M.R. Tractor & Trolley vs CC, Jodhpur

After hearing both the sides, we find that the appellants imported a consignment of old and used tyres with a declared value of Rs.5,72,765/-.

Inasmuch as the importation of used and old tyres is restricted and requires a licence in terms of the Foreign Trade Policy, the consignment was not

cleared by the Customs, as the appellant could not produce the licence. The issue as regards the valuation of the consignment was also taken up and a

belief was entertained that the value declared by the appellant is on the lower side. It was also found that as against the declared quantity of 2637

pieces of tyres, the actual number was found to be 2661 pieces.

For all the above reasons, proceedings were initiated against the appellant proposing enhancement of the value, based upon some contemporaneous

imports, confiscation of the goods on the charges of the mis-declararation in quantity, undervaluation and non-production of the licence.

The said proceedings resulted in passing of an order passed by the original adjudicating authority establishing the charge of mis-declararation in

quantity as also non-production of the licence. The Adjudicating Authority also enhanced value to Rs.15,87,652/-. He further confiscated the goods

with an option to the assessee to redeem the same on payment of redemption fine of Rs.3 Lakhs and imposed penalty of Rs.50,000/-.

On appeal against the above order, the Commissioner (Appeals) upheld the violation of the provisions of the Foreign Trade Policy. However, as

regards valuation, he agreed with the appellant that details of the contemporary imports are not available in the impugned order. However, he rejected

the assessee’s stand that the transaction value should be accepted by observing that the appellant have not been able to produce any evidence to

substantiate the transaction value. He, accordingly, rejected the assesse’s submissions on enhancement of the value. However, he reduced the

redemption fine to Rs.1.75 lakhs and upheld the penalty to Rs.50,000/-.

Hence, the present appeal.

Ld. Advocate appearing for the appellant has not disputed the fact that the goods were imported without a proper import licence issued by the

authorities in terms of the Foreign Trade Policy. As regards quantity variation, he submits that the same is negligible being to the tune of 24 pieces. As

regards valuation, he submits that the Revenue has not been able to produce any evidence to first reject the transaction value. He accordingly prays

for setting aside the enhancement and reducing redemption fine and penalty on account of violation of Foreign Trade Policy.

Ld. DR appearing for the Revenue reiterates the reasonings of the Authorities below.

We agree with the ld. Advocate that 24 excess pieces of tyres cannot be held to be a malafide mis-declaration in the quantum of tyres when the

total number was more than 2500 pieces. As regards valuation, we find that the appellant having declared the transaction value, it was for the

Revenue to rebut the same by production of evidence. The Appellate Authority has already observed that there is virtually no contemporenous imports

as no details are given. Otherwise also, we find that two different imports of ‘old’ and ‘used’ items can never be identical inasmuch as

the value of the same would depend upon the number of factors including the usage years as also the condition of the goods. The Appellate Authority

has rejected the transaction value by observing that the appellant has not produced any evidence to substantiate the same. We find no merits in the

above reasonings of the Commissioner (Appeals). The appellant having produced the invoice, in support of its declared value, has done his part of the

duty. If the Revenue is not happy with the said declared transaction value, it is they who have to produce the evidence. There being none in the

present case, we find no reasons to enhance the assessable value.

However, as the appellant have admitted violation of Foreign Trade Policy, the goods are confiscable and penalty is imposable. Keeping in view that

we have set aside the findings of the under-valuation, we reduce the redemption fine to Rs.75,000/- and penalty to Rs.25,000/-. The impugned order is

modified accordingly and the appeal is disposed of in the above terms.