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Issues Involved:
1. Whether the imported coils fitted with expansion valves were covered by the Import Licence. 2. Whether the findings of misdeclaration of origin, description, and value of the goods were sustainable. Issue 1: Import Licence Coverage of Coils Fitted with Expansion Valves The term "consumer goods" is defined in the Import Policy for 1988-91 as consumption goods that can directly satisfy human needs without further processing. The judgment referenced the case of Susha Electronics Industries v. Collector of Customs and Central Excise, which clarified that components requiring further processing are not considered consumer goods. The cooling coils fitted with expansion valves are sub-assemblies that cannot directly satisfy human needs without further processing. Therefore, they do not fall under the category of "consumer goods" as per Serial No. 146 of Appendix 2, Part B of the Import Policy for 1990-93. However, the cooling coils and expansion valves were invoiced separately, indicating that expansion valves are not integral parts of cooling coils. The Import Licence held by the appellants covered items under Serial No. 483(6) of Appendix 3, Part A, which includes "cooling coils and tube bundles" but not sub-assemblies comprising cooling coils with attached expansion valves. Thus, the judgment upheld the confiscation of the imported sub-assemblies under Section 111(d) of the Customs Act, 1962. Issue 2: Misdeclaration of Origin, Description, and Value Regarding the misdeclaration of value, the appellants declared the unit price based on the invoice from M/s. Contax Marketing Singapore. The adjudicating authority compared this with invoices from M/s. Products International Pvt. Ltd., Singapore, and M/s. Thai Heat Exchange Co. Ltd., which showed higher prices for similar goods. However, these invoices were not contemporaneous with the disputed import. The judgment cited the case of Satya Vijay Exports Pvt. Ltd. v. Collector of Customs, which emphasized that comparison should be made with prices at the time and place of importation. The Department did not produce evidence of comparable goods imported around the same time, failing to meet the burden of proof for under-valuation. Consequently, the judgment held that the Additional Collector's order on misdeclaration of value was not sustainable. For the valuation of driers and FICD, the adjudicating authority resorted to Rule 7 of the Customs Valuation Rules, 1988, without sequentially proceeding through Rules 5 to 8, violating the mandatory requirement of Rule 3. The judgment set aside the finding of misdeclaration of value for these items. Regarding the misdeclaration of origin, the appellants declared the origin based on a certificate from the Singapore Indian Chamber of Commerce. The judgment agreed with the appellants that any violation was technical, as there was no significant difference in quality or value between goods of Japanese and Canadian origin. Conclusion: The judgment set aside the Additional Collector's order enhancing the assessable value and confiscating the goods under Section 111(m) for misdeclaration of value. However, it upheld the confiscation of sub-assemblies under Sections 111(m) and 111(d) due to misdeclaration of description and invalid Import Licence. The redemption fine was reduced from Rs. 2,00,000/- to Rs. 50,000/-, and the personal penalty on the importer was set aside. The appeal was partly allowed.
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