1997 (3) TMI 188 - AT - Customs

Summary

Issues Involved:
1. Alleged undervaluation of imported Laser Jet Printers.
2. Comparison with other import cases.
3. Determination of assessable value under Customs Valuation Rules.
4. Confiscation and penalties under the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Alleged Undervaluation of Imported Laser Jet Printers:
The department alleged that the value declared by the importer for the Laser Jet Printers was significantly lower than the prices of similar imports. The declared value was S$2767 per unit, whereas comparable imports were valued at S$5514 and US$2500 per unit. The department issued a show cause notice to the importer, questioning the declared value and suggesting it was not the 'transaction value' as per Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988.

2. Comparison with Other Import Cases:
The department compared the importer's declared value with two other cases:
- Case No. 1: Zenith Computers imported Laser Jet Printers with extra options, valued at S$5514 per unit.
- Case No. 2: Aftek Business Machines imported a Laser Printer valued at US$2500 per unit.

The importer contended that their imports did not include extra options, unlike the other cases. They argued that the comparison was invalid as the quantities and the nature of goods differed. The supplier confirmed that the value of the bare printer was S$2767, and the higher value in Zenith's case included additional options.

3. Determination of Assessable Value under Customs Valuation Rules:
The department rejected the declared value and determined the assessable value under Rule 5 of the Customs Valuation Rules, based on the higher value of similar goods imported by Zenith Computers. The department calculated the assessable value as Rs. 8,67,605/- for 18 printers, including freight, insurance, and handling charges. The importer argued that the declared value should be accepted as it represented the transaction value and that the department had not provided sufficient reasons for rejecting it.

4. Confiscation and Penalties under the Customs Act, 1962:
The department issued a show cause notice proposing confiscation of the goods under Section 111(m) and Section 111(d) of the Customs Act, 1962, due to undervaluation and the absence of a valid ITC license for the differential value. They also proposed a penalty under Section 112 of the Customs Act, 1962. The Collector upheld the department's view, ordering confiscation with an option for redemption on payment of a fine and imposing penalties.

Judgment Analysis:
The Tribunal analyzed the contentions and evidence presented by both sides. It found that:
- The supplier's clarification supported the importer's declared value of S$2767 per unit for bare printers.
- The comparison with Zenith Computers' imports was invalid as those included extra options.
- The comparison with Aftek Business Machines was also invalid due to differences in supplier, currency, and nature of goods.

The Tribunal concluded that the department had not provided sufficient evidence to prove undervaluation. It emphasized that the burden of proof for undervaluation lies with the department, which failed to show that the declared value did not reflect the normal price in international trade. The Tribunal cited various judgments supporting the acceptance of the declared transaction value in the absence of concrete evidence of undervaluation.

Conclusion:
The Tribunal set aside the impugned order, accepting the importer's declared value and allowing the appeal with consequential relief. The department's allegations of undervaluation and the subsequent actions under the Customs Act, 1962, were not upheld due to insufficient evidence and improper comparison with other import cases.