1985 (3) TMI 255 - AT - Customs

Summary

Issues Involved:
1. Misdeclaration of quantity and value in the import of chicks.
2. Validity of the penalties imposed under Section 112 of the Customs Act for contravention of Sections 111(d) and 111(m).
3. Assessment of duty based on declared value versus deemed value.
4. Debit in the licenses based on invoice value.

Summary:

Issue 1: Misdeclaration of Quantity and Value
The appeals involved allegations of misdeclaration of quantity and value of imported chicks by M/s BVH Limited and M/s Rallis India Limited. The department contended that the quantities declared were lower than the actual quantities received and that the prices declared were lower than the actual international prices. M/s BVH Limited argued that any excess quantity was dispatched without their knowledge and that the declared prices were based on valid agreements with the suppliers.

Issue 2: Validity of Penalties under Section 112 for Contravention of Sections 111(d) and 111(m)
The penalties imposed under Section 112 for contravention of Sections 111(d) and 111(m) were challenged. The Tribunal found that the charges of misdeclaration regarding quantity and value were not satisfactorily established. Consequently, the penalties imposed were set aside. It was noted that M/s Rallis India Ltd., as the importers on record, could not absolve themselves of responsibility by claiming ignorance of the transactions handled by M/s BVH Limited.

Issue 3: Assessment of Duty Based on Declared Value versus Deemed Value
The Tribunal held that the declared prices in the invoices should be accepted for the purposes of assessment of duty. It was determined that the department did not provide sufficient evidence to prove that the international prices were higher than the declared prices. The reliance on a letter from the Ministry of Agriculture, which speculated on higher prices, was found inadequate without corroborative evidence of actual imports at those prices.

Issue 4: Debit in the Licenses Based on Invoice Value
The Tribunal observed that the debit in the respective licenses should be based on the declared values in the invoices, which were accepted as the proper prices for the purposes of assessment of duty.

Conclusion:
The appeals were allowed to the extent that the penalties imposed were set aside, and it was ordered that duty should be assessed based on the declared values in the invoices. Additionally, it was held that the debit in the respective licenses should be on the basis of the declared values, with consequential relief granted to the appellants.

Specific Orders:
1. Appeals No. 963 & 964/80 (A):
- Penalties imposed on M/s BVH Limited and M/s Rallis India Ltd. for misdeclaration of quantity and value were set aside.
- Duty to be assessed on the declared value, treating the excess birds as 'D' line.

2. Appeal No. 1378/80 (A):
- Penalty imposed on M/s BVH Limited was set aside.
- Duty to be assessed on the declared value.

3. Appeal No. 1464/80 (A):
- Penalties for misdeclaration of value and ITC contravention imposed on M/s BVH Limited were set aside.
- Refund of excess duty collected, based on declared value.

4. Appeal No. 1465/80 (A):
- Penalty under Section 112 on M/s BVH Limited had been remitted by the Board.
- Refund of excess duty collected, based on declared value.

5. General Order:
- Debit in the respective licenses should be on the basis of the declared values.