Full Judgment
2. Appellant imported five consignments of parts of Earth Moving Machinery of USA origin through a supplier in UK and filed Bills of Entry dated 20-2-1990 (2 Bills of Entry), 18-12-1989 (2 Bills of Entry) and 12-4-1989 and declared value as Rs. 2,36,572/-, Rs. 1,19,298/-, Rs. 60,849/-, Rs. 1,10,896/-and Rs. 21,278/- respectively. The goods were assessed accepting the declared values and were cleared on payment of duty assessed. In respect of seven other consignments, Bills of Entry dated 25-4-1990 (5 Bills of Entry) and 12-4-1990 (2 Bills of Entry) were filed declaring value as Rs. 16,655.00, Rs. 3,96,480.00, Rs. 4,69,863.00, Rs. 2,84,017.00, Rs. 2,39,874.00, Rs. 3,557.00 and Rs. 54,245.00 respectively. The goods were manufactured by Allison Transmission USA (for short AT) for Detroit Diesel Corporation USA (for short, DDC), both being divisions of General Motors, USA. All the consignments were purported to have been supplied by M/s. Heldean Ltd. UK (for short, HL) a proprietary concern belonging to Shri Praful Patel, who raised invoices. The relevant documents were collected from the Custom House Agent. The office premises of appellant was searched and several documents were seized. The documents included certain telex messages, list dated 11-4-1990 prepared by appellant showing details of "DDA" (i.e. Detroit Diesel Corporation and Allison Transmission) as on 10-3-1990, invoices for import of spares of AT by the appellant from M/s. American Corporation USA and M/s. Janis Exports, USA. Statements of Shri Satish K. Mehta, a partner of appellant and Shri Jagdish K.Mehta, who was managing the concern were recorded on several dates and statement of Pankaj V. Shah was also recorded. Enquiries were made with M/s. Prem Nath Diesels Pvt. Ltd., New Delhi (for short PND) sole authorised distributor in India of AT. Imports of spares of the AT and DDC by or through PND were examined by Special Valuation Branch. Copies of some invoices of the manufacturers and Bills of Entry were obtained from PND. Appellant submitted work sheet value of imports as per the distributors' prices in 1989 price list and 1990 price lists.
Clearances were claimed against various REP for Additional Licences (validity of 2 licences had expired prior to the date of bills of lading). Enquiries were made with the shipping company.
3. All the items covered by the Bills were claimed to be spares of Earth Moving Machinery (except Bushes, Hoses and Pumps for which licences valid for Appendix 3 items were given) and clearance was claimed against Addition al Licences as OGL items. It was found that items valued at Rs. 1,69,885/- will not be covered by the Additional Licences which were valid to cover only OGL items under Appendix 6.
Appellant had placed orders for supply of the goods on M/s. CMP Ltd., UK (for short CMP) and the latter had actually supplied the same, HL acting only as an intermediary and raising the invoices. HL had placed orders on CMP on receipt of orders from appellant. There was negotiation by telex messages between CMP and appellant. HL had claimed 5% commission from appellant (indicating that he was only an intermediary). CMP had sent quotations directly to appellant and later on made certain corrections in the quotations. CMP had forwarded to appellant price lists of DDA and AT and seeking orders.
The contracted prices of certain items were at par with distributor prices (prices to be charged by distributors to dealers) shown in the price list indicating that CMP's quotations to appellant were on the basis of the manufacturers' price lists. The prices declared in the Bills of Entry and HL's invoices to appellant were 40% to 45% lower than the distributors prices shown in the price list. CMP was consistently quoting on the basis of the distributors' prices in the price lists less 5%. Appellant sent orders directly to CMP or through HL, at distributors prices shown in 1989 price list less 5%.
Appellant also admitted to CMP that same prices had been quoted by other sources in USA. CMP had claimed in telex dated 3-12-1989 that prices quoted were special prices. The prices in 1990 price list were 5 to 121/2% higher than the 1989 price list prices. There was a quotation from M/s. Amwin Corporation, USA, authorised distributor in USA quoting price as list price less 28% for spares of AT (List prices are 40% higher than distributor prices and less 13 to 15% for spares of DDC). Appellant had specifically sought for price lists of AT and DDC showing the distributors' price to finalise the decision.
5. The list prepared by appellant on 11-4-1990 showed details of AT and DDC goods as on 11-4-1990 and contained columns for part number, quantity ordered and despatched, quantity balance and rate in US $. The rates indicated were at par with distributors' prices in the 1989 price list less 5%.
The invoices for AT and DDC goods ordered by appellant from M/s. Amwin Corporation, USA and M/s. Janis Exports, UK showed prices higher than the distributors' prices shown in the price list.
Copies of orders placed by HL on CMP were not available in the appellant's premises.
A telex message from HL to appellant showed that a sister concern of CMP was charging distributors' prices as shown in the price list.
6. Satish K. Mehta produced price list of AT. He stated that the goods covered by 5 Bills of Entry dated 25-4-1990 were DDC parts and AT parts and governed by the price lists effective from 1-1-1990. They supply these goods to Government departments as per DGS & D rate contract and quote prices on the basis of manufacturer's price list. Rate contract showed the basis to be distributor's price list at the relevant period plus 7%. Shri Jagdish K. Mehta, who was looking after the affairs of appellant stated that imports were priced as per the price list.
Manufacturer's authorised distributor in USA (M/s. Valley Detroit Diesel, USA), manufacturer's authorised export agent (M/s. Amwin Corporation, USA), M/s. Janis Exports, USA supplied similar parts at the list prices without discount and HL offered 35 to 40% discount based on volume of business. He admitted the price list prices are the prices at which goods are ordered and sold in the course of international trade since all except HL sell on that basis. He had negotiated with HL and there was nothing in writing to evidence such negotiation. Prices in price list are FOB USA/UK.In his statement on 19-5-1990, Shri Jagdish K. Mehta stated that Shri Praful Patel offered to show lower prices in invoices so as to save on customs duties and it was decided that HL will raise invoices at list prices less 45% though the real prices will be list prices less 5% and the differential price was to be paid to Shri Praful Patel in India in Indian currency, that they had destroyed telexes sent by them to CMP and quotations received from CMP as the quotations reflected price list prices. He admitted that Rs. 3 lakhs was paid in India to Shri Praful Patel at the end of December, 1989 and beginning of January, 1990 in two instalments and balance amount was to be paid on the occasion of his visit to India.
The subsequent statements of these two individuals confirmed the earlier statements. However, in the statements recorded on the second occasion, they alleged that the first statements were the result of threat of force and intimidation. Subsequently, they pleaded inability to make available copies of telexes and letter on account of competitiveness and failure to keep copies of documents.
7. Subsequently, appellant voluntarily paid Rs. 5,20,080.00 towards differential duty in respect of five consignments already cleared.
8. A letter of PNp stated that they are sole authorised distributors in India of AT and they import and arrange import based on distributors' prices shown in the price list. They were distributors of DDC till December, 1979 and were arranging import on the same basis. In the case of third party import they receive 6% commission and the manufacturer supplies goods on prices shown as distributors' prices shown in the price list plus 6% commission. They effect imports based on distributors' prices shown in the price lists.
9. Accordingly show cause notice dated 27-7-1990 was issued to appellant alleging the above facts and circumstances and proposing to load the value of components cleared already and yet to be cleared adopting the distributors' prices shown in the manufacturer's price list plus 6% (commission payable to PND) and to demand differential duty on such values. The value of components already cleared would be Rs. 9,26,989.00 and components yet to be cleared would be Rs. 32,74,759.00 as against the declared value of Rs. 5,48,893.00 and Rs. 14,64,691.00 respectively. It was also alleged that goods of value of Rs. 3,78,096.00 and Rs. 25,49,035.00 respectively were not covered by any valid licence and import of such goods was in contravention of Import (Control) Order No. 17/55 read with Section 3 of Imports and Exports (Control) Act, 1947 and the goods were liable to confiscation under Section 111(d) of the Customs Act, 1962 (for short, the Act). The notice alleged misdeclaration of value leading to liability for confiscation under Section 111(m) of the Act. The notice also proposed confiscation of components yet to be cleared and imposition of penalty.
10. The contents in the reply to the show cause notice can be summarised as follows :- Statement dated 19-5-1990 of Shri Jagdish Mehta was taken under threat and inducement and against his will and desire. He has also filed an affidavit dated 21-5-1990 rebutting the earlier statement on 19-5-1990. Shri Praful Patel of HL in his declaration made before the Commissioner of Oaths dated 24-8-1990 confirmed that he was the direct supplier and had not received Rs. 3 lakhs. (The declaration did not bear the seal or stamp of the Commissioner). Letters dated 3-8-1990 and 25-7-1990 of CMP and HL respectively indicated that the goods were surplus inventory disposed of at special negotiated prices. The supplier has passed on large part of the discount they obtained. The various telexes relied on in the notice have been misinterpreted by the department and such interpretation has to be ignored. M/s. Sesagoa had not imported any items imported by appellant. The supplier received discount of 55% to 60% and more as they were prepared to off-take the entire stock. The basis of pricing is always the price list of manufacturer and discount depends on the nature of the items, higher discount being offered for obsolete items. In the instant case, the goods were no more in vogue abroad and hence higher discount. The sum of Rs. 3 lakhs withdrawn from Bank was not paid to HL but utilised as shown in annexure V to the reply. The Department may examine the other imports at Bombay in the past which were cleared at comparable values. The prices offered to appellant were not special prices.
Notice did not refer to any evidence of contemporary import at higher prices. There is no evidence of remittance of extra consideration. It is not correct that the list dated 13-4-1990 showed the appellant's liability to the supplier. The admission that the subject invoices did not reflect correct prices and appellant was agreeable to pay Rs. 5,20,080.00 and the payment made was only to clear the other consignments. Licences produced are valid. In any event, appellant is willing to produce valid licence to cover the import.
(a) AT has a printed price list and has appointed PND as sole authorised distributor entitled to 6% commission on sales. The price list price plus 6% is the ordinary price at which these goods are available in India. Hence, the transaction value which is for less than such ordinary price cannot be prima facie accepted, particularly since the subject components are supplied by a trader in UK. (b) The documents seized from appellant's premises showed that the appellant had manipulated with the supplier to have the goods under-valued. This position was accepted by Shri Jagdish K. Mehta and Shri Satish K. Mehta in their earlier statements. This conclusion is also supported by the admission of Shri Jagdish K. Mehta regarding cash payment made and promised over and above the invoice value. Hence, the transaction value cannot be accepted.
(c) Transaction value of identical goods (Rule 5) was not available in respect of all the varieties of goods imported by appellant. In some instances, there was time lag.
(d) Actual imports by PND and by others through PND from the manufacturer was on the basis of manufacturer's price list price (distributor's price to dealers) plus 6% selling commission of PND. Thus the price list is the most authenticated document evidencing ordinary price in international trade. The two persons referred to above admitted that the manufacturer was selling on the basis of the price list price which is supported by the telex messages seized from appellant.
(g) Assessable value has to be determined under Rule 8. Assessable value has to be determined on the basis of distributor's price shown in the manufacturer's price list. To this must be added 6% commission which would have been payable to PDP on supplies by the manufacturer.
(h) Since the price list prices are ex-works (not FOB), charges by way of freight and insurance must be added. Actual incidentals for transport and handling at manufacturer's end must be added, wherever available. Freight and insurance must be added on the basis of actuals and where actuals are not available, on the basis of Rule 7 read with Notification No. 53/88 with reference to price list prices.
Thus the total assessable value of 12 consignments was worked out as Rs. 41,97,925.00 as against total declared value of Rs. 20,13,584.00.
No licences were produced to cover the differential value. Hence, the Collector ordered :- (a) Differential duty on the earlier five consignments has to be paid.
(b) Later seven consignments are confiscated under clauses (d) and (m) of Section III of the Act. Redemption is allowed on payment of fine as indicated in paragraph 42 of the order.
(c) Penalty in each of the 12 cases as indicated in paragraph 42 of the order.
(a) Statements of Shri Jagdish Kumar Mehta and Shri Satish Kumar Mehta recorded initially were the result of threat of force and intimidation and the same have been retracted without delay.
(b) The sum of Rs. 3 lakhs had not been paid to Shri Praful Patel of HL as denied by the latter and FERA proceeding in that behalf has been dropped.
(d) The list dated 11-4-1990 is only stock list and distributor's prices have been shown therein to be shown to customers for the purpose of negotiations and as appellant is paid 6% margin on such prices.
(e) The price list shows distributor's prices for "replacement parts". These are suggested prices which franchised distributors may charge to dealers operating under them and the same will not apply to parts exported by suppliers. Prices for replacement parts will be generally higher.
(f) The 12 consignments comprise about 650 varieties of parts of Earth Moving Equipment. 97 varieties of parts among the varieties covered by the manufacturer's price lists are shown therein as obsolete (90 of AT and 7 of DDC) and for 85 of the obsolete items price has not been shown in the price list.
(g) The imported parts were surplus lot lying with the supplier who was offering discounts thereon and in the case of obsolete items, discount was very high and prices declared were special negotiated prices.
(h) The Collector has relied on a solitary import of a small consignment and the same could not be relied on.
(i) Appellant has now produced copies of documents relating to 27 contemporary imports as additional evidence and these imports were at prices equal to or less than the invoice prices of appellant, (j) The telexes evidence agreed price as distributor's price less 5% and the Collector was in error in valuing the goods at the distributor's price and adding 6% as commission which in the ordinary course would be payable to PND. (k) Therefore, there was no justification to reject transaction value or to load the value. In any event, the transaction value of obsolete items could not be rejected.
(l) Various contentions raised by the appellant have not been considered by the Collector.
(m) Even if price is to be loaded, only the declared value can be debited against licence and Section 111(d) was inapplicable.
We have referred in brief to the purport of the statements given by Shri Satish Kumar Mehta, partner and Shri Jagdish K. Mehta who looks after the appellant firm. The former stated on 15-5-1990 that all the imports were governed by distributor's prices to dealers shown in the manufacturer's price lists, that they quote to their customers on the basis of such prices. The latter in his statement dated 16-5-1990 stated that they import these parts from (a) manufacturer's authorised distributor in USA, (b) manufacturer's authorised agent in USA, (c) a trader in USA and (d) HL, a trader in UK, that (a) to (c) charge exactly as per the manufacturer's price lists without any discount but HL offers 35 to 40% discount based on volume of business, that the list prices are the ones at which the goods are ordinarily sold in the course of international trade and there was no written record of price negotiated between him and Shri Praful Patel, proprietor of HL. On 19-5-1990, he stated that they purchased the goods from HL and not CMP, that HL was procuring supplies from CMP, that correspondence between appellant and CMP was at the instance of HL, that HL advised CMP to send quotations directly to appellant and advised appellant to send order directly to CMP, that though CMP sent quotations based on manufacturer's price lists, but appellant and HL had agreed that invoices will be raised by HL on list prices less 45% and HL personally promised to send proforma invoices as per agreed prices later. He also stated that HL offered to make adjustment in invoice prices to show lower prices in the invoices to save customs duty and in November, 1989 HL agreed to raise invoices at list prices less 45% though the actual cost will be list prices less 5% and the difference between the two prices was to be paid to Shri Praful Patel in India in Indian currency.
He claimed that their telexes to CMP and the CMP quotations had been destroyed as they were on the basis of list prices lest they fall into the hands of the department of competitors. He agreed to obtain copies from CMP and furnish the same to the investigators. He also admitted payment of Rs. 3 lakhs, out of the price to Shri Praful Patel in India in December, 1989 - January, 1990 in two instalments and balance amount was to be paid on his next visit. The amount was withdrawn from current account No. 7661 of appellant with Indian Bank. Invoice prices had been remitted separately through Banker. He also admitted that the invoice prices submitted to customers did not reflect correct value which was as per the price lists and expressed readiness to pay duty on consignments pending clearance and already cleared as per price list prices.
14. The above statements, and in particular the statement dated 19-5-1990 of Shri Jagdish K. Mehta completely supported the case of the department and were relied on by the Collector. According to learned counsel for appellant, on 21-5-1990 (next Monday), Shri Jagdish K.Mehta retracted the statements as having been recorded under threat of force, threat of arrest and duress and submitted an affidavit to that effect. It is argued that the Collector did not consider the effect of retraction. We find that he was again questioned on 21-5-1990 when he confirmed his earlier statements to be voluntary and truthful and furnished details of withdrawal of Rs. 3 lakhs from Bank. On that day Shri Satish K. Mehta was also questioned and he stated that there was adjustment, in invoice price and some amount had been paid to Shri Praful Patel over and above the invoice prices within a few days.
Appellant also paid Rs. 5,20,080.00 towards [differential] duty payable in respect of five consign ments already cleared. Shri Jagdish K. Mehta when questioned on 5-7-1990 and 6-7-1990 again confirmed his earlier statements as voluntary and truthful and stated that the supplies were as per 1989 price list less 5%. He also admitted the various telexes relied on and stated that the list dated 10-3-1990 reflected the agreed prices, that is, the list prices less 5% which were the correct prices and the list had been prepared to work out their total liability to HL.
Appellant also relied on a "declaration" said to have been furnished by Shri Praful Patel denying receipt of Rs. 3 lakhs and FERA proceeding initiated earlier has been dropped.
15. In our opinion the retraction by Shri Jagdish K. Mehta loses all significance in view of his subsequent statements confirming the earlier statements. The admissions are corroborated by the contents of the telexes (also admitted) as we shall presently see and the evidence of withdrawal of Rs. 3 lakhs at about the time when the payments were admitted to have been made. In this view the Collector was justified in relying on the admissions referred to above which clearly establish a deliberate act of suppression of correct price and misdeclaration of value and flow of extra consideration. Appellant has not produced a copy of the order allegedly terminating FERA case and, therefore, the reason for the alleged termination is not disclosed.
The Collector found the various telex messages relied on to be incriminating. Copies of the telex messages had been furnished to the appellant. The show cause notice also made reference to these documents as relating to the subject consignments. The only answer in this behalf in the reply (at page 9) was that the telex messages have been misinterpreted. Appellant did not state in the reply that the documents did not relate to the subject, consignments. According to learned counsel for appellant, the telex messages did not result in actual import of any goods, a case not propounded in the reply. According to learned counsel, total value of goods referred to in the telex message was US $ 3,65,780 which would support his contention that they cannot relate to subject consignments for which total declared value was about US $ 90,000 while the loaded value was slightly more than twice the declared value which will be far short of US $ 3,65,780. This would only suggest that only a part of the goods covered by the telex messages was actually shipped. Copies of the telex messages seen at pages 92, 92A, 94A, 95, 95A, 96 and 96A of paper book I show that appellant placed orders for supply of these goods with CMP at price list prices minus 5% and HL was also involved in the process. One of the messages was by appellant to CMP indicating confirmation of orders as discussed with Shri Praful Patel of HL as per 1989 price list minus 5%. In two other messages, appellant informed CMP of confirmation of order in conjunction with the manufacturers. It is thus clear that supply was actually made by CMP though invoices were raised by HL and the actual price was 1989 price list prices less 5%.
List dated 10-3-1990 of DDC and TA parts admittedly maintained by appellant was seized by the authorities. A copy of the list is seen at pages 64 to 91 of paper book No. I. Particulars of parts ordered, despatched and balance and the rate as well as the part number and description are seen in this list. There is no dispute that the prices shown are equal to price list price less 5%. Shri Jagdish K. Mehta in his statements recorded on 5/7-7-1990 stated that the list referred to price list prices less 5% which were the correct prices and also the prices agreed between him and Shri Praful Patel to be paid for the import of the goods and the list was prepared to work out the total liability to the supplier. Appellant offered no explanation in regard to the list in the reply to the show cause notice. According to learned counsel for appellant, the list was prepared only to be shown to the appellant's customers and satisfy them about the price list prices on which they offer 6% margin. No such explanation had been offered before the Collector. Further the columns in the list indicating quantity ordered, despatched and balance believe the correctness of the explanation belatedly offered in the course of arguments before us. The prices shown in the list negative the acceptability of the transaction value.
It is contended for the appellant that the price lists are for "replacement parts" and the prices are suggested prices which franchised distributors may charge the dealers under them and the prices will not apply to parts dealt with the other traders. Copy of the price list of DDC effective from 1-4-1989 is seen at pages 129 to 135 of paper book No. I. Copy of AT price list is seen at pages 136 to 167. The price lists do state that the prices are "suggested prices only". This statement cannot affect the relevance of the price lists.
DDC price list refers to list price, fleet price and D/N price. D/N price is the price at which distributors may sell the parts to dealers.
This price list does not indicate that D/N price is that price which can be charged by "franchised distributors". There is no such condition seen in the price list. AT price list also furnishes list price, flat price and distributors' price. The price list states that distributors' prices shown are the prices at which AT sells "replacement parts" to its franchised distributors and direct dealers and the prices are suggested with respect to distributors' prices to dealers operating under them. The price lists relate not to Earth Moving Machinery but refer to spare parts. In our opinion "replacement parts" mean only spare parts. The contention of appellant has no force as even the reply to the show cause notice stated that "The basis of pricing is always the price list of the manufacturer." Copies of the price lists were made available by the appellant to the officers. Shri Satish K. Mehta on 15-5-1990 admitted that AT spares are governed by AT price list copy of which was furnished by him and in general they always keep the price list as the basis of their deals. Shri Jagdish K. Mehta on 16-5-1990 stated that manufacturers authorised distributor, agent and another trader (Janis Exports USA) charge exactly as per the price list and without any discount and HL was offering discount based on the volume of business. He argued that the price list prices are the ones at which the goods are ordinarily sold in the course of international trade and the price list prices are FOB USA/UK. On 19-5-1990 he stated that though Shri Praful Patel agreed to give 45% discount, he wrote to CMP for quotation as suggested by Shri Praful Patel and CMP sent quotations showing price list price, that Shri Praful Patel said he will send invoices at price list price less 45% but that actual cost of the goods will be price list price less 5%. He also stated that the invoices submitted to customers do not reflect the correct values of the goods imported and the correct values were as per the price list and he was prepared to pay customs duty accordingly. On 5-7-1990, he stated that the relevant prices are distributors' price or D/N price indicated in the price lists. He also stated that "list price" and "fleet price" indicated in the price lists referred to prices for local sales within USA or UK and but for exports from those countries to India only distributor price or D/N price are applicable. On 6-7-1990, he stated that in the list dated 10-3-1990, he had shown the distributor's price less 5%. These statements completely negative the contention urged by learned counsel for appellant.
It is contended that the 12 consignments relate to about 650 varieties of parts and among the varieties covered by the price lists 97 varieties have been shown as obsolete and for 85 of the obsolete items, price has not been shown in the price lists and hence the quantification based entirely on price list prices cannot be correct.
It is further contended that the imported items were surplus lot and 45% discount was offered and hence price list prices less 5% cannot be adopted for the purpose of determining assessable value. It is true that for some among items shown as obsolete, the price lists of 1989 and 1990 do not furnish the price. This cannot affect the correctness of the assessable value determined by the Collector since he has relied on the prices shown in the list dated 10-3-1990 prepared by appellant.
The authenticity of prices shown in the appellant's list dated 10-3-1990 admits of no doubt. Those prices as admitted by Shri Jagdish K. Mehta are less 5% prices. That actual cost was arrived at by deducting only 5% as discount. Our attention has not been invited to any reliable material showing that the imported goods came from any surplus lot or carried 45% or "higher" discount. The correctness of the contentions urged is belied by the admission of Shri Jagdish K. Mehta.
Paragraph 4(ix) of the show cause notice referred to invoices of import of AT spares by the appellant from M/s. Amwin Corporation USA and M/s.
Janis Exports at prices more than the distributor prices shown in the relevant price list. Paragraph 14 of the notice referred to information provided by PDP (sole authorised representative in India of the manufacturer) to the effect that they arrange import from AT and DDC based on the price list. PND was obtaining 6% commission which would be included in the invoice value. Paragraph 15 of the show cause notice referred to invoices and Bills of Entry obtained from PND which also showed the price list price. Paragraph 17 of the notice specifically referred to an invoice dated 2-3-1990 obtained from PDP for supply of parts of M/s. G.M. Overseas Distribution Corporation, Singapore to M/s.
Sesa Goa Ltd., Goa against order dated 18-12-1989 at prices as per price list effective from 1-1-1990. According to learned counsel for appellant the invoice dated 2-3-1990 was for a small quantity of parts and thus solitary import at higher price should not have been relied on to reject the prices shown in the subject invoices. Learned counsel has not invited our attention to any copy of the invoice as having been produced by the appellant before us. Even assuming that this particular invoice related to a small quantity of parts, it cannot be said that the Collector acted on a solitary contemporary import. We have always referred to the mass of credible evidence relied on by the Collector, besides information regarding several other imports besides the invoice dated 2-3-1990. Hence, we find no infirmity as alleged.
Appellant has sought to produce additional evidence before us. The additional evidence consists of copies of invoices relating to 27 imports by Indian importers of several varieties of such parts from suppliers in UK, USA and Singapore and some of the relevant Bills of Entry. Learned counsel for appellant stated that the prices in these imports are lower in most cases and equal in some cases to the prices declared by appellant. No details of such imports were furnished in the reply to the show cause notice. It was merely-stated that department may examine past imports at Bombay. There is no satisfactory explanation offered for not relying on these documents before the Collector. In any event, in the face of the other evidence of a convincing nature referred to already, we are not satisfied there would be any justification to receive the additional evidence and remand the case for consideration of such evidence.
The preceding discussion clearly shows that there was ample evidence to support rejection of transaction value and to load the value. We have already rejected the contention based on obsolete parts.
There is a grievance that some of the contentions raised before the Collector were not considered. We find that the Collector did consider almost all the aspects referred to in the reply. However, we have noted in the form of points all the contentions raised before us and considered the same. Hence, no prejudice has been caused to appellant by the failure of the Collector to highlight any particular aspect dealt with in the reply to the show cause notice.
It is contended that even if price is to be loaded only the declared value and not the loaded value should have been debited against the licence. The Tribunal has granted such relief in several instance. See Uma Sons v. Collector of Customs, Calcutta, 1996 (88) E.L.T. 540 (Tribunal). We, therefore, set aside the confiscation of seven consignments under Section 111(d) of the Act.
25. For the reasons indicated already, we agree with the Collector that appellant is guilty of gross and deliberate misdeclaration of value justifying confiscation of seven consignments under Section 111(m) of the Act. We uphold the confiscation of seven consignments under Section 111(m) of the Act and set aside the confiscation under Section 111(d) of the Act. The Collector has fixed consolidated redemption fine under both the provisions. The quantification of fine for redemption in lieu of confiscation under Section 111(m) has to be determined afresh after determining the duty demand as indicated above.
It is further contended that the Collector having found that the real transaction value was the price list price less 5% discount, was in error in determining the assessable value on a different basis, namely, price list price plus 6% (commission of sole distributor in India of the manufacture). We are inclined to agree with this contention. Hence, the correct assessable value has to be determined by deducting 5% from the price list price as adopted by the Collector (which will be the price shown in the list dated 10-3-1990) and making additions in respect of freight and insurance.
Penalty has been imposed on account of aspect of valuation and licensing. Imposition of penalty under Section 112(a) of the Act on account of misdeclaration is justified, but penalty cannot be imposed on account of licensing angle. Hence, the question of penalty has to be determined afresh.
28. For the reasons indicated above, we set aside the impugned order and remand the case to the jurisdictional adjudicating authority for passing a fresh order in the light of directions in paragraphs 25, 26 and 27 (supra) and subject to the other findings in this order. Appeal is allowed in part accordingly.