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Issues:
Under-valuation of exported goods, invocation of Section 113(d) of FERA and Section 18 of Customs Act, imposition of penalty under Section 114(1) of Customs Act, consideration of collaboration agreement with a foreign firm, invocation of Section 14 of Customs Act, burden of proof on department for under-valuation, lack of detailed examination by lower authority. Analysis: The appeal concerns the under-valuation of goods intended for export by the appellants. The lower authority found the declared value unacceptable and invoked Section 113(d) of FERA and Section 18(1)(a) of FERA, 1973. The lower authority also referred to Export Control Order 1/88-ETC, stating that non-conforming goods attract Customs Act provisions. The appellants admitted under-invoicing, with discrepancies of 25% and 40% for different models. Consequently, the violation of FERA and Customs Act was established, leading to a penalty of Rs. 3,00,000 under Section 114(1) of Customs Act, 1962. The appellant's representative argued a collaboration agreement with a foreign firm for manufacturing radio cassette tape recorders. They contended that the negotiated price was fair in international trade, disputing under-valuation accusations. The advocate highlighted the omission of considering Section 14 of Customs Act, 1962 by the lower authority and the lack of determination of correct goods value. The department's representative defended the charge based on the goods' export price being lower than the domestic price. The appellate tribunal noted the lower authority's suspicion of under-valuation based on domestic prices but emphasized the necessity to consider Section 14 of Customs Act for export valuation. It critiqued the lack of discussion on Section 14 parameters and burden of proof for under-valuation. The tribunal highlighted the absence of a conclusive determination on the extent of under-invoicing by the lower authority, emphasizing the need for a detailed assessment and evidence on under-invoicing degree. Ultimately, the tribunal found the lower authority's examination inadequate and remanded the case for a fresh consideration. It directed a thorough review, including adherence to Section 14 of Customs Act and evidence-based determination of under-invoicing extent. The appeal was allowed by remand, with the pre-deposit to await the final adjudication outcome.
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