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TMI Blog2007 (12) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... uments and that the imported goods were of international standard. On comparing prices of similar goods as the imported ones, it was observed by the authorities that the prices declared were much lower than the corresponding prices declared by Sun Micro Systems, Bangalore, First Computers, Chennai and Wipro Infotech, Chennai. Prices were also lower than the corresponding international prices. In view of the mis-declaration of value and suppression of brand and model of the imported goods as well as suppression of import of certain goods, declared prices appeared to be not acceptable as transaction value. As prices of contemporary imports of similar/identical goods were not available, the assessable value could not be determined under Rules 5 and 6 of the Customs Valuation (Determination of Prices of Imported Goods) Rules, 1988 (CVR). As the relevant data were not available, the values could not also be determined under Rule 7 and 7A of the CVR. It appeared that the assessable value could be determined only by resorting to Rule 8 of CVR. 2. In respect of Sl. Nos. 1, 6, 7, 10, 11 and 12, the lowest of the contemporaneous import prices of such goods wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orters were not furnished the related documents to establish its comparability. Even in respect of goods set out in the table there were wide differences in price. The goods tabulated had been taken piecemeal. It was unclear how they were comparable. The price of complete system was adopted for appraising imported goods which were parts. Wipro Infotech and First Computers being their competitors their evidence could not be relied upon. It was already found that no price of contemporary imports of similar or identical goods were available. Therefore the comparison attempted was arbitrary. The shipping documents had shown brand names of the goods and declared value could not be rejected on the charge of suppression of brand name. The Department had failed to establish that the transaction value was declared incorrectly. The shipping documents had carried the brand names and statement to the contrary was obtained from Alex Mammen under coercion. Shri Alex Mammen had submitted that the supplier had sourced obsolete models and supplied to developing countries at cheap prices. Such components may not carry a particular brand name and could be used in. any system. The consignment was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected was erroneous and opposed to the basic tenets of valuation. The value declared was transaction value paid for the goods. No evidence showing receipt of extra commercial consideration was available with the department. 4. The 'processors' had been supplied as compliment as there was no market for "Spark II processors" which had become obsolete. They were not aware of the supply of processors, as they had been supplied without their ordering for them. The current value of these processors was US $ 30-40 each and they accepted this liability. They had only imported parts and not complete systems. First Computers had furnished a quotation and not a record of concluded transaction. The proposed appraisement following the price list, in the absence of technical characteristics of those items was opposed to principles of valuation contained in Customs Valuation Rules. They relied on various case law to argue that no penalty could be imposed on them and that the goods were not liable to confiscation. 5. The Commissioner found that unlike the declaration in the Bill of Entry, the imported goods were branded, that 21" colour monitors (Sun/IBM) were of flat screen and the goods decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules Enterprise 6500 Ultra spare driven Cabinet with power Supply modules He found that the importer had not declared the brand and model of the goods imported. He found that M/s. Wipro Infotech, Chennai and First Computers Chennai had imported the following items and their prices were as follows Table D S. No. Description of the imported goods identified during examination Prices of Sun Micro systems, Bangalore (in US$) Prices of Ms. First Computers, Chennai. Prices of M/s. Wipro Computers, Chennai (in US$) Import prices as per B/E No/date (in US$) (FOB) International Price (in US$) (FOB) 1 Sun Brand cabinet with power supply and mother board Ultra spare driven Ultra 60 elite 3D 100 1000 (536454/22-5-03) — — 2 Sun brand server E 450 cabinet with power supply and mother board and CD rom (ultra Enterprise-450) 500 — 2500 — 3 Sun brand Enterprises 4500 cabinet with power supply, 2x mother board, CPU and I/O board, CD rom 800 — 3000 — 4 Rackmounted (7 No. x D1000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & 6 of CVR, 1988 on account of the fact that the goods were procured/supplied in assorted manner without revealing the source of procurement of supply, since the brand and technical parameters of the goods were found to be comparable with the goods under import, I get guided by the value of the goods in the Bills of Entry relied upon in the show cause notice while determining the value using reasonable means under Rule 8 of the CVR, 1988." Moreover, the Bills of Entry relied upon were contemporaneous with subject import warranting no adjustment owing to time gap in imports. He accordingly affirmed the proposal in the show cause notice and adopted the value relied upon in the show cause notice for assessment. For the remaining items in the table he rejected the proposal as the same was based on international prices obtained in quotations. Accordingly, he accepted the declared value of items at Sl. Nos. 2, 3, 4, 5, 8, 9 & 13 of the tables as assessable value. Thus the assessable value of the consignment was revised to Rs. 30,67,453/- from Rs. 10,75,715/- and the duty payable to Rs. 11,84,273/- from Rs. 4,12,391/-. The importer had not declared the brand, capacity and such other tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n though brand and model of these goods were not declared. At the same time goods at Sl. Nos. 1, 5, 6, 7, 10 and 11 were treated as offending goods and their declared value rejected for non-declaration of brand name. Non-declaration of "flat screen" in respect of Sl. Nos. 5, 6 and 7 (monitors) did not constitute a serious omission/suppression to warrant rejection of transaction value. Whereas monitors had to carry brand name, the international practice was not to affix brand name on mother board, CD ROM, power supply etc. embedded inside the cabinet. This position was suppressed from the Department by the Wipro Technologist wantonly. The supplier M/s. Focus Technology, USA had procured obsolete components and had sold in semi assembled form for convenience of packing. Though these were functionally sound, were available cheaply as they were being sold in the international market without any brand name. This was the practice in vogue in computer trade. The Commissioner had observed that no prices of identical goods were available in respect of items at Sl. Nos. 1, 6, 7, 10, 11 and 12. The Commissioner had adopted the prices declared by other importers for these items which he later ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the brand name of the computer parts in the Bill of Entry. On examination it was found that the brand name 'SUN' was not declared in respect of the items cabinet with power supply and motherboard. However, it is the importer's contention that it had declared the description as U 60 and that Ultra 60 was known in the computer trade to be 'SUN' brand. The next two items mentioned at Sl. Nos. 6 and 7 of the table in respect of which the transaction value has been rejected were declared as SUN brand 21" colour monitor and SUN brand 17" colour monitor. Item No. 10 was declared as Ultra 10 Cabinet with power supply, motherboard, CD Rom and 9GB HDD. Ultra 10 is a well known SUN brand item. Sl. No.11 namely key boards and mouse are unbranded. Sl. No. 12 was declared as ATX E 250 Cabinet with power supply and mother board. As per the examination the item was found to be Enterprise 250 cabinet with power supply and mother board. As regards other items Sl. No. 5 had been declared as IBM Monitors. Sl. No. 13 was declared as 6.5 K cabinet with power supply modules whereas the actual description was Enterprise 6500 Ultra spare driven cabinet with power supply modules. 8.1 We find from the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner are considerably weakened by these infirmities. In fine we find that the Commissioner rejected the transaction value without adequate and acceptable legal justification. Presence of P2 and P3 processors along with the Ultra 60 computer parts, we find, is insufficient to consider that description of this item was mis-declared. We find the argument of the appellants that these were components of outmoded systems which apparently did not have any demand were supplied as compliment not totally unacceptable. The invoice or the packing list or the purchase order did not show this item. We are inclined to grant benefit of doubt in this regard to the importer. 10. There is no allegation that the supplier and the importer are related. There is no evidence of any remittance of consideration to the supplier in excess of the price declared in the Bill of Entry. It is settled that to reject the transaction value the burden is on the department to establish that declared value is different and lower than the consideration exchanged for the goods. We also find that once the adjudicating authority gave a categorical finding that the impugned goods could not be considered to be iden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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