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Issues:
1. Valuation of imported goods for customs purposes. 2. Applicability of licensing requirements under the Imports and Exports (Control) Act, 1947. 3. Burden of proof in cases of under-valuation by importers. Valuation of Imported Goods: The case involved the importation of Fan Coil Units as part of an Air Conditioning System by M/s. Hemani International. The goods were declared at a unit price of U.S. $62.00 (C.I.F.) per unit. Upon examination, it was discovered that the consignment contained various components, including different models with varying cooling capacities. The Customs Valuation Rules, 1988 were applied to determine the value of the goods due to the absence of similar imports during the relevant period. The Tribunal considered international prices from a Mail Order Catalogue and allowed a discount for assessment purposes. The goods were classified as sub-assemblies falling under specific categories of the Exim Policy, leading to a conclusion that the clearance under a particular policy was not valid. Consequently, the importation was deemed unauthorized under the Imports and Exports (Control) Act, 1947, resulting in the issuance of a show cause notice to the importers. Applicability of Licensing Requirements: The issue of licensing requirements arose concerning the classification of the Fan Coil Units as finished sub-assemblies falling under a specific category of the Exim Policy, 1988-91. The Tribunal determined that the goods did not qualify for clearance under a particular section of the policy due to their classification as sub-assemblies of consumer items. This classification led to the conclusion that the importation was unauthorized in the absence of a valid import license, as per Section 3(2) of the Imports and Exports (Control) Act, 1947. The adjudication process resulted in the imposition of fines and penalties on the importers and the proprietor of the firm. Burden of Proof in Cases of Under-Valuation: The Tribunal addressed the burden of proof in cases of alleged under-valuation by importers. The Revenue contested the valuation determined under the Customs Valuation Rules, arguing that the importers had not provided evidence of contemporaneous imports at higher values. However, the Tribunal emphasized that the burden of proof to establish under-valuation rested with the Revenue. It was noted that suspicion alone could not substitute concrete evidence of under-valuation. Citing a relevant case law, the Tribunal highlighted the necessity of cogent evidence to support claims of under-valuation. Ultimately, the Tribunal rejected the Revenue's appeal, stating that the onus was on the Revenue to substantiate allegations of under-valuation, and since no compelling evidence was presented, the appeal was dismissed. ---
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