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Issues: Valuation of imported goods, Confiscation under Customs Act, Allegation of contravention of Import Policy, Examination of goods, Bias in examination report, Confiscation without imposing penal liabilities
The judgment by the Appellate Tribunal CESTAT, Mumbai involved multiple issues regarding the valuation and clearance of imported goods. The appellants had imported various items, including a computer system, printers, and display units, supplied by a company from the USA. The Customs officer and an expert from a government undertaking examined the goods and raised objections regarding the age of a printer and the declared value. The Collector of Customs initiated proceedings, ordering confiscation of the goods under Section 111(d) and (m) of the Customs Act, with an option to clear the goods on payment of a fine. The appellants complied and appealed the decision. Upon review, the Tribunal found errors in the Collector's valuation methodology. The Collector had relied on invoices from a different transaction involving a different model, which were not suitable for comparison under Section 14 of the Customs Act. The Tribunal noted discrepancies in prices and configurations, emphasizing that local sale invoices do not reflect international trade prices. The Tribunal also highlighted the lack of justification for not considering a well-known price list, indicating that price variations among suppliers were relevant to valuation. Regarding the allegation of contravention of the Import Policy, the Tribunal found that the objection was not communicated to the importers, rendering the Collector's findings beyond the scope of charges. The Tribunal also addressed the examination of goods, noting discrepancies in reports and possible bias in the examination process. The burden of proving the goods were "old and used" was not met by the Department. Ultimately, the Tribunal concluded that the valuation loading and allegations of old and used goods were not substantiated, leading to the setting aside of the confiscation under Section 111(d) and (m). The Tribunal also observed the absence of penal liabilities imposed by the Collector, hinting at possible bias. The appeal was allowed, and the order for valuation and confiscation was set aside with consequential benefits granted to the appellants.
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