2017 (10) TMI 474 - AT - Customs

Valuation of imported goods - semi-precious gems cubic Zerconia of all sizes from 1.00 mm to 3.00 mm - rejection of declared value - Held that - The revaluation of the imported goods has been done by the duly constituted Committee by the Commissioner of Customs. The Valuation Committee was constituted in pursuance of Rule 9(1) Rule 6 and Rule 4(1) of Customs Valuation Rules and the opinion of experts were also obtained - out of the three members, majority of two members was from the trade who were expert in examining the grade, quality of stones and true prices thereof. Thus, the opinion of independent experts was duly obtained for arriving at the correct assessable value. It was also observed that Shri D K Bangad, apart from being an officer, was also a qualified stones expert and since he was not anyway involved in the investigation / adjudication of this case, he was also an independent Member - the valuation of the imported goods has been done as per law - appeal dismissed - decided against appellant.

Summary

Issues:
1. Valuation of seized goods
2. Confiscation of goods and demand for differential duty
3. Modus operandi of under-valuing imported goods
4. Rejection of declared transaction value
5. Revaluation of imported goods by the Valuation Committee

Valuation of seized goods:
The appellants challenged the valuation of seized goods, arguing that the valuation report was not properly done. They contended that the goods seized were of smaller sizes than those indicated in the valuation report. The appellants also questioned the validity of the valuation adopted by the Committee, stating that the report was not provided to them. However, the Department justified the valuation, alleging that the appellants had a strategy to under-value the imported gems.

Confiscation of goods and demand for differential duty:
The appellants imported semi-precious gems of various sizes and were found to pack them in branded packing material to sell at higher prices. The Department confiscated the goods, justifying their actions based on the under-valuation of the imported goods. The partner of the appellants admitted to the under-valuation, and the modus operandi of the appellants was established.

Modus operandi of under-valuing imported goods:
The appellants were discovered to be importing semi-precious gems and branded packing material separately. They packed the gems in branded pouches to increase their selling price. The partner admitted to the under-valuation, and the Department rejected the declared transaction value, citing the separate importation of branded gems and packing material.

Rejection of declared transaction value:
The Department rejected the declared transaction value in the Bill of Entry due to the separate importation of branded gems and packing material, which were used to pack the gems for sale at inflated prices. The under-valuation was acknowledged by the partner, leading to the rejection of the assessable value.

Revaluation of imported goods by the Valuation Committee:
A Valuation Committee, comprising experts from the trade, was constituted to revalue the imported goods. The majority of the members were experts in examining the quality and prices of stones. The Committee's revaluation was deemed valid, especially since the partner admitted to the under-valuation. The Tribunal upheld the impugned order, dismissing the appeals.

In conclusion, the Tribunal found no issues with the impugned order, upholding the decision to confiscate the goods and demand differential duty based on the under-valuation of the imported goods. The revaluation by the Valuation Committee was considered valid, given the expertise of the members and the partner's admission to the under-valuation.