penalty provisions. The Tribunal set aside the Commissioner's order, allowing the appeal and providing consequential relief to the appellants.