2008 (6) TMI 167 - AT - Customs

Enhancement of value of goods on ground that price declared in the invoice was much lower than the value declared in the export declaration filed in Hong Kong - importers had produced invoices of contemporaneous imports at prices comparable with the prices declared by the appellants foreign supplier has satisfactorily explained that price initially shown in the export declaration was incorrect and was subsequently amended and accepted by Hong Kong Customs enhancement of value not justified

Summary

Issues:
1. Misdeclaration and suppression of value leading to evasion of customs duty.
2. Reliability of export declarations for enhancing value.
3. Adjudication by the Commissioner including confiscation of goods and imposition of penalties.
4. Retraction of statements by the accused and reliance on confessional statements.

Analysis:
1. The case involved misdeclaration and suppression of value by an importer, leading to the evasion of a significant amount of customs duty. The importers had imported goods at undervalued prices, which were established through investigations. The value declared in the import invoices did not meet the criteria set by the Customs Act and Valuation Rules, necessitating the recovery of evaded customs duty.

2. The reliance on export declarations by the department for enhancing the value of imported goods was challenged by the appellants. It was argued that the export declarations could not be considered reliable evidence for loading the value, as the foreign supplier had rectified the incorrect prices mentioned in the declarations and paid penalties to the Hong Kong Customs. The Tribunal found that the export declarations were not a sufficient basis for enhancing the value of the goods.

3. The Commissioner had adjudicated the case, confirming the differential duty, confiscating the goods, and imposing penalties on the importer and related individuals. However, the Tribunal, after hearing both sides and examining written submissions, disagreed with the Commissioner's decision. It was held that the evidence presented did not conclusively prove misdeclaration or enhancement of value, leading to the setting aside of the impugned order.

4. The case also involved the retraction of statements by the accused individuals, which had been relied upon by the department. The Tribunal noted that the retracted statements could not be considered voluntary and truthful, especially regarding the market value of the imported goods. Additionally, the importers had provided invoices of contemporaneous imports at comparable prices, further supporting their case. The Tribunal ultimately ruled in favor of the appellants, overturning the decision of the Commissioner and granting them relief as per the law.

This detailed analysis of the judgment highlights the key issues of misdeclaration, reliance on export declarations, adjudication by the Commissioner, and the retraction of statements, providing a comprehensive understanding of the legal complexities involved in the case.