1998 (2) TMI 288 - AT - Customs

Summary

Issues Involved:
1. Correctness of the invoice price.
2. Mis-declaration of quantity.
3. Applicability of compared prices.
4. Contemporaneous import prices.
5. Justification of penalty.

Detailed Analysis:

1. Correctness of the Invoice Price:
The appellant, Shree Ganesh Agencies, contested the Collector's rejection of the declared price of S $ 3.15 CIF Cochin per Gross set, arguing that the goods were of lower quality (rusted and stock lot) compared to those imported earlier. The Collector, however, found that the goods were new and of good quality, and noted that the supplier had purchased the goods from the Indonesian manufacturer at S $ 3.00 per Gross set. Given the freight costs from Singapore to India, the supplier would incur a loss at the declared price, thus justifying the rejection of the invoice price.

2. Mis-declaration of Quantity:
The appellant claimed that the term "gross set" meant two gross, and that the packing list accurately reflected the actual quantity. However, the Tribunal found that the term "gross set" was ambiguous and not supported by evidence. The Tribunal noted that the packing list for Invoice No. 2027/91 indicated 180,000 pieces for 625 gross sets, equating to 288 pieces per gross set, which was inconsistent with the normal formula of 144 pieces per gross. The Tribunal concluded that the appellant's claim was dubious and unsupported by the evidence.

3. Applicability of Compared Prices:
The appellant argued that the goods in question were not comparable in quality to those previously imported, and that the department's adoption of earlier prices was inappropriate. The Tribunal noted that the appellant had produced invoices for zip fasteners of different origins and qualities, and that the prices varied significantly. The Tribunal found that the evidence did not support the appellant's claim that the goods were of lower quality, and upheld the Collector's decision to use the earlier import prices for comparison.

4. Contemporaneous Import Prices:
The appellant contended that there were no contemporaneous imports of similar goods at higher prices, and cited several decisions to support this plea. The Tribunal, however, found that the appellant's evidence, including invoices for zip fasteners from different periods and origins, did not justify the declared prices. The Tribunal noted that the earlier import price was significantly higher than the subject imports, and that the appellant's explanation for the price difference was unconvincing.

5. Justification of Penalty:
The Tribunal found that the appellant had used an ambiguous description ("gross set") to declare a lower value and mis-declare the quantity. Although the Tribunal revised the assessable value based on the price of Rs. 73 per gross (144 pieces) CIF, it concluded that a penalty was justified due to the appellant's attempt to undervalue the goods. The Tribunal reduced the penalty from Rs. 3 lakhs to Rs. 1 lakh, partially allowing the appeal.

Conclusion:
The Tribunal upheld the Collector's decision to reject the declared invoice price and found that the appellant had mis-declared the quantity. The Tribunal adjusted the assessable value based on comparable prices and reduced the penalty, partially allowing the appeal. The decision emphasized the importance of accurate declarations and the applicability of contemporaneous import prices in determining assessable value.