2002 (6) TMI 74 - AT - Customs

Summary

Issues involved:
The issues involved in this judgment include mis-declaration of goods, evasion of customs duty, enhancement of imported goods' value, comparison of contemporaneous imports, rejection of invoice value, and application of valuation rules.

Mis-declaration and Customs Duty Evasion:
The appellants imported second quality betel nuts from Indonesia, leading to proceedings for mis-declaration and evasion of customs duty. The Commissioner enhanced the value of the goods, ordered confiscation, and imposed penalties based on detailed orders in each case.

Comparison of Contemporaneous Imports:
The Commissioner relied on Rule 5 of the valuation rules to reject the invoice value and compared the imports with those made by M/s. Gandhi Exports and M/s. Diamond Traders. The appellants argued that the prices of agricultural products like betel nuts vary due to factors like crop yield and quality assessment, emphasizing that transaction value should not be ignored without evidence of clandestine remittance.

Legal Arguments and Precedents:
The appellants contended that the contemporaneous imports cited by the department were not comparable, citing the need for identical goods in all respects for a valid comparison. They referenced judgments emphasizing the importance of objective reasons and strong evidence to reject declared values. The department defended the order based on the Supreme Court's rulings regarding ridiculously low transaction values and the use of contemporaneous imports for assessment.

Decision and Rationale:
The Tribunal found that the imports were from Indonesia in January 2000, and the Commissioner's reliance on imports from M/s. Gandhi Exports and M/s. Diamond Traders was deemed inappropriate. The Tribunal highlighted the need for comparable imports in terms of physical characteristics, quality, and timing. It concluded that the burden of proving misdeclaration or undervaluation was not met by the department, leading to the setting aside of the impugned orders and allowing the appeals with consequential relief.