COLLECTOR OF CUSTOMS Vs. GROVER IMPORTS

JUDGEMENT

(1.) THE appellants imported two consignments of Lignea Cassia weighing 2.303 M.T. and .9.212 M.T. respectively and sought assessment of the goods at the declared value of US 1025 per MT CIF Ex. Bombay. The Customs authorities loaded the price to the rate of Rs. 44.44 per kg. CIF as against declared value of over Rs. 36.74 per kg. They also took the weight of the goods as 50 kg. per package as against the declared weight of 47 kg. per package thus, holding that there was an excess import of 808.50 kgs. The Customs authorities confiscated the goods under Section 111(d) and 111(m) for misdeclaration and non -production of import licence and gave an option to redeem them on a redemption fine of Rs. 50,000/ -. Penalties of Rs. 25,000/ - and Rs. 50,000/ - were also imposed on the appellants for the import of the two consignments.

(2.) THE appellants took the matter in appeal before the Commissioner of Customs (A), New Delhi. They submitted that the actual weight of the consignment was only 47 kgs. per package and the excess weight is on account of the hygroscopic nature of the goods. With regard to value, they submitted that the declared value represented the transaction value and the Customs authorities were not justified in rejecting the transaction value and adopting the higher value of Rs. 44.44 purportedly on the basis of import prices at Bombay. The Commissioner (A) allowed the appeal accepting the explanations and submissions of the appellants. He noted that the goods in question are hygroscopic in nature and absorb moisture from the atmosphere. He noted that the inspection certificate issued by the authorities of the People's Republic of China had accepted the net weight as 47 kg. per package. He also observed that guide book "US Spice Trade 'ASTA' American Spice Trade Association" shows 14% moisture level for Cassia, which would work out to more than 3 kgs. per package. In the light of these facts, he held that there was no logical basis for holding that there was export of excess quantity or that the quantity of import was mis -declared. With regard to valuation, the Commissioner noted that assessment to Customs duty was to be done according to transaction value and in case transaction value is not accepted, the value is to be determined sequentially following Rules 5 to 8 of Customs Valuation Rules, 1988. As against this, the Customs authorities had assessed the goods as per provisions of Rule 6 by applying the analogy of value of similar goods. This has also been done without giving the reasons as to how transaction value was being discarded. The Commissioner also found that the lower authority had not disclosed any documentary evidence to substantiate the basis for his arriving at the higher assessable value. There was only an observation that assessments at Bombay of Cassia was at Rs. 44.44 while it has not been shown that the Cassia under import was of the same brand and quality and that transactions were at the same commercial or quantitative level. The Commissioner held such valuation to be not correct as CEGAT had held in the case of Honesty Trader v. CC [1991 (55) E.L.T. 102] that for the purpose of Section 14(1)(a) comparison of value should be in respect of goods of same physical characteristics, quality, reputation, country of origin and timing of import. The Commissioner also held that the Revenue had not discharged the burden of proving the charge of under valuation as held by the Supreme Court in the case Mirah Exports (P) Ltd. [1998 (98) E.L.T. 3 (S.C.) = 1998 (25) RLT 1 (S.C)]. The Commissioner also relied on the decision of the Supreme Court in the case of Basant Industries v, Addl. Collector of Customs, Bombay [1996 (81) E.L.T. 195 (S.C.)] wherein the Apex Court held that mere comparison of invoices with the invoice of imports of same goods by other importers is not conclusive to prove under -valuation. He also took note of the observation of the High Court of Calcutta in the case of Sushil Kumar v. A.C. Customs [1993 (68) E.L.T. 537] that onus is on the Department to prove with sufficient evidence relating to comparable goods imported in comparable quantity from the same country of origin and the comparable time and place, otherwise invoice value is to be accepted. The Commissioner (A) also noted that the Revenue authorities have not given to the appellant any evidence regarding value of comparable imports to discharge the burden of proving that the declared value did not conform to Section 14 of the Customs Act11 .

(3.) THE present appeals have been filed by the Commissioner of Customs against the aforesaid order -in -appeal of the Commissioner of Customs (A). The appeal states that the order of the Commissioner is not correct or legal on the issue of the quantity under import or the value of the imported goods. It contends that the Commissioner has accepted the difference in weight in the absence of any evidence regarding the actual moisture at the time of export of the goods or their weighment by the Customs. With regard to valuation the appeal contends that the Commissioner has not satisfactorily established why transaction price being taken for assessment at Bombay for similar goods could not be accepted when the billing price was far below the price quoted.