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Issues: Misdeclaration of goods, under-invoicing, suppression of quantity, country of origin not mentioned, valuation of goods, confiscation of goods, redemption fine, penalty under Customs Act, 1962
The judgment pertains to an appeal against an Order-in-Original passed by the Collector of Customs, Madras, concerning misdeclaration and under-invoicing of Rectifier Diodes imported from Hong Kong. The appellants declared a lower quantity and value of the goods compared to the actual quantity and market rate. The Collector found the appellants suppressed the quantity and country of origin, determining the value using Rule 8 of the Valuation Rules and ordering confiscation of goods with an option to redeem on payment of a fine and imposing a penalty under Sections 111(m) and 112(a) of the Customs Act, 1962. The appellants argued that the misdeclaration was unintentional, attributing it to errors by the supplier. They contended that the Collector erred in enhancing the value without evidence of extra payment or a special relationship with the supplier. The appellants challenged the reliance on the supplier's quotation, citing precedents that emphasize the importance of the manufacturer's invoice for valuation. They also argued against the imposition of a penalty without establishing the requisite mens rea. The Revenue contended that evidence established the suppression of quantity and misdeclaration, supported by discrepancies in documents and delayed production of the country of origin certificate. They argued that the value determination was based on market prices and justified under Rule 8 of the Valuation Rules, citing precedents supporting rejection of invoice value in case of misdeclaration. The Tribunal upheld the Collector's findings on quantity suppression and misdeclaration, emphasizing the appellants' failure to produce the original Bill of lading. However, it remanded the matter for revaluation, stressing the Department's burden to provide sufficient evidence and disclose sources for valuation. The Tribunal directed the re-determination of value and potential adjustment of fine and penalty based on the new valuation, ensuring disclosure of market survey data and working sheets to the appellants for rebuttal. In conclusion, the appeal was disposed of with the direction to re-determine the value of the goods after disclosing valuation sources and providing an opportunity for the appellants to respond, potentially affecting the quantum of the redemption fine and penalty based on the revised valuation.
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