1997 (9) TMI 118 - HC - Customs

Summary

Issues Involved:
1. Legality of the confiscation order and imposition of differential duty and penalty.
2. Validity of the valuation of imported goods.
3. Adherence to principles of natural justice.

Summary:

1. Legality of the confiscation order and imposition of differential duty and penalty:
The petitioner challenged Order No. SIB/11/95-Cus., dated 3-4-1996, passed by the Commissioner of Customs, which held the goods liable for confiscation u/s 111(d) and (m) of the Customs Act, 1962. The goods were not available for confiscation, so a revised differential duty of Rs. 9,96,212/- and a penalty of Rs. 5 lakhs were imposed.

2. Validity of the valuation of imported goods:
The petitioner, engaged in assembling photocopying machines, imported components from Singapore. The initial consignment was cleared with a duty of Rs. 1,80,411/-. For the subsequent consignment, duty of Rs. 3,66,769/- was paid, and goods were released. However, the Directorate of Revenue Intelligence (DRI) detained the goods, suspecting undervaluation. The Commissioner of Customs relied on a proforma invoice from M/s. Copy Kits Trading Co. Ltd., Singapore, and an expert opinion to conclude that the declared value was manipulated. The petitioner argued that no opportunity was given to cross-examine the expert, and the proforma invoice was not a contemporaneous document evidencing a transaction of similar goods.

3. Adherence to principles of natural justice:
The court noted that the petitioner was denied the opportunity to cross-examine the expert, Shri Gopalakrishnan, whose credentials were not verified. This denial violated the principles of natural justice. The court emphasized that u/r 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, the transaction value should be the price actually paid or payable. The court found that the Commissioner relied on irrelevant evidence (proforma invoice) and ignored relevant evidence (earlier import transactions).

Conclusion:
The court set aside the impugned order (Ext. P14) due to reliance on irrelevant evidence and violation of natural justice principles. The Original Petition was allowed, and no costs were imposed.