1998 (9) TMI 175 - AT - Customs

Summary

Issues:
1. Under-valuation of imported goods.
2. Reliance on invoices for valuation.
3. Application of Residuary Rule 8 of Customs Valuation Rules.
4. Discrepancies in quantity and description of goods.
5. Country of origin and contemporaneous import prices.
6. Mis-declaration charge under Section 111(m) of the Customs Act, 1962.

Issue 1: Under-valuation of imported goods:
The appellant imported auto accessories with a declared value of US $4,390.40 CIF, which the department found to be lower compared to invoices for similar goods of Taiwan origin. A show cause notice was issued proposing to enhance the value from Rs. 1,15,251 to Rs. 2,32,345, alleging under-valuation of Rs. 1,17,094. The Collector of Customs passed an order enhancing the value but dropped the mis-declaration charge under Section 111(m) of the Customs Act, 1962.

Issue 2: Reliance on invoices for valuation:
The department relied on invoices from Singapore suppliers to support the enhancement of the assessable value. However, the invoices were not contemporaneous, and the appellant argued that the goods' descriptions and quantities did not match. The appellant contended that the department failed to show evidence of price increases between the dates of the invoices and the current import.

Issue 3: Application of Residuary Rule 8 of Customs Valuation Rules:
The Collector adopted prices from Singapore invoices to support valuation under Rule 8. The Tribunal noted that the invoices were not contemporaneous and emphasized the need for a reasonable basis with adjustments to determine value under the Residuary Rule.

Issue 4: Discrepancies in quantity and description of goods:
The appellant imported goods at significantly higher quantities than those in the invoices relied upon by the Custom House. The Tribunal found that the department did not effectively address this discrepancy in the impugned order, weakening the valuation case.

Issue 5: Country of origin and contemporaneous import prices:
The goods were from Taiwan, while the invoices for comparison were from Singapore suppliers. The Tribunal highlighted the lack of contemporary imports of similar goods to indicate consistent higher values, undermining the department's valuation argument.

Issue 6: Mis-declaration charge under Section 111(m) of the Customs Act, 1962:
The mis-declaration charge was not substantiated and was dropped by the Collector of Customs. The Tribunal set aside the impugned order, noting the lack of a firm basis for the value enhancement and allowed the appeal.