1983 (5) TMI 258 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction and scope of the Collector of Customs under Section 130(2) of the Customs Act.
2. Validity of the price list used for reassessment.
3. Allegation of mis-declaration and undervaluation.
4. Imposition of penalties and adherence to principles of natural justice.

Issue-wise Detailed Analysis:

1. Jurisdiction and Scope of the Collector of Customs under Section 130(2) of the Customs Act:
The primary issue is whether the Collector of Customs, while exercising powers under Section 130(2) of the Customs Act, is restricted to the existing record or can consider new material that comes into his possession after the subordinate officer's order. The judgment highlights that the Collector is not confined to the existing record alone. The power to review includes examining the "legality," "propriety," and "correctness" of the decision, which may necessitate considering external material. The Tribunal found no intrinsic limitation in the Collector's power obliging him to restrict himself to the record. The Tribunal also referenced the Supreme Court ruling in Swastik Oil Mills Ltd. v. Deputy Commissioner of Sales Tax, which supports the notion that additional inquiry can be conducted if necessary.

2. Validity of the Price List Used for Reassessment:
The appellants argued that the price list dated April 1980 was irrelevant for imports made in February 1980 and was inadmissible as it was collected privately. The Tribunal noted that the price list was annexed to the show cause notice, giving the appellants the opportunity to rebut it, thus adhering to principles of natural justice. The Tribunal found no prejudice against the appellants due to the reliance on this price list, as they failed to provide any alternative price list or evidence to counter the Collector's findings. The Collector's observation that there was no indication the machines were old or used was also upheld, as the appellants could not substantiate their claim.

3. Allegation of Mis-declaration and Undervaluation:
The Assistant Collector initially assessed the goods at a higher value based on appraisers' reports, finding a significant undervaluation compared to the declared value. The Collector, upon acquiring the manufacturer's price list, reassessed the goods and found further undervaluation. The Tribunal supported the Collector's reassessment, noting that the appellants' conduct in clearing the goods hastily despite significant enhancement suggested awareness of undervaluation. The Tribunal concluded that the Collector's decision to reassess based on the price list was justified and that the appellants' claims of the machines being old and used were unsubstantiated.

4. Imposition of Penalties and Adherence to Principles of Natural Justice:
The Collector imposed personal penalties on the companies for deliberate evasion of customs duty under the guise of gifts for children, which were not used for the declared purpose. The Tribunal upheld the penalties, noting that the appellants failed to disclose the location of the machines and did not use them for the intended purpose. The Tribunal found no violation of natural justice, as the appellants were given full opportunity to present their case and rebut the evidence. The Tribunal emphasized that the conduct of the importers and the clear misrepresentation warranted the penalties imposed.

Conclusion:
The Tribunal dismissed both appeals, finding no infirmity in the Collector's orders or the procedure adopted. The reassessment based on the new price list was upheld, and the penalties were deemed justified due to the appellants' misrepresentation and misuse of the imported goods.