2019 (1) TMI 1696 - AT - Customs

Valuation of imported goods - saffron - rejection of declared value - enhancement of value based on contemporaneous imports - case of appellant is that the test report, relied upon to arrive at the finding of misdeclaration of the grade, was obtained from a private laboratory and is further handicapped by lack of reference to quantity, Customs seal no. and the gradation of the tested saffron - HELD THAT - The defence of the appellant rests upon the difference between the outcome of the test on the samples drawn at the place of export and that effected at place of import. The challenge to the credibility of the test report in India arises from the failure of the customs authorities to get the saffron tested in a Government laboratory. The appellant had failed to insist on samples of the seized goods for testing by them and disputing the credibility of the test relied upon in the adjudication order without taking such precautions on their part is but a flimsy objection. Furthermore, the appellant has not questioned the value adopted for computation of the differential duty. In view of the applicability of the test report, as well as the failure to challenge the value adopted, the dispute over the demand of additional duty liability and its consequential detriment will not sustain - Appeal dismissed - decided against appellant.

Summary

Issues:
Enhancement of value of imported saffron, confiscation under Section 111(m) of Customs Act, 1962, imposition of penalty under Section 112 of Customs Act, 1962, misdeclaration of grade, reliance on private laboratory test report, credibility of test report, failure to challenge value adopted for computation of differential duty.

Enhancement of Value and Confiscation:
The appeal was against the enhancement of the value of saffron imported and its subsequent confiscation under Section 111(m) of the Customs Act, 1962. The imported saffron was initially valued at a lower amount but was later assessed at a significantly higher value, leading to the imposition of a fine for redemption. The differential duty was calculated based on the enhanced value derived from the price declared for contemporaneous imports.

Misdeclaration of Grade and Test Report:
The appellant contested the misdeclaration of the saffron grade, arguing that the test report used to determine the grade discrepancy was obtained from a private laboratory. They highlighted deficiencies in the test report, such as the lack of reference to quantity, Customs seal number, and the gradation of the tested saffron. The appellant also claimed that the test report submitted for export clearance was not considered by the adjudicating authority.

Credibility of Test Report and Value Challenge:
The appellant's defense centered on the difference in test outcomes between samples taken at the export location and those tested upon import. They criticized the credibility of the test conducted in India due to the absence of testing in a Government laboratory. The appellant's failure to request samples for independent testing was noted, and their objection to the test report's credibility was deemed unsubstantiated. Additionally, the appellant did not dispute the value used for calculating the differential duty, further weakening their position.

Judgment and Dismissal of Appeal:
The Tribunal upheld the reliance on the test report and noted the appellant's failure to challenge the adopted value for duty computation. Consequently, the appeal was deemed without merit and dismissed. The dispute regarding the additional duty liability and its implications was not sustained due to the test report's validity and the lack of challenge to the value assessment. The judgment was pronounced on 17-1-2019 by the Tribunal.