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TMI Blog2007 (12) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Focus Technology International, USA, a trader. The invoice and other documents did not show the brand and model of the imported goods. During investigation, in his statement dated15-10-2003, Shri Alex Mammen, power of attorney holder and husband of the Propriterix Smt. Juliet Mammen stated that he had negotiated the price with the supplier and placed orders through internet and that they had not mentioned the brand "Sun Computers" in the import documents and that the imported goods were of international standard. On comparing prices of similar goods as the imported ones, it was observed by the authorities that the prices declared were much lower than the corresponding prices declared by Sun Micro Systems, Bangalore, First Computers, Chennai and Wipro Infotech, Chennai. Prices were also lower than the corresponding international prices. In view of the mis-declaration of value and suppression of brand and model of the imported goods as well as suppression of import of certain goods, declared prices appeared to be not acceptable as transaction value. As prices of contemporary imports of similar/identical goods were not available, the assessable value could not be determined under R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enterprise 6500 Ultra spare driven Cabinet with Power Supply modules. - 460000/- The assessable value of goods covered by the impugned Bill of Entry No. 528744 dated 8-9-2003 thus worked out to Rs. 45,38,642/- as against the declared value Rs. 10,75,715/-. Duty payable worked out to Rs. 17,58,088/- as against Rs. 4,12,391/-. In reply to a show cause notice issued for adjudicating the mis-declaration and determining the value and duty, the importer submitted as follows. 3. The Department had erred in relying upon the price of the goods in India; it was not certain whether the price of imported goods or of indigenous goods were being compared for assessment of impugned goods. Had the goods compared been imported goods, the importers were not furnished the related documents to establish its comparability. Even in respect of goods set out in the table there were wide differences in price. The goods tabulated had been taken piecemeal. It was unclear how they were comparable. The price of complete system was adopted for appraising imported goods which were parts. Wipro Infotech and First Computers being their competitors their evidence could not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It was a world wide practice in computer trade. M/ Focus Technology was a dealer like the supplier of First Computers, M/s. MEM-X. Therefore, the purchase prices of First Computers were not particularly reliable for comparison. Certain items were valued adopting international price declared by First Computers. These price lists had not been furnished to them. Therefore, they were not in a position to know whether the prices were comparable. The invoice against which M/s. First Computers imported similar/identical goods and also the price list price or international prices quoted by M/s. First Computers were not furnished to them to enable them ascertain the exact product configuration and the nature of parts; that the basis on which the declared value had been rejected was erroneous and opposed to the basic tenets of valuation. The value declared was transaction value paid for the goods. No evidence showing receipt of extra commercial consideration was available with the department. 4. The 'processors' had been supplied as compliment as there was no market for "Spark II processors" which had become obsolete. They were not aware of the supply of processors, as they had been s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in Japan (Flat screen) 7 17" colour monitors (SUN) 17" colour monitors (SUN) Model CHB7727L 8 D1000 Hard disk Cabinet with power supply StorEdge D1000 Hard disk Cabinet with power supply 9 32 X CD Rom Drive 32 X CD Rom Drive Model No. XM 62018-TOSHIBA 10 Ultra 10 cabinet with supply, Mother board, CD Rom with and 9GB HDD power Ultra 10 cabinet (creator) with power supply Mother board, CD Rom "Processor" (processor not declared) 11 Keyboards and Mouse Keyboards and Mouse 12 ATX E 250 Cabinet with power supply and Motherboard Enterprise 250 Cabinet with power supply and Motherboard 13 6.5K Cabinet with Power Supply modules Enterprise 6500 Ultra spare driven Cabinet with power Supply modules He found that the importer had not declared the brand and model of the goods imported. He found that M/s. Wipro Infotech, Chennai and First Computers Chennai had imported the following items and their prices were as follows Table D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Mother board 350 700 (536454/22-5-03) — 2670 13 Enterprise 6500 Ultra spare driven Cabinet with Power Supply modules. 1600 — 10,000 — He found on comparison that prices of many goods had been declared lower than prices noticed for identical goods and that brand and model of the impugned goods were suppressed to facilitate mis-declaration of value. They did not declare processors. For these reasons he rejected the declared value as transaction value. He found that there were no contemporaneous imports of similar/identical goods. So Valuation Rules 5 6 could not be resorted to. For want of relevant data Rule 7 7A also could not be resorted to. Therefore, value had to be determined under Rule 8 of CVR. He found that in respect of items at Sl. Nos. 1, 6, 7, 10, 11 12 of the tables, prices of Sun brand computers and parts imported by M/s. First computers, Chennai or M/s. Wipro Infotech Chennai, were the least. He observed that "Even though the goods covered in the relied upon Bills of Entry are not fit to be considered as identical/similar goods for dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - under Rule 8 of CVR. He confiscated goods at Sl. Nos. 1, 6, 7, 10, 11 12 valued Rs. 25.6 lakhs under Section 111(1) (m). He offered redemption of these goods on payment of fine of Rs. 4 lakhs. He imposed a penalty of Rs. 2 lakhs on Xpress Computers and Rs. 1lakh on Alex Mammen under Section 112(a) of the Act. Remaining goods at Sl Nos. 2, 3, 4, 5, 8, 9, 13 valued Rs. 5,07,389/- were allowed to be cleared on payment of appropriate duty. 6. In the appeal, the following major grounds have been taken against the impugned order. The charge of suppression of brand name of the imported goods was incorrect as the internationally accepted codes for the systems manufactured by multinational companies such as ULTRA of Sun Micro Systems and P270 for IBM were declared. The Commissioner allowed himself to be guided by the opinion of the competitors of the importer namely Wipro Infotech and First Computers. Examination of the goods by the representatives of the competitors was conducted in the absence of a representative of XC. The request of the importer to cross-examine the experts of Wipro and First Computers had been turned down. The Commissioner had accepted the value of items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records and the submissions by both sides. We find that the Commissioner has resorted to valuation under Rule 8 of some of the goods covered by invoices while accepting the declared value in respect of the remaining items. We find substance in the submission by the importer that internal components of computer systems do not bear brand name and that these are sold in the international market at cheap prices when they become outmoded. Major manufacturers of computers source these components from manufacturers who also sell the same goods in the spare market. Commissioner has found that the imported goods are assorted items. They are not complete systems. These lack parts required to make complete systems and would be sold after cannibalising. Or missing parts would be fitted in the incomplete systems. For these reasons the Commissioner could not find the impugned goods to be identical or similar to those imported contemporaneously or otherwise. However, he described the same as identical and adopted prices of items imported by some other importers. This we find is not consistent with the valuation provision 8. The Commissioner rejected the transaction value of a few items on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vers items of SUN brand, Toshiba and IBM. The assessee's averments that the supplier had procured these goods from different sources and could procure them at low prices in the international market appears plausible and acceptable. 9.1 The importer had challenged the comparison as arbitrary on the basis that there were discrepancies in technical characteristics between the goods compared. It was claimed that item at Sl. No. 1 had a different configuration inasmuch as the imported goods were of 296MH3 capacity and the item compared was of 400 MH3 capacity. Such claim was not limited this item. The Commissioner rejected these claims as not backed by documentary evidence. However, the appellants had sought cross-examination of the representatives of First Computers, Chennai and Wipro Infotech, Chennai who were consulted on the comparability of the impugned goods to those imported by First Computers and also as regards valuation. We find that it was not proper that the Commissioner denied cross-examination of these technical personnel. The importer had also expressed their grievance that the technical characteristics of the goods whose prices were referred to assess the impugned go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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