2000 (8) TMI 909 - AT - Customs

Summary

Issues: Misdeclaration of goods, misdeclaration to evade customs duty, valuation of imported goods, classification of goods, DEEC license clearance, confiscation of goods, penalties imposed.

The judgment involves the misdeclaration of goods imported under two contracts with M/s. Hagen & Miller Chemicals, USA, as "LDPE Film Grade Wide Spec" when they were actually Ethyelene Acrylic Acid Co-Polymers, leading to an attempt to evade customs duty. The Customs Officers discovered the misdeclaration during a detailed examination, where the goods were found to be different from what was declared, leading to a classification under 3901.90 instead of LDPE. The manufacturer certified the goods as "OFF GRADE" ethylene copolymers, not meeting prime material specifications, and sold at discounted prices. The Collector determined the value of the goods by adding a percentage to the manufacturer's price under Customs Valuation Rules, imposing penalties accordingly.

Regarding the misdeclaration issue, the judgment highlighted that the interception of the consignments was based on unverified information, not specific intelligence, leading to a conclusion of misdeclaration based on Acrylic Acid content. The misdeclaration was challenged based on a previous Tribunal decision, where similar goods were classified differently, supporting the appellant's classification under 3901.10. The withdrawal of the DEEC claim and correct declaration of goods were emphasized to refute the misdeclaration claim.

On the valuation aspect, the judgment noted that the goods were imported against valid contracts, and the invoice prices were upheld as no evidence of payments above invoice prices was found. The rejection of transaction value under Rule 4(2) was deemed inapplicable, as no material collected supported such rejection. The fluctuation in international prices was considered in assessing the reasonableness of the invoice prices.

In conclusion, the judgment set aside the order, allowing the appeal as no misdeclaration of goods or value was found. The initiation of the investigation based on unverified information and the absence of reliable evidence led to the reversal of the confiscation of goods, redemption fine, and penalties imposed, emphasizing the importance of accurate classification and valuation in customs matters.