2011 (4) TMI 1003 - AT - Customs

Valuation - contemporaneous import - nature of goods i.e. whether goods are Stock Lot or otherwise - held that - in the present case impugned goods have not been declared as stock lots and same have not been found so on examination also. - Decided against the assessee. We are, however, not fully satisfied with the methodology adopted by the department on the quantification of duty demand on the past consignments inasmuch as this method does not appear to be sound. We find that two different methods have been adopted by the Revenue in respect of the goods covered by the past consignments - value of some taken on gross basis and some on kg. basis. We are of the view that the total quantity of glass chatons and total quantity of glass beads imported in the past 15 consignments should be segregated, thereafter the quantity of Swarovski glass chatons and glass beads seized from the premises of the appellants should be deducted from the total quantity of the glass chatons and glass beads. This will give net quantity of Swarovski glass chatons and beads i.e. the goods which are not available with the department. Based on the base price of glass Chatons and glass beads as indicated above, duty should be worked out on gross basis on the past consignments which are not available.

2015 (10) TMI 2142 - AT

Issues Involved:
1. Alleged undervaluation of imported glass beads and chatons.
2. Rejection of transaction value by the Commissioner.
3. Validity of statements and retractions by the importer.
4. Role of M/s. Mushrif Trading Est. and its invoices.
5. Determination of value of goods.
6. Application of contemporaneous imports.
7. Calculation of freight and insurance.
8. Applicability of extended period for duty demand.
9. Determination of value for live consignments.
10. Correctness of penalties and fines imposed.

Detailed Analysis:

1. Alleged Undervaluation of Imported Glass Beads and Chatons:
The appellants were accused of undervaluing glass beads and chatons imported from M/s. Swarovski and M/s. Preciosa to evade customs duty. The department alleged that the goods were imported via Dubai through M/s. Mushrif Trading Est., which issued lower value invoices.

2. Rejection of Transaction Value by the Commissioner:
The Commissioner rejected the transaction value, citing that the goods were undervalued based on the printed price lists of M/s. Swarovski and M/s. Preciosa, which specified prices on a gross basis. The Commissioner relied on the statements of the importer and correspondences between the importer and the manufacturers.

3. Validity of Statements and Retractions by the Importer:
The importer, Shri Suresh Punjabi, gave multiple statements under Section 108 of the Customs Act. The statement dated 9-5-1996 admitted to undervaluation but was later retracted. The Commissioner found the retraction to be an afterthought and upheld the statements as valid evidence, supported by documentary evidence.

4. Role of M/s. Mushrif Trading Est. and Its Invoices:
The department argued that M/s. Mushrif Trading Est. was a front created by the importer to issue lower value invoices. Correspondences indicated that M/s. Mushrif Trading Est. acted as a forwarding agent, and invoices from this entity were not accepted as genuine.

5. Determination of Value of Goods:
The value of the goods was determined based on the printed price lists of M/s. Swarovski and M/s. Preciosa. The Commissioner found that the goods were not stock lots and should be valued on a gross basis as per the price lists. The Tribunal upheld this determination for Swarovski goods but extended the benefit of doubt for Preciosa goods.

6. Application of Contemporaneous Imports:
The department cited six instances of contemporaneous imports to support the valuation based on the price lists. These imports were on a gross basis, consistent with the price lists of M/s. Swarovski.

7. Calculation of Freight and Insurance:
The appellants argued that the department erroneously added 20% freight and 1.125% insurance to the FOB value. The Tribunal upheld the department's calculation in the absence of any data provided by the appellants.

8. Applicability of Extended Period for Duty Demand:
The Tribunal upheld the application of the extended period under Section 28(1) of the Customs Act, citing misdeclaration of the value of goods by the importer.

9. Determination of Value for Live Consignments:
The value of the live consignments was determined based on the price lists and the examination reports. The Tribunal found no infirmity in the method adopted for determining the assessable value of the live consignments.

10. Correctness of Penalties and Fines Imposed:
The Tribunal found the penalties and fines imposed to be excessive and reduced them. The fine for the live consignment was reduced to Rs. 4,00,000, and the penalties on M/s. Sunny Syndicate and Shri Suresh Punjabi were reduced to Rs. 1,00,000 and Rs. 50,000, respectively.

Conclusion:
The Tribunal upheld the Commissioner's order regarding the valuation of Swarovski goods but set aside the order for Preciosa goods. The matter was remanded for redetermination of value and requantification of duty for past consignments, with directions to provide the appellants an opportunity to be heard. The penalties and fines were adjusted accordingly.

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