Full Judgment
1. The Customs also recorded the statement of Shri Devang Avlani the nephew of the present appellant. In his statement he claimed that the suppliers namely M/s. Inter Export had purchased the DCDA from M/s.
Jovian for about US $ 1500 PMT. Devang's father Narottam was the brother of Jitendra Avlani, the importer.
2. The Customs also noticed imports of identical goods i.e. DCDA 99% of Chinese origin supplied by M/s. Jovian Creations, Hongkong to other persons in India at prices of US $ 1700 P.M.T. The supplies were for quantities ranging between the 5 P.M.T. to 10 P.M.T. Based on this evidence, the Show Cause Notice was issued seeking assessment at enhanced valuation, confiscation of the goods on account of misdeclaration and for imposition of penalty on the importers. The Show Cause Notice also covered a Video Camera seized from the residence of Shri Jitendra Avlani which was sought to be confiscated under Section lll(d) and lll(p) of the Customs Act.
3. The Commissioner in his impugned order confiscated the goods, permitted their redemption, imposed penalty of Rs. 5.00 lacs on the importers, and enhanced the value of the goods to US $ 1700 P.M.T. The appeal is against this order.
4. Shri S.N. Kantawala the ld. Advocate arguing for the appellants claimed that the confessional statements made by the appellant were not voluntary. It was claimed that the appellant was subjected to questioning and the statements extracted in such a situation lacked evidentiary value. It was claimed that the Collector had not determined the price of the goods in terms of the Customs Valuation Rules. In the entire order the Collector has not discussed as to under which Rule he had enhanced the value. It was further claimed that the under valuation has to be proved with corroborative evidence which was lacking in the present case. He submitted that the evidence as to contemporaneous import is not adequate inasmuch as the quantities imported under the cited invoices were much lesser quantities than in the consignment in dispute. As regards the penalty, the ld. Advocate stated that his clients had suffered a loss by having to pay duty at the enhanced valuation and also by having to pay the redemption fine. He stated that considering this aspect the Tribunal in their interim order had prescribed deposit of Rs. 1.00 lac towards the penalty.
5. Shri K.L. Ramteke the ld. JDR citing from the Commissioner's order stated that adequate evidence had been led by the department to sustain the increase in the valuation.
6. I have carefully considered the rival submissions made and have perused the Valuation Rules. Rule 4 of the said rules shows in what cir- cumstances the transaction value of the goods is to be accepted.
In the appeal memorandum it has been stressed that Sub-rule proviso 2(d) of Rule 4 does not apply here because no relationship has been established between the supplier and the buyer. It is claimed that the fact that they are blood relations does not make them related persons in terms of the rules. We do not find any specific allegations in the show cause notice invoking this particular provision. The show cause notice merely narrates the relationship and then alleges mis-declaration. In doing this the Customs have rejected the claim that the transaction value, be accepted.
7. The evidence on which the adjudication order is based is substantial. It is not possible to accept the claim that the statements of Shri Avlani were not voluntary because the statements were made over a number of days includes later period when he was not required to be available for investigation on continuous basis. It is significant that these statements were never thereafter retracted. As regards corroboration, we find that the deponent's nephew whose father was the owner of the supplier had also claimed that the value at which the supplier had purchased the goods was US $ 1500 P.M.T. Shri Jitendra himself had secured those invoices and had submitted them to the Customs. This has come out in the voluntary confessional statement of Shri Jitendra.
8. The 4 invoices relied upon in the show cause notice by which the first supplier had supplied the identical goods at the price of US $ 1700 P.M.T. are also material. The definition of identical goods stipulates that the imported goods should be the same in all respects including the physical characteristics, quality, country of origin and suppliers. Since the Show Cause Notice relied upon the value of identical goods already imported it becomes clear that the allegations were for determination of value of the impugned goods under Rule 5 of the Valuation Rules. It may be that the Commissioner in his order has not specifically referred to this rule but the contents of the evidence showing contemporaneous import from the same supplier leave no doubt as to which Rule was being alleged.
9. As regards the argument that the Customs could have settled for the lower valuation of US $ 1380 P.M.T. accepted by the Madras Custom House. We observe that we do not [have] any information of the circumstances in which the price was enhanced to that extent only and no further. We, therefore, do not want to consider this argument.
10. On the basis of the evidence we uphold the enhancement of the value.
11. We have given careful consideration to the plea that the assessee has suffered on account of having to pay extra on account of the enhanced valuation and also on account of having to pay the fine and penalty. The ld. Advocate further submits that they had to pay demurrage on the goods up to the time of their clearance in February, 1993. We find substance in these arguments but not in the suggestion of the ld. Advocate that the penalty be limited to what has been deposited in pursuance of the stay order. Considering the factors involved we reduce the quantum of penalty from Rs. 5.00 lacs to Rs. 2.00 lacs.
Subject to this modification, the appeal is rejected.