1996 (7) TMI 256 - AT - Customs

Summary

Issues:
1. Validity of import licences for umbrella cloth sizes.
2. Interpretation of Serial No. 627 of Appendix 3 Part A of 1988-91 Policy.
3. Mis-declaration of value for imported umbrella cloth.
4. Adequacy of evidence considered for valuation determination.
5. Decision on misdeclaration of value and correct valuation.
6. Remand of the case for fresh decision.

Analysis:

The appellant had placed an order with a Taiwan supplier for importing umbrella cloth pieces of sizes 39'' and 42'' but faced issues with the validity of the 5 REP licences for these items. The Collector of Customs confiscated the goods due to invalid licences and mis-declaration of value, allowing redemption on payment of a fine. The appellant challenged this order.

The main contention revolved around the interpretation of Item 627 of Appendix 3 Part A of the 1988-91 Policy, which refers to "Umbrella ribs and components thereof (including cloth/cover cut to size)." The Collector's restrictive interpretation was that the appellant could only import sizes ranging from 15'' to 30'', not 39'' and 42''. However, the Tribunal disagreed, stating that the expression "cut to size" should be understood in a general sense, not strictly to exact sizes used in manufacturing. Therefore, the import of 39'' and 42'' sizes was deemed valid, setting aside the Collector's finding.

Another issue was the mis-declaration of value by the appellant for different sizes of umbrella cloth. The Collector based his valuation on a single import at Bombay, disregarding other imports and comparable contracts provided by the appellant. The Tribunal found flaws in the Collector's approach, noting that prices were not proportionate to sizes in the available contracts. Due to inadequate examination of comparable imports, the findings of misdeclaration of value were deemed unsustainable, leading to a remand of the case for a fresh decision on valuation.

Ultimately, the Tribunal set aside the impugned order on questions of misdeclaration of value and valuation, remanding the case to the jurisdictional Commissioner for a fresh decision after affording the appellant an opportunity for a personal hearing. As a result, the appeal was allowed, providing a favorable outcome for the appellant.