Mis-declaration of Goods - Reliance on Test Report of Privat Research Institute

PJ/Case Laws/2011-12/1509

Case: SHEEL CHAND INDUSTRIES VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI

Citation: 2011 (274) E.L.T. 579 (Tri- Del.)

Issue:- Whether test reports relied upon by Revenue of Sri Ram Institute of Research is based upon standards of a private website can be relied upon to say that goods in question are Palm Fatty Acid Distillate?

Brief Fact:- Appellant- importer made import of goods and declared the goods as Mixed Fatty Acid and declared the value as US $ 210 per M.T. The goods were provisionally released after taking samples. On the basis of test a report which shows that the goods in question are Palm Fatty Acid Distillate, Revenue is of opinion that the importer had misdeclared the description of the goods and also misdeclared the value of the goods. The Show Cause Notice was issued for demand of differential duty as well as for imposition of penalties. The adjudicating authority confiscated the goods and allowed redemption of the same on payment of redemption fine of Rs. 2,00,000/- (Rupees Two Lakhs only) and also enhanced the value from US $ 210 per MT. to US $ 420 per M.T. and also confirmed the differential duty and imposed penalties.

Appellant’s Contention:- The Contention of Appellant is that the test reports which is relied upon by the Revenue of Sri Ram Institute of Research is based upon standards on a private website therefore the same cannot be relied upon to say that goods in question are Palm Fatty Acid Distil-late. It is also submitted that as samples were sent to C.R.C.L. and report is not complete therefore the finding of the adjudicating authority that importer misdeclared the description of the goods is not sustainable. In respect of valuation the contention of the Appellant is that Revenue relied upon the imports made by other importers in respect of Palm Fatty Acid Distillate as mentioned in Annexure 3 & 4 of the Show Cause Notice. As per Annexure 3 & 4 of the Show Cause Notice import from Malaysia and Sri Lanka origin respectively the price varies from US $ 170 per M.T. to US $ 450 per MT. and As per Rule 5 of Customs Valuation :- Rule 5(3). "In applying this rule, if more than one transaction value of identical goods is found, the lowest of such values shall be used to determine the value of imported goods”. The contention is that as the lowest value is US $ 170 per M.T. in case of Palm Fatty Acid Distillate imported from Malayasia and US $ 200 per M.T. case of goods imported from Sri Lanka hence in this situation the declared price by the Appellant is much higher than the lowest price as per Annexure 3 & 4 of the Show Cause Notice. Hence the demand is not sustainable.

Respondent’s Contention:- The Revenue relied upon the statements of the partners of the firm t the actual price of goods is US $ 420 per M.T. Revenue relied upon the international bulletin to show that the price in the international market of Palm Fatty Distillate at more than US $ 400 per M.T. Revenue also relied upon the test reports which shows that goods in question are Palm Fatty Oil Distillate. It is also submitted by Revenue that in the present case the adjudicating authority invoked provision of Rule 8 of Customs Valuation Rules.

Reasoning of Judgment:- The Tribunal found that Appellant declared the goods as Mixed Fatty Acid and as per test report, the goods were Palm Fatty Acid Distillate. The test report shows that sample consisted of four different types of acids. For ready reference one of the test reports is reproduced below:-

The test report shows that the sample was of mixture of different fatty acids therefore in these circumstances the Tribunal found no ground to conclude that the importer had misdeclared the goods by declaring the same as Mixed Fatty Acid. In respect of valuation we find that the Revenue has enhanced the value on the basis of imports made as mentioned in Annexure 3 & 4 of the Show Cause Notice. In these annexure the Palm Fatty Acid, is imported at the lower price than declared by the importer. For example in annexure 3 the Palm Fatty Acid is imported at the price of US $ 170 per M.T. and in annexure 4 the goods were imported at US $ 200 per M.T. as stated above. As per the Rule 5 of Customs Valuation Rules in such a situation the lowest value has to be taken for determination of the value of goods. In the present case the lowest value is less than the value declared by the Appellants. There is no evidence on record to show that the importer has paid any consideration over and above the value declared to the supplier of the goods. Therefore in these circumstances we find merit in the contention of appellant. The impugned order is set aside and appeals are allowed

Decision:- Appeal Allowed.

Comments

PJ/Case Laws/2011-12/1509

Post a Comment

Query