Judgment:
1. Order dated 16-1-1996 passed by the Commissioner of Customs, Cochin determining value of a consignment as Rs. 11,49,140/- under Rule 8 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (for short, the Rules), confiscating goods under Section lll(d) of the Customs Act, 1962 (for short, the Act) read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992, with option to redeem on payment of fine of Rs. 10 lacs and imposing penalty of Rs. 1 lac under Section 112(a) of the Act is under challenge in this appeal.
2. Appellant imported a consignment of second hand photocopier machines of Japanese origin from a supplier in Singapore and presented Bill of Entry dated 9-11-1995 along with Invoice and other documents. The consignment was declared as consisting of 88 photocopying machines of various types and grades including 5 coloured machines of the total CIF value of Singapore $ 43,070 equal to Rs. 10,86,656/-. Examination showed that of the 88 photocopiers mentioned in the Invoice, 12 machines were not in the consignment and instead the consignment contained also 6 machines not covered by the description in the Invoice. It was also felt that the value declared was not correct.
Being second hand machines, import required specific licence and the appellant had not produced any licence but desired clearance under OGL.
When the Custom House informed the appellant about these objections, he gave a letter dated 7-11-1995 waiving show cause notice and requestiifg personal hearing, which was granted on 9-12-1995. The Custom House Agent of the appellant participated in the personal hearing and made submissions. Commissioner held that the value suggested, namely, Rs. 11,49,140/- was correct, that there was violation of licence requirement and hence goods were liable for confiscation and appellant rendered himself liable to penalty. The Commissioner also observed that consumer goods like photocopiers attracted very high margin of profit.
It was with then finding that he passed the order as indicated above.
3. Learned Counsel for the appellant contested the value determined by the Commissioner and stated that the order does not give any basis for value determined or the reason for rejecting the transaction value. He also contended that Rule 8 of the Rules which enables best of judgment assessment could not be invoked unless methodology prescribed by the preceding rules have been exhausted. These contentions were rebutted by Shri M. Ali, JDR.4. This is a case where the appellant deliberately waived show cause notice by letter dated 7-11-1995, copy of which has not been produced.
If a copy had been produced, we could have definitely known the information made available on the basis of which he waived show cause notice. Submissions made in the course of personal hearing are referred to in the impugned order. The submissions made relate only to licensing angle and not valuation angle. Appellant has produced before us revised Invoice dated 22-12-1995 said to have been received from the supplier.
It is stated that the appellant asked for a revised Invoice in view of the shortage of 12 machines and the addition of 6 machines. According to the Learned Counsel of the appellant the Invoice was not made available to the Commissioner. Weight to be attached to the invoice value on the declared value depends on a host of circumstances. If the Invoice is otherwise reliable and there is no material to cast any doubt about the correctness of invoice value, ordinarily such value can be accepted. However, admittedly, the number of machines and the description of the machines given in the Invoice are not fully correct.
12 machines described in the invoice were not found in the consignment and six machines not described in the invoice were found in the consignment. In these circumstances, the invoice value or transaction value cannot have much relevance. It was in these circumstances that the Commissioner assessed the value under Rule 8 of the Rules. No doubt, the Commissioner could have done so mentioning the basis of valuation. However, the value being suggestion must have been informed to the appellant who, nevertheless, did not make any submissions in that regard before the Commissioner. Revised invoice was also not produced before the Commissioner. Though copy of the Bill of Entry has been produced before us, the copy does not contain entries on the reverse of the Bill of Entry which would throw light on any admission which the appellant or his agent would have made. In these circumstances, we are of opinion that the appellant never intended to challenge the value suggested by the Custom House and therefore he cannot challenge the same at this stage.
5. So far as confiscation is concerned, it is on account of import of goods which require specific licence but without licence. Therefore, the confiscation ordered cannot be found fault with. Appellant has serious grievance about the quantification of redemption fine. It is stated that the quantum of fine is excessive even considering the value of Rs. II1/2 lacs determined by the Commissioner. It is also contended that the statement of the Commissioner that these goods attract very high margin of profit is a vague statement. We asked the Learned Counsel for the appellant whether the appellant would like the matter to be sent back for re-quantification of redemption fine and penalty or whether the appellant would like the Tribunal to arrive at a reasonable figure based on the data and circumstances available. He answered that the Tribunal may determine the amount and the case may not be sent back.
6. We have referred to all the circumstances available on record. The confiscation is not in regard to under-valuation or mis-description but only in regard to licensing angle. Penalty is evidently based on all the irregularities discovered. Having regard to all the circumstances, we reduce the redemption fine to Rs. 5 lacs and penalty to Rs. 50,000/-.
7. The impugned order is modified and the appeal is allowed to this extent.