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TMI Blog2012 (10) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... k statement from the Chemical Examiner in the test report that, since there was no breakage on hearing and cooling, it indicates lower linear coefficient of expansion. How can we conclude whether it is below the level prescribed in the heading or not is not indicated by the Chemical Examiner. We could have appreciated if he stated clearly that it is lower than what is prescribed in the tariff heading. Even this is not forthcoming from the reports. On the other hand, the supplier of the appellants and CGCRI has clearly measured the linear coefficient of expansion and have indicated the same. Under these circumstances, we have no option but to hold that the department has failed to show and prove that the classification of the goods in question would come under 7013 32 00. Whether there was misdeclaration of description by the appellants - Held that:- After opening the packages and inspection, the examining officer had found the goods to be contained in 2 packages and the goods were found to be “Opal Glassware Dinner Sets”. The fact that even after finding the goods to be Opal Ware on examination, the same were allowed to be cleared when the Bills of Entry had been filed as Glassw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke Dinner sets directly from the manufacturer M/s. Wenzhou Huishunda Industrial Trade Co. Ltd., China (for short Wenzhou ). Shri Ajay Vaghani, the second appellant herein, is the Managing Director of the Company. 2. Based on the information gathered on the basis of investigation conducted in respect of another importer in Delhi, several premises of Hamilton were searched. In one warehouse at Silvasa, it was noticed that the glass items received by the appellants were in two packings. The outer packing is imprinted as TREO, Item No., Item Code, Design No., Standard Packing, Case Nos. while the inner packs found to be printed with TREO, Premium Imported Opal Wares, the Logos of Microwave Proof, Dish Washer Safe, Chip Resistant, Freeze Resistant . In the Bill of Entry, description of the goods was found to have been mentioned as Glassware. However, at ICD, Vapi it was noticed that 8 containers of Hamilton were pending clearance from which samples were drawn for testing. After investigation and issuance of show cause notice and adjudication proceedings, the impugned order has been passed which is a common order for imports made under the jurisdiction of the Commissioner of Customs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7013 39 00 Other Kg. 12.5% 5. As already mentioned, the classification claimed by the appellant was 7013 39 00 whereas the proposal by the department is 7013 32 00. It was submitted by the appellants that test report relied upon by the department do not show that the product imported by the appellants satisfies the condition related to coefficient of expansion being less than 5 x 10-6 per Kelvin. 6. Samples were drawn from the consignment pending clearance and according to the test report, the samples under reference were borosilicate glassware , Opal ware containing boric acid ranging from 9.68% to 12.27%, showing no thermal expansion between 0 degree C. to 300 degree C. and no breakage on heating and cooling indicating lower linear expansion. The Chemical Examiner also indicated that the samples received were translucent in nature and according to ASTM standard 162, this type of glass is called Opal Glass. He also stated that the samples have more than 5% boric acid. Therefore, they are of borosilicate glass type (ASTM 162). The samples has been sent for testing of borosilicate content, the thermal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon the statement of the Managing Director, who explained how borosilicate gives strength to the glass. He also rejected the test report of CGCRI on the ground that what samples were forwarded to CGCRI is not known and at what temperature the test was conducted by CGCRI was also not known. 8. From the tariff description and the headings reproduced earlier, it can be seen that the sole criterion required to be fulfilled for items imported to be classified under 7013 32 00, is the linear coefficient of expansion. The test memos had clearly indicated that this aspect is required to be verified. The Chemical Examiner has chosen just to say that since there was no breakage, the thermal expansion is nil. When the heading required specific indication that linear coefficient of expansion is less than 5 x 10-6 per Kelvin, in our opinion, this statement of the Chemical Examiner was not sufficient. In fact, the department should have required the Chemical Examiner to specifically indicate the linear coefficient of thermal expansion. Therefore, when the appellants requested for retest by CGCRI, Kolkatta, it could have been considered. In any case option was available to the departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... glass can be Opal glass, it cannot be other way round. From the tariff description, the classification would depend upon the coefficient of thermal expansion and not merely the percentage of boron oxide or the trade name Opal Glass. 10. In view of the above discussion, the findings of misdeclaration of description and misclassification cannot be sustained. 11. The next is the rejection of transaction value and determination of value. According to the appellants, once there was no misdeclaration of the goods by appellants, the transaction value cannot be rejected since that is the only ground taken. However, we have to take note of the fact that the whole investigation started based on recovery of 2 invoices with an importer in Delhi which showed price of goods imported by the appellant to be much higher when compared to what was declared by them. The transaction value is rejected on the ground that even though the appellant claimed that imports were made according to an MoU, but in reality the MoU was available for only 10 full plate and 7 quarter plate and in respect of their items, they could not produce the MoU. The Commissioner also found that after 2006, there was no f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises of the Managing Director s office etc. did not result in recovery of any incriminating records; the import was directly made by manufacturer; the appellant had long time arrangement and were regular buyers and had imported glassware of more than ₹ 18.5 crores and they had produced evidence to show that the value declared by the supplier at the time of export to the Customs authorities, was the same as was declared in India; as regards price list, appellant has submitted that it is only an offer and subject to negotiations; it was also submitted that M/s. K.P. International have not imported any goods, but there was only negotiations; under these circumstances, Rule 6(2) read with Rule 5(3) of the Customs Valuation Rules is applicable which provides that value of goods similar to goods imported to India should have been adopted. The appellants had produced evidence in the form of Bills of Entry under which others had imported similar goods from same suppliers and such prices were lower than prices adopted in their case and, therefore, differential duty demanded is not sustainable. 13. The claim of such imports by others at lower values has been rejected holding that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants looking to the fact that they have been recognized as a bulk purchaser and have imported in substantial quantities. However, there is no indication as to whether price list of supplier is applicable irrespective of the quantities the purchaser buys and if it is comparable to the point it is purchased by the appellants. 14. The above discussion would show that the Commissioner has not followed proper procedure for redetermination of value and for rejection also while initial grounds for rejection are acceptable after giving an opportunity to the importer and considering the submissions, there has to be a categorical finding as to why the transaction value is not acceptable. In this case the two grounds for rejection of transaction value is mis-declaration of value and inability of the General Manager to explain the difference between their price and price list, dated 9-2-2004 of the supplier. If the General Manager could not explain it at the time of investigation, it does not mean that they could be permanently shut out from explaining afterwards. Therefore, the submissions made during the hearing and in reply to the show cause notice should have been considered. 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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