Legal principle

Once the nature of goods has been mis-declared, the value declared on the imported goods becomes unacceptable, though the burden of establishing the mis-declaration remains on the Customs authorities, who must then determine value sequentially under Rules 5 to 8 of the 1988 Rules.

Court decision

The Supreme Court allowed the revenue's appeal, held the Tribunal's finding perverse and unsustainable, and remitted the entire matter to the Tribunal for fresh consideration in accordance with law — particularly the manner of valuation, redemption fine and penalty — after affording both parties a proper hearing, with no order as to costs.

Facts

M/s IPC O Enterprise, a Thane proprietorship of respondent Abdulla Koyloth, imported assorted consumer goods — glassware, hair dryers, gas-filled cylinders and refrigerant-22 (R-22) gas — declaring an assessable value of Rs. 6,75,796.90 in a bill of entry filed on 3 May 2002. Examination by the Central Intelligence Unit revealed mis-declaration of country of origin, quantity and value, and as the R-22 cylinders required an actual user licence, the goods were seized on 4 July 2002. In statements under Section 108 the importer admitted differences between the items declared and those seized and accepted the market-survey prices. By order dated 21 April 2003 the Commissioner rejected the declared value, fixed the assessable value at Rs. 23,69,838 with duty of Rs. 13,17,091, ordered confiscation under Sections 111(d) and (m) (R-22 cylinders absolutely) with a redemption fine of Rs. 30,11,525, and imposed a Rs. 10 lakh penalty under Section 112(a). The Tribunal allowed the importer's appeal on valuation and glassware confiscation and deleted the penalty, prompting the revenue's appeal under Section 130E(b).

Key provisions

• Section 130E(b), Customs Act, 1962 — Appeal to Supreme Court