TMI Blog2010 (10) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 130E(b) of the Customs Act, 1962 (for short the Act ) is to the order dated 10th December 2004 passed by the Customs, Excise and Service Tax Appellate Tribunal, (for short the Tribunal ) whereby the appeal preferred by the respondent has been allowed holding that the assessable value declared by the respondent in the bill of entry should be accepted for the purpose of valuation in terms of Section 14 of the Act. 2. M/s. IPCO Enterprise, Thane, a proprietorship concern of the respondent imported a consignment of assorted consumer goods ranging from glass ware, hair dryers etc. to gas filled cylinders and refrigerant-22 gas (R-22). The bill of entry for the said goods was filed on 3rd May 2002, by M/s Vegha Shipping Transport Pvt. Ltd. on behalf of M/s. IPCO Enterprise, whereby the total assessable value of the goods was declared at ₹ 6,75, 796.90/- with duty liability of ₹ 3,86,352/-. 3. On an examination of the bill of entry, invoice dated 17 th April 2002, and packing list issued by one M/s. Plizer Trading, Dubai, certain discrepancies were noticed by the Central Intelligence Unit, and therefore, first check appraisement was ordered. Subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in pieces. If the contention of the learned advocates that value declared is for a set is accepted then the value of these crockery items would become so low that such a proposition itself appears ridiculous. For example, the wholesale price of a single Arc brand, 25 CI, glass mug of France origin in the local markets is ₹ 40/- and of a set of 6 mugs is ₹ 240/-, the declared CIF price of a single same mug, if it is accepted that this price is for a set of 6 mugs as agitated by the learned advocates, would thus be ₹ 0.41 or ₹ 2.46/- per set of 6 pieces. It is beyond any comprehension how the wholesale price of a single or set of this mug in the local markets can be ₹ 40/- and ₹ 240/-respectively if they are so cheap as (sic) declared by the importers. Similar is the situation in case of all other crockery items. The advocates have not given me any explanation for such a vast difference in market values of the goods and the declared prices. On the other hand Shri Abdulla Koyloth, the proprietor of the import firm has, in his letters dated 26,08,02,09.02 and statement dated 13.09.02, accepted the determination of assessable value and the duty liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oice value in the absence of any importation or evidence to reflect upon the flow back of money by the importer to the supplier.................... ........................ 6. We are of the view that in the absence of any evidence to show that the invoice value was not correct and further in the absence of contemporaneous imports of identical goods, the value declared by the appellant should be accepted as transaction value and not to be rejected. In relation to the confiscation of the R-22 gas filled cylinders, the Tribunal held that the confiscation of the said goods was justified on the ground that the said goods had to be imported against an actual user license, which the respondent did not possess. The Tribunal also deleted the penalty levied on the respondent on the ground that since the value enhancement had not been upheld by it, there was no cause for imposition of penalty. 10. Hence, the present appeal. 11. Mr. K. Swami, learned counsel appearing for the revenue, while assailing the order of the Tribunal, strenuously urged that since the respondent had made mis-declarations in the bill of entry in relation to quantity, country of origin and value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the provisions of sub-section (1) of Section 14; 14. Valuation of goods for purposes of assessment.--(1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be-- the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where-- (a) the seller and the buyer have no interest in the business of each other; or (b) one of them has no interest in the business of other, and the price is the sole consideration for the sale or offer for sale: Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50; (1A) Subject to the provisions of sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r goods, in sales to unrelated buyers in India; (ii) the deductive value for identical goods or similar goods; (iii) the computed value for identical goods or similar goods: Provided that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of Rule 9 of these Rules and cost incurred by the seller in sales in which he and the buyer are not related; (c) substitute values shall not be established under the provisions of clause (b) of this sub-rule. 15. Both Sections 14(1) of the Act (as it existed at the relevant time) and Rule 4 of the 1988 Rules provide that the price paid by an importer to the vendor in the ordinary course of commerce shall be taken to be the transaction value in the absence of any of the special circumstances indicated in Section 14(1) of the Act and particularized in Rule 4(2) of the 1988 Rules. Therefore, the Customs authorities are bound by the declaration of the importer unless on the basis of some contemporaneous evidence the Revenue is able to demonstrate that the invoice does not reflect the correct value. (See: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that having regard to the factual scenario emerging from the record, the Tribunal has failed to apply the procedure envisaged in Section 14(1) of the Act read with 1988 Rules for determining the value of the imported goods. Having carefully perused the Tribunal's order, in particular the above-extracted paragraph, we are convinced that the finding of the Tribunal in para 6 (supra) of the impugned order is clearly perverse and cannot be sustained, particularly in light of the fact that the information collected by the revenue from the market, veracity whereof was not questioned by the respondent, has also not been examined by the Tribunal. Importantly, the Tribunal has also overlooked the statement made by the respondent on 13th September 2002 under Section 108 of the Act, whereby he admitted that there was difference between the items declared, and the items actually seized by the Customs authorities, and that the value arrived at after market enquiries was acceptable to him. The said statement was not contested by the respondent either before the Commissioner or the Tribunal. 19. In light of the foregoing discussion, we are of the opinion that the Tribunal needs to re-e ..... 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