2019 (1) TMI 670 - AT - Customs

Valuation of imported goods - wooden furniture - loading of invoice price on prorata basis to the extent of excess weight found on physical verification of the goods - Held that - Undisputedly the appellant had imported wooden furniture of different varieties meant to be used in bedrooms and hall etc. While importing the said goods, the appellant had declared the classification of the product, under Chapter 94036000 and 94032090 of CTA, 1975 which are assessable to duty as unit not by weight. Therefore, noticing excess weight at the time of physical verification of the import by the Customs authorities, in our view, could not in any manner change the transaction value disclosed in the proforma invoices, which has not been disputed by the Revenue. Loading the invoice price prorata basis to the extent of excess weight of the furniture noticed during the physical examination is unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal Nos. 433 (GR.VI)/2010(JNCH)/IMP-398 and OIA No. 440 (GR.IV)/2010(JNCH)/IMP-400 passed by the Commissioner of Custom (Appeals) Mumbai-II JNCH, Nhava Sheva regarding the declaration of assessable value of imported wooden furniture, alleged suppression of goods' value, differential duty confirmation, confiscation of goods, and penalty imposition.

Analysis:
The appellant imported wooden furniture and declared the assessable value per the transaction price mentioned in the proforma invoice by the overseas supplier. However, discrepancies were found in the weight declared in the Bills of Entry and the actual weight of the goods upon examination. The Revenue alleged that the appellant suppressed the value of the goods based on the weight difference, leading to the confirmation of differential duty and imposition of penalties. The Commissioner (Appeals) rejected the appeal, prompting the present appeal before the Tribunal.

The appellant argued that the goods were declared based on unit-wise pricing in the invoices, not by weight, as the furniture fell under specific chapters with duty rates per piece, not weight. Citing various judgments, the appellant contended that loading the invoice price based on excess weight found during physical verification was legally untenable.

On the contrary, the Revenue supported the findings of the Commissioner (Appeals), justifying the loading of invoice price on a prorata basis due to discrepancies in the weight declared and the actual weight of the imported furniture.

After hearing both parties and reviewing the records, the Tribunal observed that the appellant had correctly classified the wooden furniture under specific chapters that were duty assessable per unit, not weight. Therefore, discrepancies in weight during physical verification should not affect the transaction value disclosed in the invoices. Consequently, the Tribunal found the loading of invoice price on a prorata basis due to excess weight unsustainable in law. As a result, the impugned order was set aside, and the appeals were allowed with any consequential relief as per law.

The judgment highlights the importance of correctly declaring goods based on unit-wise pricing when duty rates are prescribed per piece, not by weight. It emphasizes the need for consistency between the declared value in invoices and the actual physical attributes of the imported goods to avoid disputes regarding the assessment of duties and penalties.