2002 (3) TMI 86 - AT - Customs

Summary

Issues Involved:
1. Misdeclaration of import and export values.
2. Compliance with value addition norms under the DEEC scheme.
3. Validity of the import licenses obtained by BBS.
4. Liability for confiscation and penalties under the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Misdeclaration of Import and Export Values:
The Commissioner alleged that BBS undervalued imported components from IGI-UAE and overvalued exports to M/s. Anker International, UK, to meet the value addition norms of the DEEC scheme. This was based on discrepancies found in invoices and purchase orders. However, the Tribunal found that there was no substantial evidence to reject the transaction values or to prove that the invoices were fabricated. The Tribunal noted that there was no evidence of any flow back of funds from BBS to the supplier, and the undervaluation claim was based on mere presumption. Additionally, the alleged overvaluation of exports was not substantiated, as the Commissioner did not have jurisdiction over the export valuations, which should be determined by the proper officer at Chennai Custom House.

2. Compliance with Value Addition Norms under the DEEC Scheme:
The Commissioner concluded that BBS did not meet the value addition norms due to the alleged misdeclaration of values. However, the Tribunal found that the Commissioner was not the proper authority to determine the value addition norms, which fall under the jurisdiction of the DGFT authorities. The Tribunal emphasized that the value addition norms could only be varied by the DGFT and that the Commissioner's calculations were not valid without proper verification from the DGFT.

3. Validity of the Import Licenses Obtained by BBS:
The Commissioner claimed that BBS obtained import licenses through misrepresentation by describing their export product as 'writing instruments' instead of 'Plastic Body Ball Points'. The Tribunal found that the import licenses were issued based on the standard input-output norms and that there was no evidence of fraud or misrepresentation in obtaining these licenses. The Tribunal held that the licenses should have been challenged and voided by the DGFT authorities if there was any misrepresentation.

4. Liability for Confiscation and Penalties under the Customs Act, 1962:
The Commissioner held that the imported goods were liable for confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962, and imposed penalties under Section 112(a). The Tribunal disagreed, noting that the import licenses were valid and that there was no substantial evidence of misdeclaration or undervaluation. The Tribunal also found that the Commissioner's reliance on the Import Trade Control Order, 1955, was misplaced as it had been superseded by the Foreign Trade (Development & Regulation) Act, 1992. Consequently, the Tribunal set aside the order of confiscation and penalties.

Conclusion:
The Tribunal concluded that there was no substantial evidence to support the allegations of misdeclaration, undervaluation, or overvaluation. The import licenses obtained by BBS were valid, and the value addition norms were not within the Commissioner's jurisdiction to determine. The order of confiscation and penalties was set aside, and the appeals were allowed.