MUNNA GIFT CENTRE Vs. COMMISSIONER OF CUSTOMS, CHENNAI

JUDGEMENT

(1.) THE Commissioner of Customs vide his Order -in -Original No. 88/CAU/Chennai/60/2000, dated 11 -12 -2000 has rejected the transaction value and enhanced the assessable value from US $ 0.613 per piece (GIF) to US$ 0.81 per piece CIF. He has also confiscated the goods under Sections 111(d) and 111(m) of the Customs Act, 1962 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992 with an option to redeem the goods on payment of a fine of Rs. 8.80 lakhs. He has also imposed a penalty of Rs. 80,000/ - under Section 112(a) of the Customs Act, 1962 on the importer.

(2.) LD . Counsel, Shri A.K. Jayaraj appeared on behalf of the appellant and submitted that they had imported the goods vide Bill of Entry No. 279372, dated 21 -6 -2000 for clearance of 44,000 pieces of "Panasonic video (Blank) cassettes NV -E 180 HAD" declaring a unit price of US $ 0.6 (FOB) (US $ 0.613/pc (CIF) under Invoice No. 20120, dated 20 -5 -2000 raised by M/s. Ibrahim Abdullah Hassan Electronics Est. Dubai, U.A.E. They had sought clearance of the consignment under CTH 8523.90 at 25% (BCD) + 16% (CVD) + 4% (SAD). He further submitted that these goods were classifiable under ITC (HSN) code 8523 9003.90 wherein "Video cassettes" were "restricted goods" up to 31 -3 -2000. Thereafter with effect from 31 -3 -2000 vide Notification No. (RE -2000)/1997 -2002, dated 31 -3 -2000 the item had been shifted from "restricted item" to "free list". Therefore, their Bill of Entry which has been filed on 21 -6 -2000 is after this date and therefore no import license is required for this item which has been shifted from restricted list to free list with effect from 31 -3 -2000. Since there is no import license involved the goods cannot be confiscated and no penalty can be imposed on them. As regards value of the goods, ld. Advocate had submitted that they had submitted the invoice and until the invoice is covered under Rule 4(2) of the Customs Valuation Rules, 1988 the same cannot be discarded and has to be accepted by the customs authority. He further submitted that they had accepted the enhancement since they were interested in clearing the goods and this acceptance in no way effects the right of the appellant to go on appeal after the goods is cleared. Ld. Advocate relies on the judgment of the Tribunal in the case of Laxmi Colour Lab v. CC as reported in 1992 (62) E.L.T. 613 wherein it has been held that acceptance by assessee of enhanced value proposed by department due to his urgency to clear the goods does not preclude him from challenging in enhancement by way of appeal. This judgment of the Tribunal has been confirmed by the Hon'ble Supreme Court as reported in 1997 Vol. 90 Part 3 A183 and the appeal of the department has been rejected by the Hon'ble Supreme Court. Further Ld. Advocate relied on the judgment of the Apex Court in the matter of Etcher Tractors Ltd. v. CC, Mum -bat as reported in 2000 (122) E.L.T. 321 (S.C.) in which it has been held that the transaction value cannot be discarded until there is contemporaneous import and it is only after the transaction value is rejected under Rule 3(ii), the value shall be determined by proceeding sequentially through Rules 5 to 8 - - conversely, if the transaction value can be determined under Rule 4(1) and does not fall under any of the exception in Rule 4(2), there is no question of determining the value under the subsequent Rules. He has also relied upon this Bench judgment rendered in the case of CC v. Tapan Trading Company, Bombay.

(3.) HEARD both sides. We find that no import license is required on these items after they were shifted from the category of restricted item to free item vide Notification No. (RE -2000)/1997 -2002, dated 31 -3 -2000. Since these goods have been imported after this item was shifted from restricted list to free list they are not required to have license therefore, the order of the ld. Commissioner confiscating the item of the import and imposition of fine and penalty is bad in law and therefore we set aside the impugned order. As regards the enhancement of value, the declared price of US $ 0.81 in respect of Bill of Entry No. 238737, dated 24 -9 -99 from M/s. Jacky's Gulf FZE has been compared for identical goods with the invoice price of US $ 0.613/pc (GIF) by M/s. Ibraham Abdullah Hassan, Dubai, U.A.E. under Rule 5 of the Valuation Rules, 1988. In this case there is no finding to discard the invoice produced by them. Further the Bill of Entry pertains to September 99 which is being compared to the Bill of Entry with the import which has been made on 21 -6 -2000. This is common knowledge that electronic goods are getting cheaper in the competitive world and therefore comparing the imports which were made 9 months back is not contemporaneous and cannot be compared. The period for comparing is normally between 3 months. Therefore, the value cannot be compared and they are not identical goods under Rule 5 of the Valuation Rules, 1988. The order of the ld. Commissioner enhancing the value is not in conformity with the law laid by the Apex Court in the matter of Eicher Tractors Ltd. v. CC, Mumbai (supra) and various other decision of this Bench and coordinated Benches in the country. The appeal filed by the appellant is, therefore, allowed by setting aside the order of the ld. Commissioner with consequential relief/ if any. Ordered accordingly.