Full Judgment
Monica Electronics Ltd. against Invoice No. X51496, dated 19-5-1994 at a unit value of US $ 14.50 per piece. The Customs authorities, therefore, proceeded against the appellants for misdeclaration of the goods and under the impugned order confiscated the goods under Section 111(m) of Customs Act, 1962, with a redemption fine of Rs. 8.5 lakhs, demanded differential duty of over Rs. 9.6 lakhs on account of assessing the goods at the value of HK $ 2,18,280 and imposed penalties of Rs. 10 lakhs on M/s. Weston Components Ltd. and Rs. 5 lakhs on Shri Sunil Wadhwani, Director of the appellant company. As both these appeals by the appellant importer and Shri Sunil Wadhwani are directed against the same impugned order, both the appeals are taken up together and are being disposed of under this common order.
2. The appellants have contested the enhancement of the value and have maintained that the value declared in the invoice dated 15-4-1994 produced before the Customs represented the correct transaction value.
With regard to the higher value declared in the export declaration at Hong Kong, they have submitted that it was the result of an error and offered the following explanation: "The error in filing incorrect declaration was primarily due to the reason that while filing the declaration, the export Clerk misunderstood the currency as US $ instead of Hong Kong $ 26,500 and multiplied the Hong Kong $ by the US $/ Hong Kong $ exchange rate plus insurance and freight and arrived at the value of Hong Kong $ 2,18,180." 3. During the hearing of the appeals on 13-8-1999 a letter dated 18-12-1996 from the supplier was also produced explaining that the value furnished in the export declaration dated 6-5-1994 was incorrect and the appellant had filed a revised declaration indicating the correct value on 20-5-1994. The appellants have also challenged the comparison of the value of the goods with the supply to M/s. Monica Electronics Ltd. on the ground that the goods supplied to M/s. Monica Electronics was not the same as the goods under import by the appellant. They have submitted that appellant's goods were different and bore the mark TSU2-EOIP, while supplies to M/s. Monica Electronics was TSU2-EOIP R190733. The appellants have also produced copy of catalogue in support of this contention. They have further contended that similar tuners (parts of TV) had been imported by M/s. Golden Industries, New Delhi and M/s. Prestige Industries, New Delhi @ 1.75 US $ per piece and if the goods were to be assessed on the basis of comparable price, unit price of 1.75 US $ would be appropriate. They have contended that there was no misdeclaration involved inasmuch as the invoice had declared the goods as "electronic parts" and the value declared was the transaction value. During hearing of appeals it has been stressed that no evidence of extra payment has been produced in the instant case to substantiate the allegation of misdeclaration of value. The appellants have also submitted that declaration as "mechanical tuner" in the bill of entry is of no consequence for the reason that, under the import policy, both electronic tuner and mechanical tuner are permissible for import.
4. The appellants have contended that the imposition of penalty on Shri Sunil Wadhwani was entirely unjustified since no evidence had been brought on record to show that he had played any dishonest role in the import of the goods or in making false declaration of the value before the customs.
5. As against the aforesaid explanations and submissions made by the appellants, it has been contended for the Revenue that this is a case of deliberate misdeclaration of value with intent to evade Customs duty. The goods, on examination were found to be DBS tuner i.e.
sattelite tuners but in the invoice and other documents the real identity of the goods as DBS tuner was not mentioned. The description of the goods on the packages, except in the case of one packet, has also been removed to conceal the real identity of the goods. The ld. DR has also stressed that the goods imported by M/s. Monica Electronics was also sattelite tuners. This import was also at the same price as 14.50 US $ as the correct value of the importer goods as declared in the export declaration to the Hong Kong customs. The supplier in both the cases was also the same. The goods imported by M/s. Prestige Industries and M/s. Golden Industries cannot be used for comparison as they were not satellite tuners, but ordinary tuner. It was also submitted that appellants explanation of clerical error does not stand to scrutiny. The value could not be mistaken or confused with US $ as the correct value of the goods at 14.75 US $ bore no resemblance to the declared value of HK $ 13.25. Further, on the declared value of 13.25 HK $ CIF per piece the value of the consignment of 2000 pieces does not work out to Hong Kong $ 2,18,280 as declared to Hong Kong Customs.
Further, the declaration filed before the Hong Kong customs was on FOB basis while the invoice prepared for the buyer was on CIF basis. For these reasons the explanation of the appellants carries no conviction and, accordingly, should be rejected.
6. We have perused the records and have considered the submissions made by both the sides. We find that the goods imported by the appellant and goods imported by M/s. Monica Electronics were both sattelite tuners and both the supplies were from the same source. Therefore, the appellants' submission that they are not comparable goods cannot be accepted. Further, to the catalogue produced by the appellant, both TSU2-EOIP and TSU2-EOIP R190733 are sattelite tuners and conform to the specifications for sattelite tuners. Therefore, the Customs authorities were right in adopting the higher value for the consignment as declared to Hong Kong Customs. As the correct description of the goods as sattelite tuner had been concealed from all the import documents, and as the value was also grossly under-declared, it has to be held that the appellants have misdeclared the goods with intention to evade duty.
In these facts and circumstances, the confiscation of the goods, imposition of penalty on the appellant company and demanding duty at the higher value have been correctly done in the impugned order.
However, imposition of penalty on Shri Sunil Wadhwani is found to be unjustified, as no evidence of his personal involvement in making the misdeclaration is noticed. Therefore, his appeal, being Appeal No.C/45/98-A, is allowed and Appeal No. C/44/98-A of M/s. Weston Components Limited is rejected.