2012 (7) TMI 750 - AT - Customs

Valuation of the goods redetermination of value Held that - determination of value has not been done either under Rule 7 or Rule 8 as proposed in the show-cause notice but on the basis of transaction value of similar goods under Rule 5 - imports in this case have been made in March, 2010. The value adopted for comparison relates to bill of entry no. 809005 dated 10.7.2009. The import made in July, 2009 cannot be said to be contemporaneous to the imports made in March, 2010 - importer has given details of 10 bills of entry wherein polyester corduroy fabrics have been imported at prices ranging from US 0.32/mtr to US 0.51/mtr - There is no other evidence adduced by the department to show that the value of US 0.65/mtr declared by the importer in the import documents is incorrect - redetermination of value as proposed in the impugned order set aside. Penalty - Confiscation of the goods Held that - Merely because the appellant had claimed a wrong classification, it cannot be held that the appellant has misdeclared the goods, as it is for the customs authorities to assess the bill of entry and correctly classify the imported goods - description given in the bill of entry is in conformity with those given in the various import documents, namely invoice, packing list and bill of lading. Therefore, it cannot be held that the appellant tried to mislead the department - no misdeclaration on the part of the appellant attracting the provisions of Section 111 (m) of the Customs Act - confiscation and fine of penalties imposed on the appellant set aside

Summary

Issues:
1. Classification of imported goods under Chapter 58.
2. Valuation of the imported goods.
3. Confiscation of goods and imposition of penalty.

Issue 1: Classification of imported goods under Chapter 58
The case involved the classification of imported textile fabrics by the appellant. The department contended that the fabrics should be classified under Chapter 58 as corduroy due to the presence of pile, contrary to the appellant's claim under Chapter 54. The Textile Committee's test reports confirmed the fabrics as cut weft pile corduroy, leading to the reclassification under CTH 5801 3200. The appellant argued that corduroy fabrics are typically all cotton, not polyester. However, upon examination and perusal of tariff entries and test reports, it was established that the fabrics met the description under CTH 5801 3200, and the classification was upheld.

Issue 2: Valuation of the imported goods
The valuation of the imported goods was disputed based on the declared value by the appellant and the department's proposed value. The department sought to redetermine the value under Customs Valuation Rules, 2007, using a bill of entry from a previous year. However, the tribunal found the redetermined value to be incorrect and not in accordance with the Customs Valuation Rules. The tribunal highlighted discrepancies in the valuation process, including non-contemporaneous comparisons and lack of evidence to support the department's valuation. Consequently, the redetermined value was set aside, and the appellant's valuation was upheld based on the submitted data of similar imports.

Issue 3: Confiscation of goods and imposition of penalty
The appellant contested the confiscation of goods and imposition of penalties, arguing that there was no intent to misdeclare the goods. The tribunal noted that the goods were described consistently in import documents and underwent examination before assessment. Relying on precedents, the tribunal concluded that misclassification in import documents, made in good faith, does not warrant confiscation or penalties. As there was no evidence of intentional misdeclaration, the tribunal set aside the confiscation of goods and penalties imposed on the appellant and its director. Ultimately, the tribunal ruled in favor of the appellant, allowing the appeal partially by upholding the classification under CTH 5801 3200 and setting aside the redetermined value, confiscation of goods, and penalties.