1993 (7) TMI 172 - AT - Customs

Issues Involved:
1. Waiver of pre-deposit
2. Valuation of goods under Section 14 of the Customs Act, 1962
3. Evidentiary value of the telex indicating the price of goods
4. Allocation of excess goods
5. Release of goods pending adjudication

Detailed Analysis:

1. Waiver of Pre-deposit:
The Tribunal granted a waiver of pre-deposit for the differential duty and penalties levied in the impugned order until the disposal of the appeals. This decision was influenced by the fact that the goods had been held for a long period and the appellants had already faced significant financial burdens.

2. Valuation of Goods Under Section 14 of the Customs Act, 1962:
The primary issue was whether the lower authority correctly determined the value of the goods. According to Section 14 of the Customs Act, 1962, the value for assessment purposes should be the transaction value, i.e., the price at which such or like goods are ordinarily sold in international trade. The Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, particularly Rule 3, mandates that if the transaction value cannot be determined, the value should be determined sequentially through Rules 5 to 8. The lower authority discarded the invoice value of US $320 per cbm and adopted an approximate value of US $420 per cbm based on a telex from the Charterers to the Master of the vessel. The Tribunal found that the lower authority did not follow the statutory procedure for determining the assessable value, thus rendering the order unsustainable.

3. Evidentiary Value of the Telex Indicating the Price of Goods:
The lower authority relied on a telex indicating an approximate value of US $420 per cbm to enhance the value of the goods. The Tribunal observed that this telex lacked a proper basis and was exchanged between parties not directly involved in the sale or purchase of the goods. The Tribunal emphasized that the value must be determined based on the transaction value or, if necessary, through the sequential application of the Valuation Rules. The telex, being an approximate value and not reflective of the transaction value, was deemed insufficient for determining the assessable value.

4. Allocation of Excess Goods:
The lower authority found an excess quantity of 275.70 cbm in the cargo but did not allocate this excess to any specific importer. The appellants argued that the excess was due to the exclusion of bark and sap in the wood trade. The Tribunal noted that the lower authority failed to address this explanation and did not properly allocate the excess to any importer, which was necessary for drawing adverse inferences.

5. Release of Goods Pending Adjudication:
Given the prolonged detention of the goods and the financial burden on the appellants, the Tribunal ordered the provisional release of the goods. The release was subject to the retention of 10% of the goods by the Department as security and the execution of a personal bond by the appellants. This decision aimed to balance the interests of the Revenue and the appellants, ensuring that the goods could be used for business purposes while safeguarding potential revenue liabilities.

Conclusion:
The Tribunal set aside the lower authority's order and remanded the matter for de novo consideration, emphasizing the need to follow the statutory procedures for valuation and addressing the appellants' explanations regarding the excess goods. The provisional release of the goods was ordered to mitigate the financial burden on the appellants while safeguarding the Revenue's interests. The adjudicating authority was directed to dispose of the matter within three months.

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