1996 (7) TMI 374 - AT - Customs

Summary

Issues Involved:
1. Allegation of undervaluation of imported goods.
2. Liability to confiscation under Section 111(m) and Section 111(d) of the Customs Act, 1962.
3. Determination of the correct value of imported goods.
4. Fulfillment of export obligations under DEEC Scheme.
5. Role and liability of other respondents in abetting undervaluation.

Detailed Analysis:

1. Allegation of Undervaluation of Imported Goods:
The Revenue challenged the Order-in-Original, which dropped the proceedings against the respondents for alleged undervaluation of imported Prime Hot Rolled Coils. The goods were declared at DM 565 per M.T., but the Revenue contended that the correct value should be DM 850 or DM 787 per M.T., based on initial agreements and payments made to the Italian manufacturers.

2. Liability to Confiscation under Section 111(m) and Section 111(d) of the Customs Act, 1962:
The Revenue invoked Section 111(m) for goods not corresponding in value and Section 111(d) for exceeding value limits of import licenses. The adjudicating authority found no evidence of misdeclaration or agreement to pay differential amounts, thus dropping the proceedings. The Revenue argued that the goods should be confiscated for undervaluation and exceeding license value limits.

3. Determination of the Correct Value of Imported Goods:
The adjudicating authority concluded that the declared value of DM 565 per M.T. was correct, based on negotiated price and actual payment. The Revenue presented evidence of higher prices from similar imports and initial agreements. However, the Tribunal found that the initial contract was terminated due to non-compliance, and fresh negotiations led to a reduced price of DM 565 per M.T. The Tribunal upheld the adjudicating authority's decision, emphasizing the negotiated price and lack of evidence for higher valuation.

4. Fulfillment of Export Obligations under DEEC Scheme:
The adjudicating authority noted that the importers had fulfilled their export obligations, making the valuation dispute insignificant. The Revenue argued that this was irrelevant to the undervaluation issue. The Tribunal agreed with the adjudicating authority, noting that the fulfillment of export obligations supported the declared value.

5. Role and Liability of Other Respondents in Abetting Undervaluation:
The Revenue alleged that other respondents abetted in undervaluation. The adjudicating authority found no evidence of such involvement. The Tribunal upheld this finding, noting the lack of evidence for abetment or payment of differential amounts by other means.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the adjudicating authority's order that the declared value of DM 565 per M.T. was correct. The Tribunal found no grounds for confiscation under Section 111(m) or Section 111(d), and no evidence of abetment by other respondents. The appeal from the department stands rejected.