The Department must provide evidence of contemporaneous imports at higher prices to support under-valuation allegations, and the invoice price is deemed the transaction value unless proven incorrect.

JUDGMENT:

KAPADIA, J.

The dispute involved in this civil appeal is as regards the assessable value of the Ceramic Capacitors and Diodes imported by the importer from M/s Pearl Industrial Company of Hong Kong during the period February, 1996 to July, 1996. The importer had declared the price of Ceramic Capacitors @ Hong Kong $ 6 per 1000 pcs. and the CIF price of the consignment of diodes was declared as Hong Kong $ 29406.

2. The facts giving rise to this civil appeal are as follows. The respondent had imported six consignments of ceramic capacitors and one consignment of diodes from Hong Kong during the above period. The goods were shipped from Hong Kong by M/s Compo Export of Hong Kong and M/s Pearl Industrial Company of Hong Kong. The price of ceramic capacitors was declared by the respondent in its Bill of Entry @ HK$ 6.00 per 1000 pcs. whereas the price of diodes was declared @ HK $ 29406 CIF as reflected in the invoices. On 27.4.1998 a show cause notice was issued by the Assistant Commissioner of Customs, Calcutta alleging inter alia that as per the overseas investigation report of the Hong Kong Customs and Excise Department the declared price did not represent the transaction value under Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 ("Customs Valuation Rules") as the price actually paid appeared to be different than the declared price and that the importer had under-invoiced the value of the goods to evade huge amount of the Governments revenue. At this stage, it may be pointed out that in the show cause notice the Assistant Commissioner had specifically invoked Rule 8 of the Customs Valuation Rules, 1988, which was subsequently given up by the Department. Be that as it may, the importer was asked to show cause as to why the value of the consignments in question should not be enhanced based on the export declaration under Rule 8 of the Customs Valuation Rules made by the Foreign Supplier. Accordingly, vide the aforestated show cause notice, the Assistant Commissioner raised a demand for the differential duty of Rs. 28,04,831.40 and fine in lieu of confiscation. In reply, the importer denied the above allegations. In reply, it was submitted that the show cause notice was based solely upon the purported investigation report of Hong Kong Customs and Excise duty; that the said report was accompanied by xerox copies of the export declarations; that the xerox copies did not bear the seal or signature of the customs officials in Hong Kong; that the authenticity of the declaration was doubtful; that the declarations were not the correct reproduction of the original and that there were endorsements to the effect that the documents shall not be used against any third party or in any legal proceedings. In other words, the importer contended that the charge of under-valuation cannot be based on xerox copies of the declarations which were not even certified by the competent authority in Hong Kong. According to the importer, such declarations had no bearing upon the actual sale price of the goods in the hands of Hong Kong exporters. According to the importer, there was no allegation in the show cause notice that it had paid higher value to the supplier than that declared by it in the Bill of Entry. Before the Assistant Commissioner, the importer supported the declared price mentioned in the Bill of Entry by relying upon various contemporaneous imports made during the above period by other importers whereas the price declared for identical goods was the same as the price declared by the importer in the present case in its Bill of Entry. It was further submitted by the importer that it was not open for the Assistant Commissioner to adjudicate the value under Rule 8 without going sequentially from Rule 5 to Rule 6 and Rule 6 to Rule 7 onwards. The importer further contended that, in the present case, the value of the goods could have been determined in terms of Rule 5 and, therefore, there was no que