1989 (4) TMI 226 - AT - Customs

Summary

Issues Involved:
1. Validity of the licence for covering the goods.
2. Quality of the goods (prime quality or second quality).
3. Valuation of the goods.
4. Excess quantity found.

Issue-wise Detailed Analysis:

1. Validity of the Licence for Covering the Goods:
The original licence was issued to M/s Ganpathy Exports Ltd. and transferred to M/s National Engineering Works, which then issued a letter of authority to the appellants. Despite action being contemplated against the licence, it remained valid at the time of import. The appellants argued that the transaction was concluded before the suspension order was issued. The Tribunal referenced the Supreme Court's judgment in East India Chemical Co. v. Collector of Customs, which held that a licence obtained by fraud is voidable but remains valid until officially cancelled. The Tribunal concluded that the licence was valid at the time of import, thus the goods were imported under a valid licence.

2. Quality of the Goods (Prime Quality or Second Quality):
The appellants claimed the goods were second grade due to defects, supported by a test certificate from the Japanese supplier. However, the Customs authorities, based on a test by Cochin Shipyard, determined the goods were of prime quality. The Tribunal noted the unusual nature of the transaction, including the lack of correspondence and the delayed invoice date. The test parameters (gauge and galvanising defects) were consistent with the appellants' claims, but the Cochin Shipyard's report indicated satisfactory quality. The Tribunal found the appellants' evidence insufficient and upheld the Customs' determination that the goods were of prime quality.

3. Valuation of the Goods:
The Collector assessed the value based on recorded prices from another Customs House, which the appellants contested. The Tribunal noted that the Collector failed to provide contemporaneous import evidence or full details of the basis for valuation, denying the appellants an opportunity to contest it. This was deemed a denial of natural justice. Consequently, the Tribunal set aside the Collector's valuation findings and remanded the matter for re-adjudication with proper disclosure and opportunity for the appellants to present their case.

4. Excess Quantity Found:
The Customs authorities found the weight of the consignment to be higher than declared, based on a test weighment of ten coils. The appellants accepted the excess weight for duty payment but later contested it. The Tribunal noted that the appellants had accepted the test weighment and paid the duty accordingly, thus their subsequent contestation was not maintainable. The Tribunal dismissed the appellants' plea regarding the excess weight.

Conclusion:
The Tribunal upheld the validity of the licence at the time of import and confirmed the goods were of prime quality based on the evidence. However, it set aside the valuation findings due to procedural deficiencies and remanded the matter for re-adjudication. The appellants' plea regarding excess weight was dismissed, affirming the Customs' assessment. The appeal was partially allowed, focusing on the need for a fair re-evaluation of the goods' value.