1991 (11) TMI 132 - AT - Customs

Issues Involved:
1. Enhancement of the value of 'Synthetic Polycarbonate'
2. Allegation of misdeclaration of goods
3. Relationship between the appellant and the supplier
4. Confiscation and penalty

Detailed Analysis:

1. Enhancement of the value of 'Synthetic Polycarbonate':

The appeal was against the Collector's order enhancing the value of 'Synthetic Polycarbonate' from US $ 2500 per MT CIF to US $ 3200 per MT CIF. The appellants contended that the Collector's reliance on imports by M/s. Ram Exports to enhance the value was misplaced as those imports were neither similar nor identical goods. The Collector had also ignored relevant imports made by the appellants from M/s. Greaves Cotton & Co. Ltd. The Tribunal found that the appellants had previously paid US $ 3200 per MT CIF in November 1989 for similar imports, and there was no evidence that prices had fallen by February 1990. Therefore, the Collector was justified in determining the assessable value at US $ 3200 per MT CIF for two bills of entry.

2. Allegation of misdeclaration of goods:

The Collector alleged that the appellants misdeclared the goods as "Polycarbonate Synthetic Resin Mixes" instead of "job lot." The Tribunal examined the telex messages, invoices, and bills of entry. It found that while the initial telex messages mentioned "job lot," the subsequent confirmation letter, invoices, and certificate of origin did not. The physical examination of the goods revealed that two bills of entry contained colorless material, while one bill of entry contained mixed colors. Thus, the Tribunal concluded that there was a misdeclaration for two bills of entry but accepted the transaction value of US $ 2500 for the third bill of entry, which contained mixed goods.

3. Relationship between the appellant and the supplier:

The Collector held that the appellants and the supplier were related persons, influencing the price. The Tribunal referred to Rule 2 sub-rule 2 of the Customs Valuation Rules, 1988, which defines related persons. It concluded that the appellants and the supplier did not fall within any of the categories listed in the rule. Specifically, it was difficult to hold that a brother is a related person within the meaning of Rule 2 sub-rule (2). Therefore, the Tribunal agreed with the appellants that they were not related persons.

4. Confiscation and penalty:

The Collector had confiscated the goods under Section 111(m) of the Customs Act and imposed a penalty of Rs. 1 lakh under Section 112(a). The Tribunal, having found misdeclaration for two bills of entry and confirming the higher valuation, reduced the redemption fine to Rs. 1 lakh. Since the invoice value was accepted for one bill of entry, the penalty was reduced to Rs. 2.5,000/-. The appeal was thus partly allowed.

Conclusion:

The Tribunal upheld the Collector's decision to enhance the value of the goods for two bills of entry based on the appellants' own previous imports. It found misdeclaration in two bills of entry but accepted the transaction value for the third bill of entry. The appellants and the supplier were not deemed related persons under the Customs Valuation Rules. The confiscation was upheld with a reduced redemption fine, and the penalty was also reduced. The appeal was partly allowed.

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