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Issues involved: Appeal against the order of Commissioner of Customs enhancing the price of imported goods, confirming duty differentials, and imposing penalties.
Summary: The judgment by Appellate Tribunal CESTAT AHMEDABAD pertained to two appeals arising from the same impugned order by the Commissioner of Customs. The order enhanced the price of imported goods, confirmed duty differentials, and imposed penalties under Section 112(a) of the Customs Act, 1962. The goods were also confiscated with an option for redemption on payment of a fine. The appellants, M/s. Varsha Plastics Pvt. Ltd., imported Citric Acid and Sodium Hydro Sulphite of Chinese Origin at declared prices. The Revenue conducted investigations, and the Director's statement indicated the prices were below normal international rates due to direct orders and lack of financial flow-back to the supplier. The appellants contested the show cause notice waiver and argued that the contemporaneous invoices referred to by Revenue were for lower quantities, making them unsuitable for comparison with their 200 MT imports. They claimed to have ordered directly from M/s. Varsha Plastics at lower prices due to bypassing commission agents. Despite their contentions, the Commissioner upheld the price enhancement, confiscation, and penalties based on the Director's admission of lower prices. The Tribunal, after reviewing the Commissioner's order, found reliance solely on the Director's statement insufficient. The statement only acknowledged lower prices compared to international rates, not undervaluation. Additionally, the contemporaneous invoices cited were for significantly lower quantities, contrary to established legal principles requiring matching quantities for comparison. Lack of evidence showing financial discrepancies or falsity in the declared invoice value led the Tribunal to set aside the impugned order, allowing the appeal with relief to the appellants.
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