Full Judgment
J. Mahabeer & Co. was to be paid 20% of the cif value by each of the buyers towards commission, technical advice and installation charges.
It is also confirmed by the statements of Managing Director and other officials of M/s. Mahabeer & Co. Notice was issued proposing inclusion of this 20% to the cif value in the assessable value of the machine, and confiscation of the machines under Section 111(m) since the value of the machines was not declared to be this extent. The assessees resisted the contention, on various grounds. The Collector passed orders, separately in the case of each importer ordering inclusion of the amount in the assessable value, confiscating the machines under Section 111(m) with option to redeem on payment of fine of Rs. 25,000/- in each case. Hence these appeals.
2. Appellants are absent and have requested decision on merits. We have heard the Departmental Representative.
3. The contention in the appeal that 20%, which was paid to M/s.
Mahabeer & Co. included, not only commission but also comprised technical advice and installation charges has not been substantiated by indicating which of these elements constituted what proportion of the 20%. Neither the appellants nor M/s. Mahabeer & Co have indicated apportionment of this 20% towards each of these items. A contention was urged before the Collector that M/s. Mahabeer & Co has been informed by the principal that the commission would be 5%. However, we have found this reference in the Collector's order. There is nothing of this mentioned in the grounds of appeals nor is that any evidence by way of any letter from the principal. The finding of the Collector that the indenting agent had booked in its account the entire 20% as commission is not disputed, nor his finding that the director of one of the appellants M/s. Kumar Printers stated that 20% was to be paid to M/s.
Mahabeer & Co. irrespective of whether the company had installed the machine or not. In the absence of any substantiation, we are unable to agree that only a part of the 20% should be included as commission.
4. The contention that there was no wilful misstatement or misdeclaration to evade duty and appellants were under the genuine impression that the commission, charges towards technical advice and installation, being post import expenses need not be declared is not acceptable. The Bill of Entry provided a specific column to show the amount of commission payable to the local agent. Even assuming that the appellant was to pay as commission only a part of 20%, it should have indicated this fact in the column relating to this. This has not been done and there is no explanation as to why it did not do. In these circumstances, confiscation of the machines was in order.
5. The redemption fine in each case is also nominal and hence we decline to interfere.