2000 (3) TMI 232 - AT - Customs

Summary

Issues Involved:

1. Misdeclaration of the country of origin of imported goods.
2. Under-valuation of imported goods.
3. Legality of the enhancement of the declared price.
4. Validity of evidence used for price enhancement.
5. Imposition of differential duty and penalties.

Issue-wise Detailed Analysis:

1. Misdeclaration of the Country of Origin of Imported Goods:

The appellants declared the country of origin of the imported musical instruments as China in the Bill of Entry and accompanying documents. However, upon examination by Customs officers, the goods were found to be predominantly of Japanese origin. This misdeclaration led to the seizure of the goods under Section 110 of the Customs Act.

2. Under-valuation of Imported Goods:

The appellants declared the value of the imported goods as Rs. 5,37,962.20. However, investigations revealed that the exporter, M/s. Creotex International Enterprises, declared a much higher value of Hongkong dollars 2,36,585 (equivalent to Indian Rs. 11,14,315.35) with the Hongkong Customs and Excise Department. This significant discrepancy indicated gross undervaluation by the appellants.

3. Legality of the Enhancement of the Declared Price:

The appellants contended that the enhancement of the declared price was not in accordance with Section 14 of the Customs Act. They argued that the quotations from M/s. Tom Music Co. Ltd. and Lee Company, and the value declared by M/s. Creotex International Enterprises, could not be legally considered without evidence of contemporaneous imports of identical or similar goods at a higher price. However, the adjudicating authority rejected this argument, stating that the appellants failed to produce the manufacturer's invoice or any other documents to substantiate the declared price.

4. Validity of Evidence Used for Price Enhancement:

The adjudicating authority relied on the higher value declared by M/s. Creotex International Enterprises to the Hongkong Customs, quotations from M/s. Tom Lee Music Ltd. of Hongkong, and M/s. Swee Lee Company, Singapore. These pieces of evidence were deemed sufficient to discard the transaction price declared by the appellants. The appellants failed to rebut the correctness of these quotations or produce any reliable evidence to support their declared price.

5. Imposition of Differential Duty and Penalties:

Based on the findings, the Commissioner ordered the confiscation of the goods with an option to redeem them on payment of Rs. 3 lakhs, demanded a differential duty of Rs. 6,56,683, and imposed a penalty of Rs. 2 lakhs on each appellant. The Tribunal upheld these orders, finding no legal infirmity in the Commissioner's decision.

Conclusion:

The Tribunal dismissed the appeals, upholding the Commissioner's order of confiscation, differential duty, and penalties. The appellants' arguments regarding the legality of price enhancement and the validity of evidence were rejected, as they failed to provide sufficient proof to support their declared price and origin of the goods. The adjudicating authority's actions were found to be in accordance with the provisions of Section 14 of the Customs Act and the Customs Valuation Rules.