2004 (7) TMI 257 - AT - Customs

Summary

Issues:

1. Interpretation of entry 85239003.20 for assessment of imported goods.
2. Valuation of imported goods for customs purposes.
3. Confiscation under Sections 111(d) and 111(m) and penalty under Section 112 of the Customs Act, 1962.

Interpretation of entry 85239003.20:

The appellants imported goods seeking assessment under Heading 8523.90 of ICT and 85239003.20 for ITC. The Commissioner rejected the claim, stating that the entry covered metal tape for digital videos requiring professional quality performance and was not in the VHS format. The S.V.H.S. tapes were considered high quality, and even if the imported goods could work in SVHS VCR, they were not equivalent to the high quality of S quality VHS tapes. The appellants argued that the goods answered the description of the entry by practically demonstrating their compatibility with M.II S-VHS Video Cassette Recorder. They provided a clarification from DGFT supporting their interpretation. The Tribunal held that the entry referred to certain types of cassettes tapes and did not require the level of technological sophistication as asserted by the Commissioner. As the goods worked with MII S-VHS/Digital Type-VCR, they were deemed covered under the entry, and no confiscation was warranted under Section 111(d).

Valuation of imported goods:

Regarding valuation, the Tribunal found that all factors supporting the transaction value were valid and unchallenged. The Commissioner had not proven any actual import value at USD 1.10 as claimed. The Tribunal emphasized that transaction value could not be overturned based on quotations or proforma invoices. The proposed valuation of USD 0.70 was deemed inappropriate. Consequently, the confirmation under Section 111(m) for valuation was not upheld. Since the undervaluation charge was dismissed, confiscation under Section 111(m) and Section 111(d) for ITC offenses were also not justified. Consequently, there was no basis for imposing a penalty under Section 112 of the Customs Act, 1962. The Tribunal set aside the impugned orders and allowed the appeal.

In conclusion, the Tribunal's judgment addressed the issues of interpreting the relevant entry for assessment, determining the valuation of imported goods, and deciding on confiscation and penalty under the Customs Act, 1962. The decision favored the appellants, ruling in their favor on the interpretation of the entry and rejecting the Commissioner's valuation and confiscation claims. The Tribunal emphasized the importance of transaction value and upheld the appeal by setting aside the orders imposing penalties.