H.R. Electronics Vs Commissioner of Customs (CESTAT Delhi)
The appeal before the Tribunal concerned the order dated 29 October 2007 passed by the Commissioner of Customs (Import & General), New Delhi, confirming a demand of ₹21.09 lakh under the proviso to Section 28(1) of the Customs Act, 1962, along with interest and an equivalent penalty under Section 114A, relating to imports made by the appellant between February 2003 and September 2004. The appellant had imported 12 consignments of components of Digital Receiver Sets of Chinese origin for assembling Direct-to-Home (DTH) units. Based on intelligence that the goods had been undervalued, the Directorate of Revenue Intelligence (DRI) investigated the matter and issued a show cause notice dated 9 February 2007. The Commissioner confirmed the proposals in the notice, rejecting the appellant’s declared values based on contemporaneous imports by three other importers—MCBS, Ahmedabad; Electronic Enterprises, Delhi; and Catvision Products Ltd.—who had imported similar goods at substantially higher prices of USD 10–12 per piece compared to the appellant’s declared CIF values of HK$ 35 (USD 4.5) and HK$ 25 (USD 3.2).
The appellant argued that the values declared represented genuine transaction values, with prices varying depending on brand and make. It contended that the Commissioner relied solely on values of other importers without permitting cross-examination. The appellant further submitted that the declared values had already been enhanced by the proper officer at the time of assessment, and therefore a second enhancement on the same goods was unsustainable, citing several judicial decisions. It was also argued that the assessment of a Bill of Entry constitutes an appealable adjudication order, and without first challenging the original assessments, the department could not raise a subsequent demand. The appellant maintained that if contemporaneous imports were to be considered, the lowest among them, as required under Rule 4(3) of the Valuation Rules, should have been adopted, and that the goods relied upon for comparison were not identical to those actually imported.
