1988 (3) TMI 312 - AT - Customs

Summary

Issues:
1. Validity of the license for importation of goods.
2. Correctness of the enhanced values declared by the customs.

Detailed Analysis:

Issue 1: Validity of the license for importation of goods
The appellants imported goods described as components for Auto Topless Umbrella Frames and spare parts under two Bills of Entry. The Customs Department contended that the license produced by the appellants was invalid for importing the goods and that the declared value was undervalued. Show cause notices were issued to the appellants on both grounds. The Collector adjudicated the case against the appellants, confiscating the goods under Section 111(d) of the Customs Act. The Collector increased the assessable value of the imported goods and imposed fines and penalties. The appellants argued that the license covered the goods as spare parts and that the Customs Department had previously accepted similar licenses for similar goods. They contended that the Umbrella Frames were component parts, not complete umbrellas. The tribunal held that the license was valid for the importation of the goods as per the changed ITC policy and set aside the order regarding licensing based on past customs practices and a judgment of the Calcutta High Court.

Issue 2: Correctness of the enhanced values declared by the customs
Regarding the valuation of the imported goods, the Customs Department argued that the declared values were significantly low, raising suspicions of undervaluation. The appellants claimed that the declared values were correct and that there was no evidence of clandestine remittance to the exporter. The tribunal noted discrepancies in the declared values compared to prices from other importations and the lack of correspondence between the appellants and the exporter. The Customs relied on prices from other suppliers to determine the assessable value of the goods. The tribunal upheld the customs' valuation, considering the possibility of inferior quality goods and the lack of supporting documentation for the declared values. The tribunal rejected the appeal concerning the valuation, affirming the customs' assessment. As a result, fines and penalties related to licensing were set aside, and duty was to be paid at the enhanced value determined by customs.

In conclusion, the tribunal upheld the validity of the license for importation but affirmed the customs' valuation of the goods, rejecting the appeal on valuation grounds. The fines and penalties related to licensing were set aside, and duty was to be paid at the enhanced value fixed by customs.