2008 (3) TMI 165 - AT - Customs

Enhancement of transaction value of goods (imported toiletries cosmetics and CD lens cleaners) on the basis of the value of certain contemporaneous ship stores imports and on the basis of retail price list is not justified - No other material was found by the original authority to reject the transaction value - There was no misdeclaration of value and therefore the confiscation and penalty ordered by the original authority have been set aside

Summary

Issues:
1. Valuation of imported goods
2. Confiscation and penalty under Customs Act
3. Misdeclaration of country of origin
4. Sequential application of valuation rules
5. Appeal against appellate authority's decision

Valuation of imported goods:
The case involved the import of toiletries, cosmetics, and CD lens cleaners from Dubai, with a declared value of US $7992.45. Customs authorities proposed to enhance the value to Rs. 12,99,259 based on contemporaneous ship stores imports and retail price list in Singapore. The original authority enhanced the value under Rule 5 of the Customs Valuation Rules, 1988. The appellate authority found no material to reject the declared value, leading to the setting aside of the enhancement of value, confiscation, and penalty.

Confiscation and penalty under Customs Act:
The customs authorities proposed confiscation of toiletries and cosmetics under Section 111(d) and (m) of the Customs Act, along with a penalty under Section 112. The original authority ordered confiscation, redemption against payment of a fine, and imposed a penalty. However, the appellate authority set aside the confiscation and penalty due to the absence of misdeclaration of value.

Misdeclaration of country of origin:
The appellant argued that the declared value was not in line with the provisions of Section 14 of the Customs Act due to misdeclaration of the country of origin. They specifically mentioned CD lens cleaners and suggested that the matter should have been remanded to the original authority for not exhausting the valuation rules sequentially. The respondents successfully defended against these grounds, stating that the declared value was acceptable without any basis for rejection.

Sequential application of valuation rules:
The appellant raised concerns about the sequential application of valuation rules by the original authority and the silence regarding CD lens cleaners in the appellate Commissioner's order. However, the respondents argued that the original authority did not order confiscation of CD lens cleaners, and therefore, the appellant could not challenge the appellate authority's decision on this matter.

Appeal against appellate authority's decision:
After considering all submissions, the appellate tribunal found that the grounds raised in the appeal were adequately addressed by the respondents. The Commissioner (Appeals) rightfully accepted the declared value, leading to the dismissal of the appeal. The tribunal concluded that there was no misdeclaration of value, justifying the setting aside of confiscation and penalty orders.

---