COMMISSIONER OF CUSTOMS Vs. YAMAS GEMS

JUDGEMENT

(1.) THE respondent imported a consignment of cut and polished precious and semi -precious stones, rough of semi -precious stones and filed a Bill of Entry No. 1103, dated 20 -3 -2008 for their clearance. In the Bill of Entry, the value of unit price of the Cut Rubilite was declared as 1.65 US$ per ct., the value of the Cut Emeralds was declared as 1.25 US$ per ct. and the value of Rough of Rubilite was declared as 25 US$ per ct. The total declared value of the goods imported was US$ 18,717.82 (Rs. 1,12,744/ -). The department was of the view that the value of the cut rubilite and cut emerald has been deliberately misdeclared, as the same is much less than the value of the rough rubilite which is 25.00 US$ per carat. On this basis, the department rejected the declared value of the cut & polished stones and ascertained their value with the help of a panel of Gem experts, who ascertained the value as Rs. 7,41,879/ - as against the declared value of Rs. 1,12,744/ -. Accordingly, after issue of show cause notice, the jurisdictional Addl. Commissioner vide Order -in -Original dated 9 -4 -2008 rejected the declared assessable value and enhanced the value of the goods to Rs. 7,41,879/ - and also ordered confiscation of the goods viz. cut rubilite and cut emerald under Section 111(m) of the Customs Act, 1962 for misdeclaration of their value. The confiscated goods, however, were allowed to be redeemed on payment of fine of Rs. 1,50,000/ - and besides this, penalty of Rs. 1,00,000/ - was also imposed under Section 112(a) of the Customs Act, 1962. On appeal being filed against this order of the Addl. Commissioner, the Commissioner (Appeals) vide order dated 16 -1 -2009 set aside the Addl. Commissioner's order holding that as there is absolutely no evidence of contemporaneous import of similar or identical goods in comparable quantity, there is no justification for rejection of the declared transaction value. Against this order of the Commissioner (Appeals), this appeal has been filed by the Revenue. Heard both the sides.

(2.) SHRI Govind Dixit, learned Departmental Representative, assailed the impugned order and emphasized that the declared value of cut rubilite and cut emeralds has been grossly underdeclared and this fact is clear from the fact that while the declared value of the cut rubilite and cut emerald is 1.65 US$ per carat and Rs. 1.25 per carat respectively, the declared value of the rough rubilite is 25 US$ per carat, which is not possible, as the price of rough rubilite stone is higher than the value of the cut & polished rubilite and that this shows that in order to evade the payment of duty, the value of cut rubilite and cut emerald has been misdeclared, as while the rate of duty on the rough rubilite is nil, the cut & polished precious & semi -precious stones attract Customs duty. He, therefore, pleaded that impugned order is not correct.

(3.) WE have considered the submissions from both the sides and perused the records. The dispute is only about the value of the cut rubilite and cut emerald and their declared value of 1.25 US$ and 1.65 US$ per carat respectively is sought to be rejected on the ground that the price of cut rubilite and cut emerald cannot be less than the price of the rough rubilite stone, which in this case is Rs. 25 US$ per carat. Accordingly, the department has got the value of cut & polished rubilite and cut & polished emeralds ascertained by a Panel of Gems experts. However, on going through the opinion of the experts as discussed in the Order -in -Appeal and in the Order -in -Original, we find that the experts have simply given the value without mentioning as to whether the cut & polished rubilite and emeralds and rough rubilite are of the same quality or are of different quality. The value of the cut & polished precious and semi -precious stones depends upon their quality and grades and there can be wide variation on this basis. The opinion of the experts' panel which has been relied upon by the Department does not mention the quality. It is not known as to whether the rough of rubilite whose declared value is US$ 25 per carat, is of superior grade/quality than the cut & polished rubilite & emeralds. Moreover, there is no evidence of contemporaneous import of identical or similar goods i.e. cut & polished rubilite and emeralds of the same quality in comparable quantity at the prices which are sought to be adopted by the department. In view of the above discussion, we are of the view that there is no justification for rejecting the declaration transaction value and as such, there is no infirmity in the impugned order. The Revenue's appeal is therefore, dismissed.