2007 (6) TMI 62 - AT - Central Excise

Valuation(Central excise) - Alleged that the imported consignments had been mis-declared both in regard to description and value and accordingly demand were made along with penalty - Held that allegation was not correct and set aside

Summary

Issues Involved:

1. Mis-declaration of the description of imported polycarbonate sheets.
2. Mis-declaration of the value of imported polycarbonate sheets.
3. Imposition of penalties and confiscation of goods.

Issue-wise Detailed Analysis:

1. Mis-declaration of the Description of Imported Polycarbonate Sheets:

The core issue revolved around whether the imported polycarbonate sheets were mis-declared as regenerated/recycled instead of prime quality. The Directorate of Revenue Intelligence (DRI) initiated an investigation based on information that importers were evading customs duty by mis-declaring the description and value of polycarbonate sheets. The Commissioner (Adjudication) found that the imported sheets were prime quality and not recycled, as evidenced by statements from industry experts and test reports. However, the appellant contended that the goods were always described as polycarbonate sheets in import documents without specifying them as recycled or regenerated. The Tribunal noted that no customs documents described the goods as recycled/regenerated, thus concluding that the mis-declaration charge was unsupported by the customs documents. The Tribunal emphasized that the evidence from the appellant's business correspondence with the Korean supplier, which highlighted defects and complaints about the quality of the imported sheets, supported the appellant's claim that the goods were sub-standard and not prime quality. Consequently, the Tribunal held that the finding of mis-declaration regarding the description was unsustainable.

2. Mis-declaration of the Value of Imported Polycarbonate Sheets:

The Commissioner had determined the assessable value based on the lowest average export price from Korea to India during 2000-2001, which was significantly higher than the declared value. The appellant argued that the Commissioner's method of using an average price for a year was impermissible and that the value should be based on specific imports of particular varieties. The Tribunal agreed with the appellant, noting that the Commissioner's reliance on general data and information from other countries was not a valid basis for re-assessment. The Tribunal found that there was no direct evidence indicating that the purchases were made at a higher price or that payments in excess of the invoice prices had occurred. Therefore, the Tribunal concluded that the finding of undervaluation was also unsustainable.

3. Imposition of Penalties and Confiscation of Goods:

Given the Tribunal's findings that the charges of mis-declaration of description and value were not substantiated, the demand for short-levied duty, confiscation of goods, and imposition of penalties were set aside. The Tribunal allowed the appeals, providing consequential relief to the appellants.

Conclusion:

The Tribunal concluded that the allegations of mis-declaration of the description and value of the imported polycarbonate sheets were not supported by the evidence on record. Consequently, the demands for duty, confiscation of goods, and penalties imposed on the appellants were set aside, and the appeals were allowed with consequential relief.