1985 (2) TMI 152 - AT - Customs

Summary

Issues Involved:
1. Alleged Undervaluation of Imported Goods
2. Determination of Assessable Value under Section 14 of the Customs Act
3. Relevance of Market Price vs. Invoice Price
4. Evidence of Comparable Imports
5. Adjudication Process and Remand

Detailed Analysis:

1. Alleged Undervaluation of Imported Goods:
The appellants, M/s Maheshwari Trading Corporation, filed a Bill of Entry for zip fasteners, declaring their value as 0.97 Singapore dollars per dozen. The Customs authorities suspected undervaluation and issued a Show Cause Notice asserting that the declared value was lower than the market price and catalog price from M/s YKK Zippers (Singapore) Pvt. Ltd. The appellants denied undervaluation, arguing that the assessable value should be based on the price in international trade, not the Indian market price.

2. Determination of Assessable Value under Section 14 of the Customs Act:
The appellants contended that under Section 14, the assessable value should be the price at which goods are ordinarily sold in international trade. The Collector, however, rejected the invoice value, fixing the value at Rs. 0.50 paise per piece based on market inquiries and catalog prices. The Central Board of Excise and Customs upheld this decision, stating that the appellants could not claim a lower price as the basis for assessment.

3. Relevance of Market Price vs. Invoice Price:
The appellants argued that the invoice price was genuine and comparable imports had been cleared at the same price. The Department maintained that the market price in India was relevant, and the invoice price did not reflect the true value. The Collector and the Board relied on market inquiries and catalog prices, rejecting the invoice price.

4. Evidence of Comparable Imports:
The appellants provided evidence of other imports at similar prices, which were not considered by the Board. The Department argued that the documents were not produced before the adjudicating authority and that the invoice price was not reliable. The appellants insisted that the goods were of Singapore origin, and the Department had not proven otherwise.

5. Adjudication Process and Remand:
The majority judgment accepted the appeal, stating that the Department had not effectively proven undervaluation and that the appellants' evidence of other imports at similar prices was credible. The dissenting opinion suggested remanding the matter for de novo adjudication to allow both parties to adduce evidence of the market price at the time and place of importation.

Conclusion:
The appeal was allowed with consequential relief, as the majority found that the Department had not substantiated the claim of undervaluation and that the appellants' invoice price should be accepted. The dissenting opinion recommended a remand for further evidence and adjudication.