Hazari Trading Co. Vs. Commissioner of Customs Mumbai - Court Judgment

Ashok Jindal:

In this appeal the appellant has challenged the loading of value on the imported goods made by the adjudicating authority on the basis of contemporaneous imports made at Chennai Port.

2. The facts of the case are that the appellant imported certain electronic goods i.e., MCCB and DHL. On examination of the goods, it was found on the packing box of the impugned goods that the country of origin was mentioned as Japan instead of China as mentioned in the Bill of Entry. Therefore, suspicion arose and further examination was carried out. Out of the 8 items imported, 4 items were found to be undervalued on the basis of contemporaneous import made at Chennai Port of similar goods. Therefore, a case was made out against the appellant and value was loaded, goods were confiscated and allowed to be redeemed on payment of redemption fine and penalty. The order was challenged before the Commissioner (Appeals) who confirmed the adjudication order. Therefore, the appellant are before us.

3. Shri S.N. Kantawala, learned counsel for the appellant appeared before us and submitted that the goods are of China origin. It is the mistake of the supplier that they did not delete the marking on the boxes as the goods were meant for supply to Japan for some other customers. In support of this contention, he placed on record two certificates issued by their foreign supplier to that extent confirming that the goods are meant for Japanese customers and as their Japanese customer did not accept the goods, the same goods were sent to the appellant. Therefore, the allegation that country of origin is wrong has been explained by the appellant. With regard to valuation, he submitted that, in their own case, as the appellant are being an importer of similar goods, they produced the Bills of Entries under which goods were cleared at JNPT Port but the adjudicating authority as well as the first appellate authority has not given any consideration to them. Therefore, the value loaded by the adjudicating authority is to be set aside.

4. On the other hand, Shri D.D. Joshi, learned AR supported the impugned order and submitted that the appellant has failed to discharge their onus that the country of origin is China. Further, the adjudicating authority has rightly relied on the contemporaneous imports made at Chennai Port of the similar goods. Therefore, the impugned order has to be upheld.

5. Heard both the sides and considered their submission.

6. We find that there are two issues involved in the matter: (a) What is the country of origin; and (b) issue of undervaluation.

6(a) Country of Origin: We have seen the records and the appellant has produced a letter issued by their supplier dated 20/11/2002 which clearly implicate that the impugned goods are manufactured by the supplier of the goods who are the actual manufacturers and the impugned goods are meant for supply to Mitsubishi, Japan and as Mitsubishi, Japan refused to take delivery of the goods, therefore, these goods were exported to the appellant. Further, clarification was also given by the supplier/manufacturer of the goods on 02/12/2002 and it is contended that the country of origin shown on the box as Japan is their mistake and for that they apologise for the same. The Revenue has not controverted these two letters in the adjudication order nor they have denied the genuiness nor held that these documents are false. Therefore, the appellant has discharged their onus of proving that the country of origin is China.

6(b) Undervaluation: On the issue of undervaluation the adjudicating authority has relied on the contemporaneous import made at Chennai Port of similar goods. It is the contention of the appellant that the goods imported at Chennai Port are not similar goods which they have submitted in their reply to show cause notice saying that the goods imported by them are of the quality of NF-CS whereas the imports made at Chennai Port are of NF-SS. Therefore, the goods are not comparable or similar goods. Further, the appellant has also relied on the contemporaneous import made by them both of similar goods during similar period, and of similar quantity. However, the adjudicating authority has not given any consideration to the same on the premise that the goods were imported by the appellant themselves, therefore, they cannot be relied upon. No case has been booked against the appellant against those imports made at JNPT Port and therefore, the value of the imports made at JNPT Port are to be considered as contemporaneous imports. As the goods are not valued as per the imports made by the appellant at JNPT Port and relied on the contemporaneous imports made at Chennai Port, which are observed as non-comparable or not similar goods, therefore, loading the value on the basis of contemporaneous imports at Chennai Port are not sustainable. Accordingly, we set aside the loading of the value in the impugned order.

7. In view of these observations, we set aside the impugned order and allow the appeal with consequential relief.