ORDER
T.K. Jayaraman, Member (T)
1. The appellant Shri Jai Singh Jhaveri returned to India for permanent settlement after continuously residing abroad since 1994. He imported one FERARI 360 Spider Model 2002 car at Cochin port filing Bill of Entry No. 116259 dated 8-7-2002. He declared the value of car as US $ 70,000 for the purpose of assessment as that was the amount paid by him to the Singapore dealer M/s. Hong Seh Motors Pte Ltd. As the customs doubted the value, the vehicle was not released pending investigation. However the appellant approached the Kerala High Court by filing a writ petition and the Hon’ble High Court ordered that the Department should complete the adjudication within a week. Accordingly the Assistant Commissioner of Cochin in his assessment Order No. 47/02 dated 12-8-2002, on the basis of Parker’s guide enhanced the value of vehicle from US $ 70,000 to UK Stg PDS 80,07,659 after deduction of 15% discount and Vat of 16%. The appellants paid the duty on the enhanced value and the car was released as per the court’s order. In the meantime, the department conducted investigation which revealed that the manufacturer’s price for the car is US $ 1,07,395. This is the price at which the manufacturer sold the car to M/s. Hong Seh Motors Pte Ltd., who in turn sold the same to the appellants. Under these circumstance, the department filed an appeal to the Commissioner of Customs (Appeals), Cochin to decide the confiscability of the car and imposition of penalty on the appellant in View of the evidences unearthed. The Commissioner (Appeals), in his Order-in-appeal dated 28-11-03 upheld the department’s contention on valuation but did not decide the confiscability and penalty as the Order-in-Original of the Assistant Commissioner did not deal with the same. The Order-in-Appeal is challenged by the appellant before this Tribunal.
2. In view of the evidence of misdeclaration, the appellant’s car which was parked in garage basement parking No. 29 of Amarnath Amberi West was seized by the Officers of Customs on 31-10-03 on the ground that the same is liable for confiscation under the Customs Act. The Commissioner of Customs, Cochin issued a show cause notice dated 7-1-04 proposing confiscation of the imported car under Section 111(d) and 111(m) of the Customs Act and imposition of penalty under Section 112 of the Act. The learned Commissioner passed an Order No. 9/04 dated 27-2-04, ordering confiscation of the car released the same on redemption fine of Rs. 7.5 lakhs and penalty of Rs. 2.5 lakhs. This order of the Commissioner is also under challenge by the appellant. We are deciding the appeals against the order of the Commissioner of Customs (Appeals) as well as Order of the Commissioner of Customs, Cochin. In this Order three issues have to be decided.
(1) The valuation of the car
(2) Confiscability of the car
(3) Imposition of fine and penalty.
3. As regards the value of the imported car, normally under the Customs Law the transaction value with adjustment in accordance with provisions of Rule 9 of the Customs Valuation Rules, 1988 is to be accepted for assessment purposes. There are certain situations where the transaction value will not be accepted by the Customs as per Rule 4(2) of the Customs Valuation Rules, 1988. As per Rule 4(2)(a), the transaction value of imported goods shall be accepted provided that the same does not involve any abnormal discount or reduction from the ordinary competitive prices. In the instant case, the transaction value is US $ 70,000, however the investigation revealed that the manufacturers sold the same car to the Singapore dealer for a price of US $ 1,07,395. This fact is not disputed by the appellant. There is ample evidence for the same as the department has got the information by writing to the Original manufacturer who has confirmed the price and also received the actual amount from the Singapore dealer. When compared to the real price of US $ 1,07,395, the transaction value of US $ 70,000 no doubt is abnormally reduced from the ordinary competitive price, as a result, the Customs Department is not bound to accept the transaction value in view of Rule 4. The appellant relies on the decision in the case of Commissioner of Customs Mumbai v. Metalman Pine Mfg Co. Ltd., [1997 (91) E.L.T. 382 (Tri)]. In the above case, even though as per original contract the higher price for the goods have been agreed upon, in view of the breach of contract, negotiations were conducted and the import was made at a lower price. The Commissioner dropped the proceedings against the importer accepting the negotiated price which was less than the original price. Revenue appealed against the Commissioner’s order. But the Commissioner’s Order was upheld by the Tribunal. The Tribunal’s order was also upheld by the Supreme Court [2002 (141) E.L.T. A191 (S.C.)]. At that time, the valuation provisions of Rule 4(2) (a) which we have quoted above did not exist. Therefore, the case law cited by the learned advocate will not be applicable in this case. Under these circumstances, we uphold the Order-in-Appeal as regards the value of the car.
4. Shri P.M. Saleem, the learned SDR contended that this is clear case of misdeclaration as no one will sell custom made car for US$ 70,000 when the real price is US$ 1,07,395/-. Hence, according to him, the confiscation of the car and penalty/fine are to be upheld. The department has written to the Singapore dealer regarding the amount received by him from the appellant for the car and he had confirmed receipt of payment of US $ 70,000. So the fact remains that the transaction value is only US $ 70,000 and the department has not unearthed any evidence to show that the importer had paid the difference between the transaction value and the real value through any other means. In the absence of evidence, the benefit of doubt goes to the appellant. The charges of mis-declaration cannot be sustained. Hence the car cannot be confiscated. The Order of the Commissioner of Customs, Cochin has no merits. The same is liable to be set aside. In view of the above discussions, we uphold the OIA dated 28-11-03 and dismiss the OIO with consequential relief if any to the appellants.