2009 (10) TMI 717 - AT - Customs

Valuation of imported goods - The value of the consignments has been enhanced adopting the, value applicable to defective CRGO sheets based on DOV data - Held that - the enhancement of value based on DOV data of comparable goods is no doubt an accepted method for customs valuation when the declared value of the goods are not acceptable for valid reasons. However, in the present case the basic dispute is whether or not the goods imported by the Appellant can be considered as defective CRGO sheets. The materials obtained from dismantled transformers cannot be treated as defective CRGO sheets. Therefore, we do not find any misdeclaration of description by the Appellant in respect of the present consignments. Having held so, the question of applying higher value based on DOV data applicable to defective CRGO sheets also does not arise. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported goods under Heading 7226.11, requirement of license for import of second-hand goods, misdeclaration of description, valuation of imported goods based on DOV data, confiscation of goods, imposition of penalty.

Classification of Imported Goods:
The Appellant imported consignments declared as "Silicon Electrical Steel Strip Scrap" seeking classification under Heading 7226.11. The Commissioner, relying on a report, held the imported goods to be secondary/defective Silicon Electrical Steel Strips, enhancing the value significantly. The Appellant argued that the imported material was only scrap obtained from dismantled transformers, not defective goods. The Tribunal agreed, citing a previous case, and concluded that the goods from dismantled transformers cannot be classified as defective CRGO sheets, thereby rejecting the Commissioner's classification.

Requirement of License and Misdeclaration of Description:
The Commissioner had ordered confiscation of the goods, citing the requirement of a license for the import of second-hand goods and alleged misdeclaration of description. The Appellant contended that no license was needed as the goods were scrap, not defective goods, and the description was accurate. The Tribunal upheld the Appellant's argument, stating that since there was no misdeclaration of description and the goods were not defective CRGO sheets, the requirement of a license did not apply.

Valuation of Imported Goods:
The Commissioner enhanced the value of the imported goods based on DOV data applicable to defective CRGO sheets. The Tribunal acknowledged that using DOV data for valuation is acceptable when declared values are unacceptable. However, since the goods were not defective CRGO sheets, but scrap from dismantled transformers, the Tribunal rejected the enhanced valuation, emphasizing that the Appellant did not misdeclare the description.

Confiscation of Goods and Imposition of Penalty:
The Commissioner had ordered confiscation of the goods and imposed a penalty. The Tribunal set aside these orders, as it found no misdeclaration of description by the Appellant and concluded that the goods were not defective CRGO sheets. Therefore, the confiscation and penalty were deemed unwarranted.

Conclusion:
The Tribunal allowed the Appeal, setting aside the Commissioner's orders related to the nine impugned consignments, providing consequential relief to the Appellant. The judgment clarified the classification, licensing requirements, valuation methods, and penalties related to the import of goods, emphasizing accurate description and proper classification based on the nature of the imported items.