The court applied the conditions for exercise of jurisdiction under Section 130E(b) of the Customs Act and declined to interfere with the order passed by the learned Tribunal.

ORDER :

The appeal under Section 130E(b) of the Customs Act, 1962 seeks to assail an order dated 10.01.2006 passed by the learned Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'the learned Tribunal') by which the orders of the primary and the First Appellate Authority holding the respondent-assessee liable for differential duty to the extent of Rs. 4,79,11,879/- has been reversed.

2. Considering the extremely limited scope of an appeal to be heard and considered by this Court under the provisions of 130E(b) of the Customs Act, it will be hardly necessary to embark upon a detailed enumeration of the voluminous facts, figures and materials that have been considered by the authorities at different levels at different points of time. Suffice, it will be to say that orders of the primary and the First Appellate Authority holding the issue against the assessee is primarily founded on the ground that there was a mis-declaration by the assessee with regard to the grade of items imported by the assessee. According to the Revenue, the goods were to be graded only as Grade "A" and "AA" whereas the assessee had graded the goods under the grades A, B and C. As the grading itself found to be inaccurate the transaction value on the basis of such grading was held to be unacceptable. Hence reliance was placed on a standing order dated 04.02.2000 wherein the acceptable value of the like goods are mentioned. The prices mentioned therein were further found to be substantiated by the contemporaneous documents produced by the Revenue in the course of the adjudication.

3. In appeal, the learned Tribunal found that the following documents produced by the assessee were not disputed by the Revenue.

i. Contract between the manufacturer and the supplier.

ii. Contract between the supplier and the appellants.

iii Invoice raised by the manufacturer on the supplier

iv. Letter dated 22.12.2000 of the Board of Foreign Trade, Ministry of Economic Affairs, Taiwan, confirming that grades B, C and D also exist.

v. Detailed note/letter of the manufacturer setting out the parameters of grading adopted by the manufacturers of the yarn in question.

4. Insofar as grading is concerned, apart from the letter dated 22.12.2000 of the Board of Foreign Trade, Ministry of Economic Affairs, Taiwan confirming that grades B, C and D also exist, what was available on record is an intra-departmental communication dated 12.04.1999 which is to the following effect :

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"The criteria for grading of yarns for quality in terms of first grade, 'B' or 'C' grade and Dyeing quality are also decided by visual inspection of the entire lot for freedom from various defects and other parameters and therefore cannot be decided only on the basis of a test report."

5. The above materials, according to the learned Tribunal, were sufficient to reverse the finding of the primary and the First Appellate Authority on the point of grading.

6. Coming to the second issue, namely, transaction value, the learned Tribunal took into account that a total of 16 bills of entry were relied upon by the Revenue claiming the same to be evidence of contemporaneous value of the imported yarns i.e. Partially Oriented Yarn of Polyester (POY), Polyster Textured Yarn (PTY) and Polyester Filament (PFY). None of the aforesaid bills of entry were relatable to PTY, whereas eight bills of entry were relatable to POY and PFY each.

7. The finding of the learned Tribunal is that almost half of number of the said bills of entry relating to each item of Yarn i.e. POY and PFY did not pertain to the yarns imported by the assessee and, in case of the rest, there was a variance in the price mentioned in the aforesaid bills of entry and those in the standing order; yet the prices mentioned in the said standing order were adopted to determine the transaction value.

8. It is on the basis of the aforesaid consideration that the learned Tribunal thought it proper to take the view that the claim of the Revenue o