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2012 (11) TMI 735 - AT - CustomsValuation - appellant imported a consignment of perfumes, deodorant, cosmetics and toiletries - declared value was rejected - valuation was done as per Rule 8 of the Customs Held that - In this case, we have observed that neither the time prescribed in the IPR Rules have been followed nor the conditions laid down in Rule 3 has been complied with. Therefore, provisions of IPR Act or Rules are not applicable in this case On the same day, another Bill of Entry No. 713117 has been filed by the same CHA for another importer having identical goods, which were allowed to be released. Therefore, discrimination has been done with the appellant, which is in violation of the principle of natural justice Goods were assessed after loading the value and, thereafter, re-enhancement has been done. Section 14(1) of the Customs Act provides for determination of value of such goods or like goods ordinarily available for sale, at the time and place of importation - method of valuation and market survey is not proper and no opportunity to the appellant were given to cross-examine the persons who have given the data for the valuation - No reason has been cited as to why the value of the contemporaneous import is rejected and there was no reason cited doubting the value furnished - order set aside and appeal allowed
Issues Involved:
1. Re-determination of the value of imported goods. 2. Confiscation of goods branded as 'Dove' under IPR Act and Rules. 3. Imposition of redemption fine and penalty. 4. Compliance with the Customs Valuation Rules and IPR Act/Rules. 5. Allegations of discrimination and violation of natural justice. Detailed Analysis: 1. Re-determination of the value of imported goods: The appellant imported a consignment of perfumes, deodorants, cosmetics, and toiletries, declaring a value of Rs. 4,21,587/-. The customs authorities intercepted the goods and found discrepancies in the declared descriptions and brands. Consequently, the declared value was rejected, and the goods were re-valued at Rs. 22,19,319/- based on market inquiries under Rule 8 of the Customs (Valuation) Rules, 2007. The appellant contested this valuation, arguing that the methodology and market survey were not disclosed, and they were not given the opportunity to cross-examine the individuals who provided the valuation data. The tribunal found that the customs authorities failed to provide proper reasoning for rejecting the transaction value and did not follow the correct valuation procedure, leading to the conclusion that the re-determination was improper. 2. Confiscation of goods branded as 'Dove' under IPR Act and Rules: Three items branded as 'Dove' were confiscated absolutely under the IPR Act and Rules, as they were suspected to infringe the trademark of Hindustan Unilever Ltd. The appellant argued that the provisions of the IPR Act and Rules were not followed during adjudication. The tribunal observed that the right holder did not comply with the procedural requirements stipulated under Rule 7 of the IPR Rules, such as providing notice and joining the proceedings within the prescribed time. Citing the judgment of the Madras High Court in the case of Landom Distributors Pte. Ltd., the tribunal held that the confiscation of the 'Dove' branded items was not justified due to non-compliance with the IPR Rules. 3. Imposition of redemption fine and penalty: The remaining items were provisionally released under bond, and a redemption fine of Rs. 3.5 lakhs, along with a penalty of Rs. 3.5 lakhs, was imposed on the appellant. The tribunal found that the imposition of the fine and penalty was based on the incorrect re-determination of the value and improper confiscation under the IPR Rules. Consequently, the tribunal set aside the fine and penalty imposed on the appellant. 4. Compliance with the Customs Valuation Rules and IPR Act/Rules: The tribunal noted that the customs authorities did not follow the correct procedure under the Customs Valuation Rules. Specifically, the authorities did not provide a valid reason for rejecting the transaction value and failed to use comparable data for valuation. Additionally, the procedural requirements under the IPR Rules, such as timely notice and participation by the right holder, were not met. Therefore, the tribunal concluded that the customs authorities did not comply with the relevant rules and regulations. 5. Allegations of discrimination and violation of natural justice: The appellant highlighted that on the same day, another Bill of Entry with similar items, including 'Dove' branded products, was processed without invoking the IPR Rules, indicating discrimination. The tribunal agreed with the appellant, citing the Bombay High Court's decision in I.S. Lulla, which emphasized that inconsistent application of rules constitutes a violation of natural justice. The tribunal found that the appellant was subjected to discriminatory treatment, further supporting the decision to quash the impugned order. Conclusion: The tribunal set aside the impugned order, quashing the re-determined value, confiscation of 'Dove' branded items, and the imposition of redemption fine and penalty. The appeal was allowed with consequential relief to the appellant.
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