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TMI Blog2006 (7) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Bill of Entry, rejecting the value thereof declared by the appellant, under Rule 10A of the Valuation (hereinafter referred to as "the Valuation Rules") and redetermined the same at Rs. 2122.59, per sq. mtr. and increased the value from Rs. 6,77,944.32 declared by the appellant to Rs. 95,46,096/- under Rule 8 of the Valuation Rules. The Commissioner also imposed a penalty of Rs. 10 lakhs upon the appellant under Section 112 of the Act. FACTS 1.2 The appellant imported 366 Rolls containing 12288 kgs. Of Rubber Coated Fabric (Surplus) Assorted Colours Sized and length (hereinafter referred to as "the said goods") from M/s. Masood Sadiq Trading Est, Sharjah, U.A.E. (hereinafter referred to as "Overseas supplier") under Invoice No. MS/257/2005 dated July 13, 2005 of value US Dollars 15360 CIF, Calcutta. The Invoice, Packing List and Bill of Lading forwarded by the overseas supplier disclosed the nature of the goods, nature of packing, quantity, net weight, the Shipping documents contained no mention of country of origin nor was the Certificate of Origin included in the shipping documents sent. The HS Code under which the goods were classified by the importer was 5906.99. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing "Seconds quality" as claimed by party vide letter 5-9-05 C/E to also report how much wastage can be allowed if goods found to be seconds quality. Any printed material found with the goods may please be sent to group Rep. Sample of all types/colours may be forwarded to group clearing withheld." And on September 21, 2005, pursuant to the aforesaid re-examination order of the Group 100 per cent of the said goods were re-examined in the presence of the Deputy Commissioner of Customs BL (CFS), Shed Appraiser and Chartered Engineer. Examination Report dated September 21, 2005 under the joint signatures of Shed Appraoser Deputy Commissioner, BL (CFS) read as under : "Opened the container & re-examined the goods by opening 100% pkgs for appraisement in presence of DC BL (PFS) & Chartered Engineer, checked declaration, particularly the qty in square metre w.r.t. the detailed packing list have been found as per Chartered Engineer's report, which is duly signed & attached with the B/E No. printed materials have been found with the goods. Rep. Samples of all types/colour have been drawn & sealed in presence of party's Rep. and forwarded to C.H. Group for inspection. Goods with held till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... msp;There are four quality of material in the consignment 7. Invoice rate is flat for all qualities. A copy of the aforesaid report dated September 19, 2005 is at pages 31 to 34 of the Appeal Petition. On or about September 23, 2005, said Chartered Engineer submitted report marked ADENDUM REPORT dated September 23, 2005, reference to Report No. SC/MI. 450 dated September 19, 2005, wherein he stated inter alia as follows :- Defects The subject matter is used in Offset printing machines as Rubber blanket to transfer ink to master cylinder roller. Any defect on the rubber blanket will interrupt proper printing. Blankets are made to sizes and if any defect located in between, that particular size have to be rejected. The defect, which appeared in the middle, whole width to be rejected upto the length of the damage marks. Damages located are as follows - 1. Scratch marks 2. Water strain marks 3. Hardness more than the specified limit Material is of second quality, so damages are inherent in nature. Salvage The salvage material has alternative use, may be used as buffer liner under the Rubber Blanket Roller. The value of the salvage may be considered as 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to classify the said goods under Tariff Heading No. 4016 the Commissioner had proceeded on a non-existent basis. This being the only basis for classifying the said goods under Tariff Heading No. 4016, on this ground alone the tariff classification of the said goods arrived is invalid, untenable, erroneous and unsustainable. (b) In paragraph 10 of the said order, it has been observed by the Commissioner that as per the Directorate of Valuation ("DOV") data the value of contemporaneous import of printers blanket of European origin (UK) at (different Ports of India ranged from Rs. 1557 to Rs. 7466 per sq. metre and that "most of the imports took place at the unit price of Rs. 2122.59 per sq. metre or US.$48.57 per sq. metre". On this premises, the Commissioner decided the value of the imported goods at Rs. 2122.59 per sq. metre in terms or Rule 8 of the Customs Valuation Rules, 1988 read with Section 14(1) of the Customs Act, 1962. Significantly, in the said order, neither the DOV date documents have been disclosed nor these was disclosed any particulars which evidenced alleged imports of most of the imports at the unit price Rs. 2122.59 per sq. metre during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of classification was made Bona fide. A mere claim of a classification, based on bona fide reason to believe the same to be applicable as made, cannot be a reason to arrive at a misdeclaration envisaged under Section 111(m) of the Customs Act following the Apex Court's is the law as held in Northern Plastics case 1998 (101) E.L.T. 549 (S.C.). The confiscation liability under Section 111(m) on this ground of classification claim made cannot be upheld. 2.3 The concerned officers of the Appraising Group had specifically ordered for the re-examinaiion of 100% goods, in the presence of Assistant Commissioner (Dock) and a Chartered Engineer to ascertain whether the goods are of Seconds quality and to determine the square metres of the subject imported goods, the Chartered Engineer in his reports dated September 19, 2005 specifically mention that the consignment is of second quality and that a portion of the material under import may be used as rubber blanket in offset printing machine and for that purpose sheet is to be cut to sizes and in the said process there will be some wastage; however, for the said purpose the shore hardness should be between 32 to 40, whereas 50% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it can be accepted & concluded that the claim made of UK origin of Second quality goods, is induced, motivated, made on an assurance of the Officers, it is very much probable, may possible that, not being well conversant with the procedures, the importer mentions the origin of goods as UK. There are no Rules of Origin shown to us or relied by Commissioner to arrive at the goods being held to be of UK Origin. Significantly, neither in the examination of goods nor in the re-examination of the goods it has been found that the said goods are of UK origin. Even the Department has not produced any evidence to show that the said goods are indeed of UK origin. The Commissioner has therefore erred in holding, that the appellant had produced documents to show that the goods are of UAE origin. No such document, as aforesaid, was or could be, produced by the importer. The declaration was made in the circumstances mentioned. Hence, the same cannot be made a ground to penalize and/or hold that there was mis-deciaration. A declaration induce coerced by an act of non clearance by the Officers, as in this case cannot be a misdeclaration. 2.5 Not only the Chartered Engineer's Report but also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner has sought to discard the Chartered Engineer's Report on absurd and misconceived reasonings, which have no merit or substance whatsoever. The Commissioner has erred in holding that the report of the Chartered Engineer was redundant on the ground that since the subject goods are consumable item, it will not require examination, in presence of a Chartered Engineer, as per guidelines under Public Notice No. 238/95 dated November 20, 1995. He failed to appreciate, that the order, for examination, in presence of Chartered Engineer, was given by his own proper Officers engaged in assessment. The examination was conducted in presence of his own officers who countersigned the said examination report of Chartered Engineer. Therefore, now the Commissioner cannot ignore or overlook the said report and hold the same to be redundant. The fact that goods are damaged and/or Second is clearly borne out from the examination report itself irrespective of the fact whether the goods were further examined by Chartered Engineer and his own officers. The said report of the Chartered Engineer is binding on the Department as an Expert opinion brought on record by the Department as they had soli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant could not be accepted and that the said goods were to be considered of standard prime quality, the lowest value in the DOV data, which is Rs. 710.87 per sq. metre had to be taken for determining the value of the said goods and not the imaginary figure of Rs. 2122.59 per sq.metre as contained in the said order. (d) The Commissioner has erred in rejecting the declared transaction value applying Rule 10A of the Valuation Rules. This Rule provides that when the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents and other evidence. In the instant case, it has not been shown that importer was intimated to the effect by the proper officer that they had any doubt about the truth or accuracy of the value declared. Since the condition precedent for invoking Rule 10A has not been fulfilled Rule 10A of the Valuation Rules cannot be invoked in the instant case. 2.8 (a) In this view, the valuation mis-declarations are not established. The Commissioner order to confiscate the said goods under Section 111(m) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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