Judgment:
* IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on:
28. 01.2014 + W.P.(C) 372/2014, C.M. APPL. 743/2014 & 744/2014 M/S. KIRAT INTERNATIONAL THROUGH ITS PROPRIETOR SHRI HARMEET SINGH LUTHRA …..Petitioner Through: Appearance not given. Versus UNION OF INDIA AND ORS. ……..Respondents Through: Sh. B.V. Niren, CGSC, for Resp. Nos. 1 and 2 (UOI). Sh. Rahul Kaushik, Advocate, for Resp. No.3. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.V. EASWAR MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. Issue notice. Sh. B.V. Niren, CGSC accepts notice on behalf of Respondent Nos. 1 and 2 and Sh. Rahul Kaushik, Advocate accepts notice on behalf of Respondent No.3.
2. The petitioner imported fitness equipment from three different places, i.e. China, Korea and the United States of America (US). Upon being issued with Show Cause Notices alleging under-invoicing under various provisions of law, the petitioner approached the Customs and Central Excise Settlement Commission (hereafter referred to as “the Commission”) with an application under Section 127B of the Customs Act. The Commission took-up the matter for consideration and W.P.(C) 372/2014 Page 1 subsequently heard all the parties fully. By the order dated 31.10.2013, the Commission held that the proposal of the respondent – Customs authorities and the Directorate of Revenue Intelligence (DRI) that freight and insurance should be worked out at 20% and 0.125% of the declared FOB value but the actual cost of freight and insurance known to the parties should be taken into account. The relevant directions of the Commission in this regard is as follows:
“19. The Bench has carefully considered the arguments put forth by the applicant. On verifying the actual bills of entry, it can be seen that the freight and insurance has been shown separately in addition to the f.o.b. value. These should not therefore be calculated at the rate of 20% and 0.125% respectively for freight and insurance but only the actual cost of freight and insurance which is known should be added to the invoice value to determine the assessable value. On the basis of this, the differential duty leviable is reduced by Rs.81,39,326/-“ 3. The petitioner had argued that in respect of imports from the US from M/s. Cybex International Inc. similar approach needs to be adopted. However, the Commission did not deal with this aspect at all and impliedly rejected it. The relevant discussion in this regard is as follows:
“22. With regard to imports from USA from M/s. Cybex International, the bench observes that the basis of the demand has been shown at Para 18 of the SCN and is based on the statement of Shri Harmit Singh Luthra whereby he has himself given actual ‘negotiated’ value as distinct from the declared amount. The applicant has on the other hand submitted a detailed consignment wise chart indicating the value declared before Customs as well as the actual negotiated value in respect of each of these W.P.(C) 372/2014 Page 2 consignments. This chart includes the consignments imported from M/s. Cybex International, USA and shows a gap between the two values in respect of the import also. The Revenue has relied on this information provided by the applicant to demand duty. The argument made on behalf of the applicant during hearing is not accepted. Similarly, the Bench is unable to undertake a determination of whether the overseas enquiry report relied upon by DRI to enhance the duty demand in respect of 5 consignments imported from Taiwan and 2 imported from Hong Kong as detailed in the addendum to SCN relate to the imports in question. This issue appears not to have been raised with DRI even though the addendum in question was issued on 05.03.2012. This submission is accordingly not accepted. The other averments by the applicant through this Advocate are also not acceptable.”
4. The final order, therefore, was that in respect of the consignments from China and Korea, freight and insurance were to be calculated on actual basis whereas in respect of consignments in question from the US, the value was to be assessed at what had been proposed by the Department. This, argues the petitioner, not only betrays non-application of mind but is a blatantly erroneous approach.
5. The respondents’ argument is that being findings of fact, this Court should not interfere with the order of the Commission. The respondents rely upon the decision of the Supreme Court reported as Union of India and Ors. v. Ind-Swift Laboratories Limited 2011 (4) SCC635as well as Sanghvi Reconditioners Pvt. Ltd. v. Union of India (UOI) and Ors. 2010 (2) SCC733 It is highlighted that the party aggrieved cannot dissect the order of the Commission accepting one part and rejecting the other. W.P.(C) 372/2014 Page 3 6. This Court has carefully considered the materials on record. The facts of the present case manifestly reveal that the Commission did not consider the submissions of the parties at all while dealing with the import from the US, in calculating the freight and insurance component. Para 19 of the impugned order shows that the Commission accepted the petitioner’s argument on this score. However, what are the reasons that impelled the Commission to reject the petitioner’s submissions in para 22 are not known. This opinion betrays an ex-facie error. This does not amount to the petitioner ventilating the grievance by which it is seeking to dissect the findings of fact choosing to retain what is in its favour and rejecting what is not. Simply put, the Commission’s order is silent on the aspect with what the petitioner is aggrieved. Another way of looking into the matter: the consignments which are in respect of identical goods though from different sources, while there could arguably be justifiable reasons to take a differential approach, in the absence of any spelt-out or considered reasons discernable to the Court or reader, such differential treatment would amount to discrimination – plainly clothing this Court with jurisdiction on this score. For the above reasons, this Court is of the opinion that the matter requires to be reconsidered by the Commission only on the aspect as to the consignments from M/s. Cybex International Inc. vis-a-vis the freight and insurance to be paid by the writ petitioner. The matter is accordingly remitted to the Commission limited on this aspect. The Commission shall indicate its position after giving notice to the parties and granting such hearing as is warranted in law. The writ petition and W.P.(C) 372/2014 Page 4 pending applications are allowed in the above terms. S. RAVINDRA BHAT (JUDGE) R.V. EASWAR (JUDGE) JANUARY28 2014 W.P.(C) 372/2014 Page 5