By TIOL News Service

NEW DELHI, OCT 07, 2013: THE appellant filed Bill of Entry for clearing 9335 pairs of Ladies footwear, 1368 pairs of Gents footwear, 10100 Dozen of Socks, 125933.31 Dozen of Watch Battery & 4000 pieces of Baby Optical Frame. The Country of origin of the cargo was declared as 'The People's Republic of China'.

It was found that the value of the above said goods declared by the importer was grossly undervalued as compared to NIDB data and the country of origin in respect of the batteries was declared as China whereas most of them were made in Japan. The adjudicating authority after giving the personal hearing, passed an order rejecting the value of above said goods declared by the appellant and the value of the goods was reassessed on the basis of NIDB data and total value has been re-worked out to Rs. 68,59,210/- instead of Rs. 9,92,573/- as declared the importer. On appeal, the Commissioner (Appeals) confirmed the demand and reduced penalty. Against the order of Commissioner (Appeals), the appellants are before the CESTAT.

After hearing both sides, the Member (J) held:

It is seen that lower authorities have enhanced, the value on the basis of NIDB Data. Commissioner (Appeals) has upheld the order on the ground that Custom authorities have the power to enhance the value in terms of the provision of Rule 9 of the Valuation Rules. However, we find no dispute with the above observation. But value has to be enhanced on the basis of availability of assessable value of identical goods. The authorities below have not referred to the fact that the value as available in terms of NIDB is in respect of the same goods which stand imported by the appellant. It is well settle law that for adopting the value of other imported goods, the same have to be matched in terms of Country of original, time of import, quality of goods and quantity of goods. No such effort seems to have been made by the lower authorities and no such comparison is available on record. The appellant have claimed that the batteries were procured on stock-lot basis. The said plea of the appellant does not stand rebutted by the Revenue, by production of evidence to the contrary. Further, we find that apart from enhancing the value on the basis of NIDB Data, no evidence stand produced on record to reject the invoice value. Further, there is no allegation or evidence to show that the importer has made extra payment to the foreign supplier, in addition to the value reflected in the invoice. As such, we find no justifiable reason to uphold the impugned orders. The same are accordingly set aside and appeal is allowed with consequential relief to the appellant.

However, the Member (T) held:

Since this was a case were value was increased almost 10 fold without having the price of any contemporaneous imports, the decisions relied on by the appellant are not relevant to the facts of the present case because there was mis -declaration of country of origin of batteries. So an enquiry about the value was justified and details of contemporaneous imports were disclosed. The appellant at that time chose not to seek any further details about the contemporaneous imports but accepted the increased value. The totality of facts and conduct of parties have to be taken together rather applying isolated sentences from different decisions to facts of one case to legalize a position that import of such goods at any price is acceptable once it is brought to Tribunal Level. Goods which are not in stock lot cannot become stock lot if a foot ware items are imported along with it. The appeal deserves to be rejected in respect of batteries imported in the said consignment.

The Third Member held:

In respect of batteries the country of origin was declared by the importer as 'Made in China' whereas on examination the batteries were found to be made in Japan and as such there was a mis -declaration in respect of country of origin of the batteries. It is submission of the appellant that the batteries were purchased in stock lot. No evidence has been submitted by the importer in support of his contention that the transaction in respect of the batteries was a stock lot transaction. Number of batteries imported by the appellant is 1 ,25,933 dozen and value of these batteries was declared by the importer as 0.06 USD per dozen (Rs.0.226 per piece). On the basis of NIDB data available with the department in respect of batteries of Japan origin, the department loaded its value to Rs.4 per piece. The lower authorities have applied the NIDB data after taking the lowest value of identical or similar goods found during the relevant period. Therefore, I find that there is no infirmity in respect of applying NIDB data to the batteries imported by the appellant. I therefore agree with the finding given by the Member (Technical) that the appeal in respect of batteries needs to be rejected.

Thus, by majority order, the Tribunal rejected the appeal in respect of watch batteries.

(See 2013-TIOL-1474-CESTAT-DEL)