2015 (9) TMI 193 - AT - Customs

Valuation of goods - Undervaluation of goods - Misdeclaration of goods - Held that - There is no basis given in the adjudication order to suspect that the goods were of superior quality and the test reports are not supportive of this inference - there is no legal basis to base the finding on the basis of Palm Oil Refiners Association of Malaysia ( PORAM ) s product specifications particularly when the goods were of Oman origin. Further based on PORAM it was held that the goods were PFAD of superior quality. This finding directly flies in the face of the CRCL Report which categorically stated that the goods are Vegetable Fatty Acid. Further for the purpose of valuation the Adjudicating authority proceeded to compare the import data of PFAD and that too from Malaysia and Indonesia and not from Oman. In the impugned order it is clearly noted that the said import data is not valid for the purpose of valuation in terms of Rules 5 and 6 of valuation Rules 1988 and no further data pertaining to Rule 7/ 7A was available . Therefore the determination of the value of the impugned goods contained in nine containers based on the import data of PFAD (which is not the same as vegetable fatty acid) and that too from countries other than the country of origin and under Rule 8 without giving any methodology is totally without any sustainable legal basis. It is also seen that the goods contained in nine containers were released without any bond or undertaking and therefore, in the wake non-availability of the goods, the redemption fine is not imposable. - The value of the goods in the 10th container was adopted on the basis of the Tariff Value for Crude Palm Oleic for which again there is no legal justification as the CRCL report about the contents of the 10th containers no where stated that the goods are Crude Palm Oleic. We also find that the show cause notice alleged that the declared value was U.S. 410 Per MT while in fact the value declared by the importers was U.S. 420 PMT. The Adjudicating authority has recorded that the goods were found to be odorless, off-white in colour and goods were not of Oman Origin although there is no basis whatsoever cited for recording such findings. None of the laboratory reports stated that the goods were odorless and off-white in colour . - No infirmity in impugned order - Decided in favour of assessee.

Summary

Issues Involved:
1. Allegation of misdeclaration and undervaluation of imported goods.
2. Proper appreciation of evidence by the adjudicating authority.
3. Classification of goods as vegetable fatty acid and valuation discrepancies.
4. Legal basis for determining the nature and value of imported goods.
5. Inadequacy of quasi-judicial analysis in the adjudication order.

Analysis:

Issue 1:
The case involved allegations of misdeclaration and undervaluation of imported goods. The appellants imported ten containers, with discrepancies identified in the value declaration for nine containers and the nature of goods in the tenth container.

Issue 2:
The adjudicating authority's findings were challenged by the appellants, who argued that the conclusions lacked proper appreciation of the evidence on record. The test reports confirmed the goods in nine containers as vegetable fatty acid of Oman origin, contrary to the authority's assertions of superior quality.

Issue 3:
Regarding the classification and valuation of goods, discrepancies arose in the adjudication process. The authority compared import data of PFAD from Malaysia and Indonesia, not Oman, for valuation under Rule 8 without a clear methodology, leading to an unsustainable legal basis for determining the value of the goods in nine containers.

Issue 4:
The nature and value determination of the goods in the tenth container were also contested. The authority relied on PORAM standards for vegetable fatty acid qualification, despite the absence of clear findings from the CRCL report. The value determination based on Tariff Value for Crude Palm Oleic lacked legal justification, further compounded by discrepancies in declared values and origin findings.

Issue 5:
The adjudication order was critiqued for inadequacies in quasi-judicial analysis, with discrepancies noted in the findings regarding the nature, origin, and characteristics of the imported goods. The appellants' contentions were not adequately addressed, leading to the appeal being allowed due to the unsustainability of the impugned order.