2008 (1) TMI 236 - AT - Customs

Allegation of undervaluation on basis of contemporaneous import held that insurance memos cannot be relied upon for the purpose of holding that the goods were under valued - value of contemporaneous imports cannot be taken as the basis for determination of AV if the imports are not on the same commercial level & are not of same quantities - enhancement of value not justified - department has not established that the goods were under invoiced, confiscation, demand & penalty are not sustainable

Summary

Issues: Valuation of imported goods, contemporaneous imports, under-valuation, confiscation, penalty

In this case, the appellants imported Glue Sticks and Glue Guns from a supplier in Taiwan in three consignments. The Customs department suspected under-valuation based on higher prices of similar goods imported by other companies around the same time. The department issued a show cause notice proposing loading of value, penalty, and confiscation of goods. The Commissioner enhanced the value of the imported goods and imposed duty, interest, and penalty. The appellants appealed against this decision.

Upon hearing both sides, the Tribunal considered the evidence presented. The Tribunal noted that the insurance memos could not be relied upon to prove under-valuation. It also observed that the contemporaneous imports by other companies were not at the same commercial level as the imports by the appellants. The Tribunal found that the goods supplied to the appellants differed in quality from those supplied to the other companies. Relying on previous Tribunal decisions, the Tribunal concluded that the loading based on contemporaneous imports was not justified. Therefore, the Tribunal set aside the duty demand, penalty, and confiscation, ruling in favor of the appellants.

In conclusion, the Tribunal found that the department had not proven under-valuation of the imported goods. The decision to enhance the value, impose duty, interest, and penalty was overturned. The Tribunal allowed the appeals of the appellants, setting aside the impugned order and ruling in their favor.