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TMI Blog1989 (7) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... e licences were valid for import of goods mentioned in column 4 items as allowed against Export Product Group C-11-3/C-11-4 of Appendix 17 of the Import Policy AM 1985-88. The proforma invoice dated 6th June, 1986 and the invoice dated 6th November, 1986 indicated that the goods were shipped from ANTWERP by M/s. Equest Shippers Ltd., British Channel Islands. However, the certificate of origin dated 7th October, 1986 issued by the European Community which shows the description of the import item as PARQUET EN MAT. The said certificate indicates that the goods imported are the one commercially known as floor coverings (PARQUET AN MAT). 3. The cargo was examined by the department and representative sample drawn from the consignment and tested in the Custom House laboratory. The test report confirmed that these are sheets, made of polyvinyl chloride having black colour on one side and different colours with designs and check patterns on the other. 4. As per information gathered by the Customs authorities it was found that the imported PVC sheets were finished products viz, floor coverings (in ready for use/ready for sale condition), a consumer product falling under Serial Number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vealed that the prevailing comparable price for the subject item was in the range of Rs. 113 to Rs. 240 per sq. metre. The item being floor coverings made of PVC had to be correctly classified under Heading 3918.10 of the Customs Tariff and 3918.00 of the Central Excise Tariff as against 3921.12 and 3920.11 respectively as claimed by the appellant. It appeared that the imported goods being finished products viz., floor coverings which was a consumer item, covered by Serial Number 121 of Appendix 2B of Import Policy AM 85-88, clearance sought under the REP licences was in violation of the provisions of general conditions of para 5 of Appendix 17 of the Import Policy AM 85-88. 7. The Customs authorities were of the view that the appellant had knowingly and wilfully mis-declared the description and value in the Bill of Entry with a view to fradulently claim clearance under the REP licences and to evade payment of Customs duty in violation of the provisions of Section 46 of the Customs Act, 1962 which constituted an offence rendering the subject goods liable for confiscation under Section 111(m) of the Customs Act, 1962 and 11460 sq.m. PVC floor coverings imported in contravention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Appendix 17 would indicate that Items C-11-4 mentioned PVC sheets as an item eligible for importation against exportation of PVC fabricated goods. This clearly implied that the PVC sheets imported was only to facilitate manufacture of PVC fabricated goods and there was no question of importing any PVC sheets which are already in the finished form and the certificate issued by the European Community clearly indicated that the goods are floor coverings which by itself form finished goods and hence the question of treating it as a raw material as envisaged in Appendix 17 does not arise. 12. The learned Collector of Customs has, therefore, held that the goods were floor-coverings and hence did not qualify for importation as raw material as envisaged under Appendix 17 of the Policy 1985-88. 13. On the valuation aspect the learned Adjudicating authority had observed that the original contract was for the supply of 17500 sq.m. in one container at a price of US $ 0.60 per sq.m. Subsequently the total quantity had been reduced to 11500 sq.m. only in a container and the supplier had suffered a loss of about US $ 3,624 due to shipment of a lesser quantity in the said consignment. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ikumaran, the learned Advocate has referred to a Judgement in the case of Mirah Dekor, New Delhi v. Collector of Customs, New Delhi reported in 1988 (35) E.L.T. 357 (Tribunal). Shri Lakshmikumaran has further argued that Appendix 17 of the Import-Export Policy 1985-88 was not discussed earlier and in the appellant s case the value declared was 0.60 US $ and the same was raised to US $ 1.157 by the Collector of Customs. Shri Lakshmikumaran stated that there is no dispute as to classification. Shri Lakshmikumaran has argued that para 225 of AM 85-88 relates to REP licence and earlier the REP licence were freely transferrable. He has argued that the rate of duty applicable is 236%. He has referred to a judgment in the case of Decor India and Others v. Collector of Customs, New Delhi reported in 1987 (31) E.L.T. 400 (Tribunal). He has also drawn the attention of the Bench to Public Notice No. 127-ITC(PN) 85-88 dated 27th October, 1986. He has also referred to the reply to the show cause notice. He has argued that the Bill of Lading is dated 18th October, 1986. He has referred to para 18 of the Collector s order which deals with the ITC aspect. Shri Lakshmikumaran has argued that the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .L.T. 753 (Del.)- Jain Export Pvt. Ltd., New Delhi Anr. v. UOI Others 3. AIR 1976 S.C. 2520 - Sone Valley Portland Cement Co. Ltd. v. The General, Mining Syndicate Pvt. Ltd. Shri Lakshmikumaran has again pleaded for the acceptance of the appeal. 19. We have heard both the sides and have gone through the facts and circumstances of the case. The appellant has imported PVC sheets. The description in the Bill of Entry and the connected invoice is 11460 sq.m. PVC sheets of size 0.72 mm thickness and 2 metre length and the value declared was US $ 0.60 per sq.m. CIF Cochin. The appellant had sought clearance of the same against the following four import licences :- (1) P/L/3112192/C/XX/98/B/85 dated 3-3-1986 (2) P/K/3120820/C/XX/100/B/85 dated 8-7-1986 (3) P/K/3110984/C/XX/98/B/85 dated 4-2-1986 and (4) P/K/3070179/C/XX/98/B/85 dated 10-6-1985 and the import licences were valid for the import of goods mentioned in column 4 items as allowed against Export Product Group C-11-3/C-11-4 of Appendix 17 of the Import Policy AM 1985-88. Para No. 5 of Appendix 17 relates to Import Policy for Registered Exporters. The learned Collector to his order-in-original (internal page nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The packages were opened, inspected and a sample of the item tested. The test report confirmed that the sheets were made of Polyvinyi Chloride Compound. One side of the sheet is of black colour and the other side is of different colours having designs and check patterns. 22. The appellant in reply, in the context of the test report, on page 3 of the reply to the show cause notice has written as under:- ...Even the technical opinion obtained by your Custom House itself confirmed that the goods are sheets made of Polyvinyl Chloride compound which is known as PVC. It is submitted that the intention of Appendix 17 is to allow import of raw-materials and such consumables which are specifically mentioned on the licence and as per column 4 of the said Appendix. It is submitted that nowhere in the Appendix or in the prior paragraphs of Chapter 17 or in the entire Policy, it is mentioned that the PVC sheets should be of a particular kind. It is the intention of the framers of the Policy to allow imports of those goods which are made out of PVC compound and can be called PVC sheets. Your own test report confirms that they are PVC sheets. It is submitted that PVC being the genus the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him do not help him. Accordingly we confirm the findings of the lower authority for assessing the goods at US $1.157 per Sq.m. CIF Cochin. However, keeping in view the totality of the facts and circumstances of the case and to meet the ends of justice we reduce the redemption fine to Rs.1,00,000/- (Rupees one lakh only) from Rs. 1.5 lakhs and penalty from Rs.1,00,00/- to Rs. 75,000/- (Rupees seventy-five thousand only). Except for this modification, otherwise the appeal is rejected. The Revenue authorities are directed to. give consequential effect to this order. 25. [Contra per: I.J. Rao, Member (T)]. - I am unable to agree with the order passed by my learned Brother. 26. Two questions arise in this appeal. The first pertains to the validity of the licence leading to the question as to whether the imported goods are PVC sheets or not. The second question relates to value leading to the question whether the value declared and invoiced can be accepted or not. 27. In respect of licence it was the plea of the appellants that till March, 1986 the same goods were being considered by Customs as PVC sheets to be assessed at higher rate. Now with the change in Tariff the Customs ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le percentage in view of the better finish of the floor coverings. I see this argument as reasonable because the PVC sheets appear to have been thicker though poorly Finished as compared to the present importation. The reasonable approach would be to take weight per sq.mtr. and work out the value accordingly. I have considered the calculation sheets at pages 61 of the paper book. On the basis of the calculation it is noticed that on weight basis the floor coverings imported by the appellants are about 25% costlier than PVC sheets which are only raw material. The Collector s order does not disclose any acceptable reason for dis-regarding the invoice value. Even if the value of the PVC sheets is taken as the basis for comparison the margin of 25% in arriving the higher value of floor coverings is reasonable. It is settled law that only when the invoice value cannot be accepted for valid reasons, resort can be made to comparison of like goods or similar goods. Here apart from the absence of any valid reasons for rejecting the invoice value, the comparison (for valuation) was made with goods which cannot be considered to be like or similar goods. Therefore, the ratio of the judgment in ..... 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