2015 (10) TMI 763 - SC - Customs

Over valuation of items imported - Consignment of CD ROMs declared as computer software Appellant alleged that consignment was overvalued and Respondent wrongly claimed benefit of exemption Notification No.11/97-Cus and evaded payment of excise duty Respondent contends that Electronics and Computer Software Export Promotion Council opined that goods were computer software and valuation so made is fair and correct and the same would be exempted under the Notification Held That - Revenue accepted that CD ROMs which were imported by the respondent-company were capable of interactivity and the same would be covered by the definition of computer software contained in the exemption Notification. - Declaration of price in the Bill of Entry was correct and goods are wholly exempt from customs duty thus there could be no motive in mis-declaration of value Decided in favour of the Respondent.

Issues:
1. Declaration of imported goods as computer software.
2. Allegations of overvaluation and evasion of customs duty.
3. Benefit of exemption notification claimed by the respondent.
4. Decision of the Tribunal regarding the declaration of value.

Declaration of imported goods as computer software:
The respondent-company imported CD ROMs from M/s. Gulf Software, UAE, declaring them as computer software under Customs tariff Heading 8524.99. The appellant/revenue conducted a search based on intelligence reports of companies importing junk software without paying customs duty. Statements of company officials were recorded, and a show cause notice was issued regarding overvaluation and evasion of customs duty. The Electronics and Computer Software Export Promotion Council opined that the declared value was fair in the international market for such goods. The Order-in-Original confirmed the demand, but the Tribunal allowed the appeal, citing the respondent's entitlement to exemption benefits based on a previous court judgment.

Allegations of overvaluation and evasion of customs duty:
The show cause notice alleged that the respondent-company overvalued the imported goods and wrongly claimed exemption benefits, thereby evading payment of excise duty. Despite the expert body's opinion supporting the declared value, the Adjudicating Authority confirmed the demand. However, the Tribunal overturned this decision, emphasizing that when goods are wholly exempt from customs duty, there is no motive for misdeclaration of value. The Tribunal's decision was based on factual findings and expert opinion, leading to the dismissal of the appeal.

Benefit of exemption notification claimed by the respondent:
The Tribunal acknowledged that the respondent was entitled to the benefit of an exemption notification based on a previous court judgment. The CD ROMs imported by the respondent were considered capable of interactivity, falling within the definition of 'computer software' as per the exemption notification. This acknowledgment by the Revenue further supported the respondent's position in the case.

Decision of the Tribunal regarding the declaration of value:
The Tribunal ruled in favor of the respondent-company concerning the declaration of value. It found that the declared price of USD 15 per piece was fair in the international market, supported by the expert body's opinion. The Tribunal concluded that there was no motive for misdeclaration of value when goods were exempt from customs duty. As the decision was based on factual analysis and expert assessment, the Supreme Court saw no reason to interfere and dismissed the appeal accordingly.

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