Import under
Phased Manufacturing Programme/Policy — Whether assessee imported the goods in
CKD condition under the guise of component parts and confiscation thereof
sustainable ? Valuation (Customs) — Undervaluation — Proforma Invoice and (2) Fax Message sent by foreign supplier to assessee —
Whether acceptable as basis for enhancing the value
The
Supreme Court Bench comprising Hon’ble Mr. Justice Syed Shah Mohammed Quadri
and Hon’ble Mr. Justice S.N. Phukan on 15-1-2001 after condoning the delay admitted the Civil Appeal No. D18823 of
2000 filed by Auto Control (P) Ltd.
against the CEGAT Order No. 1575/98-A, dated 12-3-1999
and reported in [1999 (111) E.L.T. 96 (Tribunal)] [Auto Control (P) Ltd. v. Collector]. While admitting the appeal
the Supreme Court passed the following order :-
“Delay
of 9 days is condoned.
Appeal
is admitted.
There
shall be no stay of the order impugned herein.”
The
Appellate Tribunal in its impugned order in a matter challenging the
confiscation of goods imported by the Appellants under Phased Manufacturing
Programme Policy (PMP) relying on Supreme Court decision in the case of Sharp Business Machines Pvt. Ltd. [1990
(49) E.L.T. 640 (S.C.)],
had held that since complete typewriters were imported in knocked-down
condition, thus PMP was not at all followed by the Appellants, hence there is a
violation of the restrictions imposed under the PMP and EXIM Policy.
Accordingly the Tribunal held that the confiscation of the impugned goods is
sustainable in law.
The
Appellate Tribunal on the aspect of under-valuation had held that special
relationship existed between foreign supplier and Indian importer as was
evident from the statement of the responsible person of the Appellant Company.
The Proforma invoice and Fax message, which were more relevant as documents for
indicating the correct price of the matter, being in the form of overall amount
for which letter of credit was required to be opened, were acceptable as basis
for enhancing the value. Thus the under-valuation of the goods renders the
goods liable to confiscation under Section 111(a) read with Section 111(m) of
the Customs Act, 1962.
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