2010 (6) TMI 359 - AT - Customs

Valuation - related person - confiscation of goods - penalty of amount equal to evaded duty under Section 114A - importers had obtained the goods cheap, using their influence with the suppliers so that the project could be viable and that the suppliers had obliged them as they wished to procure bricks from the importer s factory at competitive rates in future - relationship certainly influenced the price - Held that - uphold the enhancement of the value and the duty demand together with interest - Confiscation of goods covered by all bills of entry is sustained - Appeal is rejected

Summary

Issues:
Challenge to enhancement of unit price of concrete paving blocks, determination of assessable value, differential duty demand, confiscation of goods, imposition of penalties.

Analysis:
The appeal in this case contested the increase in the unit price of 60 mm concrete paving blocks imported by the appellants, rejecting the declared value and determining the assessable value at higher rates. The Tribunal noted the relationship between the supplier and the buyer, which was not disputed, leading to doubts about the credibility of the declared unit price. The importer's statement revealed that the goods were obtained cheap due to their influence with the suppliers, influencing the price. As contemporaneous imports of identical or similar goods were absent, Rule 4, 5, 6, 7, and 7A were ruled out, and Rule 8 was applied to enhance the value. The Tribunal upheld the enhancement of value, duty demand, interest, and confiscation of goods for misdeclaration of value under Section 111(m). Penalties under Section 114A and 112(a) were also upheld for undervaluation and contravention of provisions.

The Tribunal found that the relationship between the supplier and the buyer influenced the price of the imported goods, justifying the rejection of the declared value. As per the importer's statement, the goods were obtained cheaply due to their influence with the suppliers, indicating undervaluation. In the absence of contemporaneous imports of identical goods, Rule 8 was rightly applied to determine the assessable value. The Tribunal upheld the confiscation of goods and imposition of penalties under Sections 114A and 112(a) for misdeclaration and undervaluation.

In conclusion, the Tribunal upheld the impugned order, rejecting the appeal and sustaining the enhancement of value, duty demand, interest, confiscation of goods, and imposition of penalties. The decision was based on the relationship between the supplier and the buyer, the importer's statement regarding obtaining goods cheaply, and the absence of contemporaneous imports to determine the assessable value accurately. The penalties imposed were deemed necessary under the relevant sections of the Customs Act, 1962, for undervaluation and contravention of provisions.