2019 (2) TMI 973 - AT - Customs

Valuation of imported goods - automobile motor parts such as Heat Exchanger, Condenser and magnetic clutch assemble - identical/similar goods - reliance placed on contemporary price after a long period - Held that - The Revenue is attempting and comparing the quality product imported by M/s Sanden which is reputed supplier and the imported goods are branded one. We also find that the import in this case has already been assessed finally and cleared after examination thereof. The demand cannot be raised after the gap of 4/5 years on the basis of alleged contemporaneous import price. It is on record that the alleged contemporaneous price of M/s Sanden Vikas was available with the assessing officer at the time of import but the same was not considered at that time considering these to be of different quality. The reliance cannot be placed on the same contemporary price after such a long period. The impugned order is bad in law and not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Alleged under-invoicing of imported automobile motor parts
- Failure to afford personal hearing to the appellant
- Comparison of imported goods with those of different quality
- Demand raised after a significant lapse of time
- Confiscation of goods proposed by the Revenue

Analysis:
1. Alleged under-invoicing of imported automobile motor parts:
The appellant was accused of under-invoicing automobile motor parts, leading to a demand for differential duty, penalty, and interest. The Customs suspected that the appellant imported goods at a lower price than the actual value, comparing them with imports by another company. However, the appellant argued that the goods were not identical and were of Chinese origin, not Japanese as claimed by the Revenue. The appellant also highlighted negotiations for discounted prices and discrepancies in the country of origin certificate.

2. Failure to afford personal hearing to the appellant:
The appellant contested the order on the grounds of not being granted a personal hearing before the decision was made. Despite requesting a hearing, the appellant was surprised to receive an order for payment without due process. This lack of opportunity to present their case raised concerns about procedural fairness.

3. Comparison of imported goods with those of different quality:
The Tribunal noted that the imported goods were not branded and were of different quality compared to those of a reputed supplier. The assessment had been finalized and goods cleared after examination, making it questionable to raise demands years later based on alleged contemporaneous import prices. The Tribunal emphasized the need for a valid comparison considering the quality and origin of the goods.

4. Demand raised after a significant lapse of time:
The demand for differential duty was challenged by the appellant due to the extended period between import clearance and the demand being raised. The appellant argued that the assessment had been completed without misdeclaration, citing legal precedents to support their position. The Tribunal found it unjust to raise demands after such a significant time lapse, especially without substantial evidence of misdeclaration.

5. Confiscation of goods proposed by the Revenue:
The Revenue proposed confiscation of the imported goods under Section 11(m) of the Customs Act. However, the Tribunal found that the goods were not liable for confiscation as proposed, considering the discrepancies in the comparison and the lack of substantial evidence to support the claims made by the Revenue. The Tribunal ultimately set aside the impugned order and allowed the appeal, providing consequential relief to the appellant in accordance with the law.