2005 (2) TMI 202 - AT - Central Excise

Valuation (Customs) - Clearance of door locks and lock cylinders and lock accessories - Penalty - Onus to prove - NIDB data shows that cylindrical locks have been cleared at higher value - HELD THAT - The Revenue has not controverted the findings in the impugned order that (1) catalogue of foreign supplier shows imported locks as door locks, and (ii) Certificates from the supplier and All India Lock Manufacturers Association certify the locks to be door locks. We also observe that the Revenue has taken a print out of Godrej Locks from Internet and compared the same with imported locks to reach the conclusion that the impugned locks are cylindrical locks. There is no physical examination of door locks imported vis-a-vis the cylindrical locks manufactured by M/s. Godrej. Thus, we do not find any reason to interfere with the finding of the Commissioner (Appeals) regarding the impugned door be door locks. Regarding determination of value of the impugned goods also, Revenue has not brought any material to discard the findings in the impugned order. We are in full agreement with the findings contained in the impugned Order. Merely non-production of manufacturer's invoice by the Respondents would not make the transaction value unacceptable. The initial onus is on the Revenue to show that the transaction value is not correct value. The Revenue has not succeeded in establishing that the declared transaction value is not correct. In view of this, we reject the Appeal filed by Revenue.

Summary

Issues involved: Appeal against misdeclaration and enhancement of value of imported goods.

Misdeclaration of goods:
The Revenue filed an Appeal against the Order-in-Appeal setting aside charges of misdeclaration and value enhancement of goods imported by M/s. Modern Overseas. The Department's view was that the imported goods declared as "door locks" were actually cylindrical locks, based on physical examination and market enquiry. However, the Commissioner (Appeals) held that the imported goods were indeed door locks, supported by a Certificate from the foreign supplier and the All India Lock Manufacturers Association. The NIDB data was deemed vague as it did not specify the type of locks. The Respondents argued that a lock cylinder can be used in various locks, making them cylindrical locks, and provided a catalogue to establish they imported only door locks.

Value determination of imported goods:
Regarding the value of the imported goods, the Revenue failed to provide sufficient evidence to reject the findings of the impugned order. The Commissioner (Appeals) noted that the NIDB data was vague and could not be used as a basis for rejecting the transaction value. It was emphasized that the burden of proof lies on the department to show that the invoice value does not reflect the true commercial value in the international market. The Tribunal agreed with the findings of the impugned order, stating that non-production of the manufacturer's invoice does not render the transaction value unacceptable. The Revenue did not establish that the declared transaction value was incorrect, leading to the dismissal of the Appeal.

This judgement highlights the importance of providing clear evidence in cases of misdeclaration and value determination of imported goods, emphasizing the burden of proof on the department to justify any discrepancies in the declared values.