Judgment:
1. The Additional Collector of Customs, Calcutta passed the impugned order determining the CIF value of the imported goods to be Rs. 4,12,344.12 and confiscating the goods under clauses (d) and (m) of Section 111 of the Customs Act, 1962 (for short, the Act), giving option to redeem on payment of fine of Rs. 4,22,000.00 and imposing penalty of Rs. 50,000.00 under Section 112 of the Act. This order is now challenged.
2. It is now admitted that what the appellant imported from West Germany was a consignment of 1491 kgs. (gross) of rejected or defective textiles in running length. The invoice described the goods as rejected textile (defective). It mentions the weight as gross 1348 kgs. and net 1272 kgs. Under the heading metrage also 1272.00 was mentioned. The price was shown as DM 1 per unit. The GIF value was given as DM 3415.56. Obviously, the metrage given as 1272 was the nett declared weight of the consignment. Copy of the Bill of Entry is not before us, but it is admitted that the Bill of Entry declared the goods to be neck ties of Indian origin being reimported as defective. if the goods were of Indian origin and were being reimported, no customs duty would be payable. The appellant also produced a Shipping Bill in support of the claim that the goods were of Indian origin and being reimported.
Examination showed that the goods were not neck ties but were textiles in running length and were made in West Germany. Thereupon, the clearing agent of the appellant resubmitted the Bill of Entry stating that the goods were rejected textiles of West Germany and not neck ties of Indian origin and also waived show cause notice. The reimport of Indian origin goods did not require a licence but import of neck ties or textiles of Indian origin required a licence. Appellant did not produce any licence. The declared weight of 1348 kgs. was wrong and the correct weight was 1491 kgs. Weighment of representative sample showed that a roll with nett weight of 1.2 kg. had a length of 16 meters. Thus the entire consignment contained 18988 meters of textile. Test report showed that the goods were silk fabrics composed of spun silk yarn 61.6% by weight and balance being filature silk yarn falling under Appendix 3A. Import of such material required licence. Show cause notice was issued proposing enhancement of value, confiscation and imposition of penalty.
3. In the reply to the notice it was admitted that the consignment consisted of textiles in running length of West Germany origin requiring licence. The appellant admitted that the clearing agent was in error in showing the goods as neck ties in the Bill of Entry.
Appellant reiterated the value was DM 1 per kg. and not per meter.
4. The Additional Collector overruled the contentions of the appellant and passed the impugned order.
5. The appellant, from the very beginning, was trying to devise ways and means of evading payment of customs duty. It was found that the Shipping Bill did not relate to this consignment, and it could not relate to the consignment of textiles in running length. It is evident that the appellant was hoping that the consignment will not be examined or that the Custom House will overlook the description of the goods in the invoice as textiles. There was misdeclaration of weight also in the import documents. The appellant did not produce the correspondence with the supplier. In the circumstances, it is clear that there was an attempt to manipulate Bill of Entry, invoice and other import documents. In these circumstances, the Additional Collector was justified in rejecting the invoice value or transaction value and finding the appellant guilty of misdeclaration of description, value and violating the provisions of the Import and Export Control Act, 1947.
6. The question of correct assessable value remains for consideration.
As already mentioned, the invoice mentions nett weight as 1272 kgs. and mentions the same figure under heading "metrage". The price is mentioned as DM 1 per unit, without mentioning whether the unit is kg.
or meter. The particular kind of textiles weighing 1272 kgs. would have a running length of over 18,000 meters. Therefore, the unit price mentioned could not be per meter and could be only per kg. What the Additional Collector did was to take the CIF value shown in the invoice, namely, DM 3415.56 and divides the same by 1272, arrive at the figure DM 2.685 per meter as CIF price. This was certainly erroneous.
If the Additional Collector desired to accept the CIF value, he should have divided it by 1272 and that was what he did. The figures arrived at by the Additional Collector could not be the CIF price per meter. It could only be CIF price per kg. The Additional Collector was definitely, and justifiably so, not prepared to accept DM 2.685 as CIF price per kg. In these circumstances, it was his duty to find out if there were contemporary imports and if so, the value thereof and if there were no other contemporary imports, proceed to determine the value under the appropriate rule of the Customs Valuation Rules, 1988.
This procedure was inevitable in view of the infirmities surrounding the invoice and other import documents as already pointed out.
7. For the reasons indicated above, we set aside the impugned order and remand the case to the Additional Commissioner of Customs for decision afresh on the question of correct assessable value, confiscation and imposition of penalty. We make it clear that this order concludes violation of Import and Export Act, 1947 and the rejection of the invoice price. Since the goods have not yet been cleared, the Additional Commissioner will try to pass the fresh adjudication order as expeditiously as possible, and at any rate, within four months from the date of receipt of copy of this order. The appeal is accordingly allowed.