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Commnr. Of Customs Versus M/s. Aryan Electronics

2015 (5) TMI 240 - SUPREME COURT

Valuation of goods - Demand of differential duty - Redemption fine - Held that:- Comparable instance which was taken into consideration by the Commissioner was not that of "identical goods" but "similar goods". This is so stated by the Commissioner in his order itself. - when the Commissioner rejected the transaction value declared by the respondent applying Rule 10A of the Customs Valuation Rules, 1988, on that basis he held that Rule 4(1) would not apply. Thereafter he proceeded sequentially f .....

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on those instances by the Commissioner cannot be faulted.

Price of ₹ 58/- has not been accepted by the Commissioner, and rightly so, by giving a very valid reason, namely, even in respect of that import by the importer declaring the value of ₹ 58/-, a show cause notice had been issued by the Department and the case was under scrutiny. In the show cause notice which was issued by the Department the price proposed was ₹ 90/- per piece. Thus, the entire basis of the Tri .....

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0 lakhs and the penalty of ₹ 5 lakhs which is imposed in the facts of this case is on a higher side. Insofar as redemption fine is concerned, the same is reduced to ₹ 6 lakhs which is the equivalent to the differential duty and penalty imposed is set aside altogether.- Decided partly in favour of assessee. - CIVIL APPEAL NO. 709 OF 2005 - Dated:- 29-4-2015 - A.K.Sikri And Rohinton Fali Nariman JJ. For the Appellant : Mr. K.Radhakrishnan,Sr.Adv. Mr. T.C.Sharma,adv. Ms. Binu Tamta,Adv. .....

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;. In the Bill of Entry which was filed by the respondent for clearing of the aforesaid imports, the value of the goods was declared at US $ 0.72 per piece and total value of US $ 21,600 was arrived at in the aforesaid import. In support of this declaration of value, the respondent had produced Bill of Lading dated 14.4.2003 and invoice dated Since the goods were not purchased directly from the manufacturer but from a trader, the invoice produced was that of the trader who had sold the goods to .....

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oses was not the true value of the goods, the Department sought clarification from the respondent vide letter dated 23.5.2003 regarding brand name. In this communication the respondent was also asked to justify the declared value. The respondent replied vide letter dated 28.5.2003 stating that only the eye of the lens with mechanism was branded and other parts like motor parts etc. were not branded and were made in China. It was also stated that only a few boxes were bearing a small sticker of S .....

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of goods to verify their contention that only few boxes were having stickers of Samsung. The respondent was requested to provide information regarding goods packed in branded boxes and the goods packed in unbranded boxes. They were also asked to submit manufacturer's invoice as they had informed that only eye of lens was provided by Samsung and rest of the parts were made in China and other information was also solicited in this communication. The Department also conducted a market enquiry i .....

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nt learnt that lens with mechanism - parts of VCD that had been imported at the said Port by some parties were cleared at a higher value. The ICD Tughlakabad also provided the information that those goods which were imported showing the higher value were similar to the samples forwarded by the customs authorities from the consignment of the impugned goods. After collecting the aforesaid information the show cause notice dated 5.9.2003 was issued to the respondent. The respondent filed its reply. .....

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also accepted that no evidence of import of "identical goods" was available. Applicability of Rule 5 was, thus, ruled out. In such a situation he invoked the provisions of Rule 6 and referred to ten instances which were collected of similar goods. He also cited five instances which were given by the respondent during the course of personal hearing. Insofar as instances furnished by the respondent are concerned, for reasons recorded in the order he discarded four out of five instances. .....

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This resulted in confiscation of the goods. However, the Commissioner allowed the respondent to clear the goods on payment of differential duty i.e. ₹ 6,11,694/- and on payment of redemption fine of ₹ 20 lakhs. He also imposed penalty of ₹ 5 lakhs on the respondent under Section 112 of the Customs Act, 1962. The respondent, feeling aggrieved by the aforesaid order, challenged the same in appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT .....

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was in the year 1993 and it was contrary to the provision of Section 14 of the Customs Act; (iii) The identical goods were imported at the rate of ₹ 58/- per piece and that was no reason enough to justify the value fixed by the Commissioner. After hearing the counsel on either side we find that on all three counts the Tribunal has committed serious error which has resulted in passing the impugned order allowing the appeal of the respondent. In the first instance, the comparable instance w .....

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the Commissioner rejected the transaction value declared by the respondent applying Rule 10A of the Customs Valuation Rules, 1988, on that basis he held that Rule 4(1) would not apply. Thereafter he proceeded sequentially from Rule 5 onwards. As far as Rule 5 is concerned, again he stated that this would not apply as there was no evidence of "identical goods". It is for this reason he undertook the exercise, as contemplated in Rule 6, by giving the example of "similar goods" .....

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le the import in question took place prior to that date. Insofar as the import by the respondent is concerned, that was on 13.5.2003. Therefore, the instances which were relied upon by the Commissioner of May, 2003 are of the same period and fulfill the requirement of Section 14 of the Customs Act,1962. Insofar as reasoning predicated on import of identical goods at the rate of ₹ 58/- per piece is concerned, again a clear fallacy has occurred in making such observation. We have already poi .....

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