Under-valuation to avoid payment of higher Customs duty
CHENNAI: Customs authorities have impounded two motorcycle engines, which were wrongly declared as spare parts with the price and capacity undervalued.
Commissioner of Customs (Airport) C. Rajan said a businessman imported two motorcycle engines from Dubai and declared them as Honda motorbike 600 cc engine with chassis and Suzuki motorbike 600 cc engine with chassis. The importer quoted the value of the Honda engine as Rs.57,240 and that of Suzuki Rs. 62,627. However, investigation by the Cargo Intelligence Unit revealed the actual capacity of the Honda engine was 998 cc and that of Suzuki engine 1,299 cc. The real value of the Honda engine with chassis was Rs 4.63 lakh and that of the Suzuki engine with chassis was more than Rs 5.50 lakh.
Mr. Rajan said some importers resorted to mis-declaration and under-valuation to avoid payment of higher rate of Customs duty.
For a completely built motorbike and a motorbike in a semi-knocked down condition, the importer had to pay duty to the tune of 95.34 per cent. If a motorbike was imported in a completely knocked-down condition, the duty was only 36.736 per cent.
As the duty was higher for a complete bike unit in a semi-knocked-down condition, importers declared the item as being in completely-knocked-down-condition to evade duty, Mr. Rajan said.
The importers also furnished fictitious addresses and got import/export code from the Joint Director of Foreign Trade, thereby resorting to mis-declaration of engine capacity and its value. Mr. Rajan said a few others imported chassis and all other parts through one port and the engine through some other port. Thereafter the parts were assembled.
This again was to evade payment of higher duty. In the past six months, seven such cases had been detected, and the total differential duty in these cases worked out to Rs. 15 lakh, officials said.
The Customs would talk to the Directorate of Revenue Intelligence to take up the issue with the Indian Embassy in Dubai, Mr. Rajan said.