2006 (8) TMI 46 - AT - Customs

Customs - Valuation - Alleged that undervaluation of good - No evidence provided in support of it - Charge of undervaluation not proved- Rule 4(2) of Custom Valuation Rules 1988 - Section 14 of Customs Act 1962.

Summary

Issues: Differential duty demand, rejection of declared value, confiscation of goods, penalty imposition.

In the judgment by the Appellate Tribunal CESTAT, Mumbai, the adjudicating authority confirmed a differential duty demand of Rs. 38,21,696 along with interest under Sections 28 and 28AB of the Customs Act. This demand was based on the rejection of the declared value of Rs. 8,36,305.20 for consignments of furniture parts imported by the appellants. The assessable value was re-determined at Rs. 68,62,636.68, leading to the confiscation of seized goods with a redemption fine of Rs. 20,00,000 and a penalty imposed on the importer company and its director.

The Tribunal considered the Revenue's argument that the imported goods were undervalued based on export declarations from foreign customs authorities. However, these declarations were unsigned photocopies, and the covering letters from the foreign customs authorities were not provided, as requested by the importers. Citing a Supreme Court decision, the Tribunal noted that the presumption under Section 139(ii) of the Customs Act cannot apply when the authenticity of photocopies is in question. Additionally, no enquiries were made with the manufacturers to determine the correct value, and the importers submitted original invoices from manufacturers in various countries. The Revenue failed to demonstrate any special circumstances to reject the transaction value or provide evidence of additional payments beyond the declared value. Consequently, the Tribunal found that the undervaluation claim was not substantiated and set aside the impugned order, allowing the appeals.