P.K. Kapoor, Member (T)

1. This is an appeal against order dated 20-3-1991 passed by the Additional Collector of Customs, Kandla. Briefly stated the facts of the case are that the appellants filed Bill of Entry No. 2625 dated 15-5-1990 for the clearance of a consignment weighing 18.480 MTs. declared to contain "Plastic Rolls (PVC Flocked Sheet in Rolls)". Along with the Bill of Entry the appellants filed an invoice issued by M/s. Polymers International Texas, USA showing the net weight of the goods as 18.480.00 Kgs. and the unit price as US $950 /M.T. The goods were declared to be of Taiwanese origin and as per Bill of Lading No. KND-4 they were shipped from the port of Keelung in Taiwan. For the clearance of the goods the appellants filed 5 REP Import Licences, all issued in the name of M/s. Hindustan Spinning and Weaving Mills. These licences were endorsed as per provisions of paras 175 and 176 of the Import and Export Policy for the period AM 1988-91. The appellants also produced a licence issued in favour of M/s. Al Hamid International permitting the import of goods as per para 215 of Import and Export Policy for the period AM 1988-91. The appellants were served with a show cause notice dated 27-9-1990 wherein it was alleged that the goods were not covered by Sr. No. 377 of Appendix 3; Part-A Import and Export Policy for AM 1988-91 for which the licences produced were valid. It was also alleged that the imported goods being 'consumer goods' were covered under Sr. No. 145 of Appendix 2, Part-B of Import and Export Policy for the period AM 1988-91. It was further alleged that goods weighing 1.160 MT had been imported in excess since on weighment the actual weight of the goods had been found to be 19.640 MT as against declared weight of 18.480 MT. It was stated that the duty attempted to be evaded due to the excess quantity was Rs. 81,796. On the basis of invoices relating to certain imports by other parties, it was also alleged that as against the declared value of US $750 PMT the value of the goods was US $1700 PMT; resulting in attempted evasion of duty amounting to Rs. 5,74,895/-. The appellants were furnished a copy of the test report which showed that the various varieties of imported goods contained mainly PVC ranging from 67.6% to 72.3% and the balance comprised of 'viscose flocks' and binding material.

2. In the impugned order dated 20-3-1991, the Additional Collector held that the imported goods were "consumer goods" covered by Sr. No. 145 of Appendix-2, Part B of AM-1988-91, Import Policy since they were sold in the market as car seat covers, sofa covers, table covers etc. The Additional Collector observed that they did not fall under OGL (Appendix-6 of the Policy). On these grounds he held that the import licences produced by the appellants were not valid and the goods were liable to confiscation under Section 111(d) of the Customs Act, 1962. On the question of valuation of the goods, the adjudicating authority held that the transaction value was not acceptable in terms of Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, on account of the invoice price being much lower than the price of US $ 1675 MT in respect of identical goods shown in some of the invoices relied upon by the department. On this ground and also the reason that the ascertained weight of the goods was in excess of the declared weight, it was held that the value of the goods had been misdeclared. The Additional Collector also rejected the appellants' claim that the goods were classifiable under Heading 39.26 of the Tariff and held that the goods having been imported in the form of sheets were classifiable under Tariff Heading 39.21. On these grounds the Additional Collector ordered that the determination of the assessable value of the goods on the basis of the unit price of US $ 1675 PMT. He also confiscated the goods under Sections 111(d) and (m) of the Customs Act, 1962. He, however, gave the appellants th