1995 (8) TMI 139 - AT - Customs

Summary

Issues Involved: Under-invoicing of imported goods, misdeclaration of value, confiscation and penalty, re-export of goods, and determination of assessable value.

Issue-wise Detailed Analysis:

1. Under-invoicing of Imported Goods:
The appellants imported 18 MTs of Thiourea with a declared invoice value of US $ 700/MT CIF Madras. The department received information suggesting that the goods were under-invoiced. A quotation from M/s. Shanghai Chemicals Import & Export Corporation indicated a price of US $ 1580/MT CIF for a similar quantity, raising doubts about the declared value.

2. Misdeclaration of Value:
Further investigation revealed that another consignment of 17.50 MT of Thiourea of Chinese origin was imported at US $ 1420/MT C&F Bombay by M/s. IBP Co. Ltd. Based on this evidence, the department questioned the declared value of US $ 700/MT CIF and issued a show cause notice to enhance the assessable value to US $ 1430/MT CIF, confiscate the goods under Sec. 111(m) of the Customs Act, 1962, and impose a penalty under Sec. 112(a) of the Customs Act, 1962.

3. Confiscation and Penalty:
The Commissioner of Customs determined the assessable value at US $ 1287/MT C&F under Rule 8 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, and ordered the confiscation of the goods under Sec. 111(m) of the Customs Act, 1962, with a fine of Rs. 5 lakh in lieu of confiscation and a penalty of Rs. 1 lakh on the appellants.

4. Re-export of Goods:
The appellants sought to introduce additional evidence showing correspondence with the supplier agreeing to buy back the goods due to economic difficulties in clearing the goods at the enhanced value. They cited the case of Supreme Electronics v. Collector of Customs and M.J. Exports v. C.E.G.A.T. to argue for re-export. However, the Tribunal found that the appellants had initially filed a Bill of Entry for Home Consumption and only sought re-export after the adjudication process had begun. The Tribunal rejected the plea for re-export, noting that the goods had become the property of the government upon confiscation.

5. Determination of Assessable Value:
The appellants contested the reliance on the IBP import for valuation, arguing that the goods were classified differently under the Customs Tariff Act. The Tribunal noted that the Commissioner did not assume the goods were identical but found the description and packaging similar. The appellants failed to produce the manufacturer's invoice, which was significant given the goods were of Chinese origin shipped from Hong Kong by a trader-supplier. The Commissioner applied Rule 8 of the Valuation Rules, 1988, to determine the value based on available data, including the IBP import and the quotation from a Chinese government-controlled unit.

Conclusion:
The Tribunal upheld the Commissioner's determination of the assessable value under Rule 8 of the Valuation Rules, 1988, and the confiscation and penalty under Sec. 111(m) and Sec. 112(a) of the Customs Act, 1962. The plea for re-export was rejected. However, the Tribunal reduced the fine in lieu of confiscation from Rs. 5 lakh to Rs. 3 lakh and the penalty from Rs. 1 lakh to Rs. 50,000, considering the period since import and the nature of the goods.