1988 (6) TMI 160 - AT - Customs

Summary

Issues Involved:
1. Mis-declaration of the description of goods.
2. Under-valuation of the imported goods.
3. Imposition of redemption fine and penalty.
4. Proper valuation of the goods for customs duty assessment.

Issue-wise Detailed Analysis:

1. Mis-declaration of the Description of Goods:

The appellants imported goods described as "Methyl Acrylate Polymer Shinkolite P-MDP" in the bill of entry, which was supported by an invoice, bill of lading, and certificate of origin. However, chemical analysis revealed the goods to be "Polymethyl Methacrylate." The sale note dated 2-3-1985 described the goods as "Methyl Acrylate Polymer," which was referenced in all import documents. The appellants argued that the correct description was in a subsequent sale note dated 12-4-1985, but this was not quoted in any submitted documents. The tribunal concluded that "Mis-declaration of the description of the goods is established beyond any doubt."

2. Under-valuation of the Imported Goods:

The Department alleged under-valuation based on a comparison with a consignment imported by M/s. Lumax Industries Ltd. at US $ 1475 PMT, while the appellants declared a value of US $ 600 PMT. The appellants provided evidence of three other consignments with prices ranging from US $ 710 to US $ 728 PMT. The Additional Collector did not provide reasons for rejecting these comparable prices. The tribunal noted, "It was necessary for the adjudicating authority to give his findings as to why the price of any of the three consignments relied on by the appellants was not acceptable to him."

3. Imposition of Redemption Fine and Penalty:

The Additional Collector imposed a fine of Rs. 1 lakh in lieu of confiscation and a penalty of Rs. 3 lakhs under Section 112 of the Customs Act. The tribunal set aside these penalties, stating, "The redemption fine and penalty imposed by the Additional Collector are also set aside subject to our findings in paragraph 7 of this order." The tribunal allowed the adjudicating authority to re-determine the fine and penalty upon re-examination of the valuation but specified that they "should not exceed the fine and penalty imposed in the impugned order."

4. Proper Valuation of the Goods for Customs Duty Assessment:

The tribunal found that the valuation needed re-examination. They emphasized the necessity of adhering to Section 14(1)(a) and (b) of the Customs Act, which outlines the criteria for determining the value of imported goods. The tribunal remanded the case for "de novo examination of the valuation of the goods in accordance with law," instructing the adjudicating authority to consider the comparable prices provided by the appellants and to provide a reasoned decision.

Conclusion:

The tribunal concluded by setting aside the impugned order and remanding the case to the Additional Collector of Customs for re-examination of the valuation, redemption fine, and penalty. They affirmed the mis-declaration of the description of the goods but required a fresh assessment of the valuation and related penalties. The duty on the imported goods should be charged at the rate applicable to the goods as determined by the Customs House Laboratory. The appeal was disposed of in these terms.