2002 (5) TMI 80 - AT - Customs

Summary

Issues Involved:
1. Authenticity of the invoice.
2. Findings contrary to official record.
3. Department's burden to establish higher value.
4. Contemporaneity and comparability of the manufacturer's price list.
5. Applicability of Supreme Court's ruling in Eicher Tractors case.
6. Proper application of valuation rules.

Summary:

1. Authenticity of the Invoice:
The appellants argued that the adjudicating authority exceeded the terms of remand by questioning the authenticity of the invoice. The Tribunal noted that the addendum to the SCN had already indicated the department's disinclination to consider the invoice for assessment. The Commissioner rejected the invoice as a manipulated document without examining its merits or considering the Supreme Court's judgment in Eicher Tractors. The Tribunal found no reasonable ground for dubbing the invoice as manipulated, noting no material discrepancy between the original and photocopies.

2. Findings Contrary to Official Record:
The appellants contended that some findings were contrary to the official record. The Tribunal observed discrepancies noted by the Commissioner but found no substantial reason to doubt the authenticity of the invoice.

3. Department's Burden to Establish Higher Value:
The appellants argued that the material cost of the goods was low and it was the department's burden to prove that the goods could fetch a higher price than invoiced. The Tribunal upheld this contention, noting that the department failed to disprove the appellants' claim of highly discounted prices for old stock-lot sculptures.

4. Contemporaneity and Comparability of the Manufacturer's Price List:
The appellants argued that the manufacturer's price list was not contemporaneous and the imported goods were not of comparable quality or quantity. The Tribunal agreed, noting that the price list of January 1999 was not contemporaneous for goods contracted in July 1998 and shipped in September 1998. The Tribunal found no evidence that the imported sculptures were of comparable quality and customer appeal to those in the price list.

5. Applicability of Supreme Court's Ruling in Eicher Tractors Case:
The appellants relied on the Supreme Court's ruling in Eicher Tractors, arguing that the declared price should be accepted under Rule 4(1) of the Valuation Rules. The Tribunal supported this view, noting that the department failed to establish any exceptional circumstances to reject the declared value.

6. Proper Application of Valuation Rules:
The Tribunal found that the adjudicating authority misunderstood the legal provisions for determining the value of goods. Rule 10A, a procedural provision, was incorrectly invoked after the sequential scheme of Rules 5 to 8 failed. The Tribunal held that the Commissioner should have retrospectively examined the decision to reject the declared price under Rule 10A. The Tribunal concluded that the declared price represented the transaction value under Rule 4(1), supported by the Supreme Court's ruling in Eicher Tractors.

Conclusion:
The Tribunal set aside the valuation, confiscation, redemption fine, and penalty ordered by the adjudicating authority. It directed the authority to determine the assessable value based on the declared price and release the goods upon payment of duty.