1993 (10) TMI 185 - AT - Customs

Summary

Issues Involved:
1. Whether the imported goods (locks and accessories) were covered for proper importation under the REP Licences as per the Import-Export Policy, 1988-91.
2. Whether the invoice value was the correct price for levying customs duty under the Customs Act, 1962.

Issue-Wise Detailed Analysis:

1. Coverage of Imported Goods under REP Licences:

The appellants imported a consignment of 3,000 pieces of locks and accessories and sought clearance under REP Licences, claiming the goods were covered by Sl. No. 569 of Appendix 3-A of the Import-Export Policy 1988-91. The show-cause notice alleged that the goods were door fittings (door-knobs/handles with in-built locking mechanisms) and should be classified under Sl. No. 145 of Appendix 2B, which restricted their import.

The Collector of Customs, Rajkot, determined that the goods were door fittings and not covered by Sl. No. 569 of Appendix 3-A, but rather under the generic category of consumer goods in Sl. No. 145 of Appendix 2B. He held that the importers' claim to clear the goods under the flexibility clauses of the Import policy was not permissible as the goods fell under Appendix 2B.

Upon review, it was found that the goods fit the description of locks and metal fittings as per Sl. No. 569 of Appendix 3-A, which specifically covers "locks, suitable fittings, and metal fittings." The Tribunal concluded that the specific description in Appendix 3-A should prevail over the general description in Appendix 2B, following the principle that a specific provision excludes a general one ("Generalibus Specialia Derogant"). Therefore, the goods imported were covered by the licences produced by the importer.

2. Correctness of Invoice Value for Customs Duty:

The goods were invoiced at US $10 per dozen. The Collector of Customs alleged that the declared value was incorrect based on market enquiries. The importer challenged this, arguing that the details of the market enquiries were not disclosed, violating principles of natural justice. The Tribunal noted that no specific evidence or cogent reasons were provided to support the adoption of market value over the declared value.

The Tribunal emphasized that the burden of proof to reject the transaction value lies with the customs department, which failed to provide evidence of contemporary imports at higher rates or any clandestine remittance. The Tribunal referenced several legal precedents, including the Calcutta High Court's decision in Sandip Agarwal v. Collector of Customs, which stated that the transaction value should be accepted unless proven otherwise.

The Tribunal found that the department did not substantiate the charge of under-invoicing in accordance with the law. The details of market enquiries were not disclosed, and the principles of natural justice were violated.

Conclusion:

The Tribunal vacated the impugned order of absolute confiscation and the imposition of a Rs. 40,000/- penalty, allowing the appeal with consequential relief to the appellants. The goods were covered by the licencing provisions, and the charge of under-invoicing was not substantiated. Remanding the case for de novo adjudication was deemed unnecessary due to the deficiencies in the show cause notice.