Full Judgment
2. Thereafter, the matter was listed a number of times but were adjourned with direction to the departmental representative to call for original file for the purposes of verification of the appellant's allegation that the requisite Commissioner's approval in terms of the provisions of Section 11A was not taken. On 09/06/2005, the original file was produced and was scrutinised by the Ld. Advocate Shri S.N.Kantawala appealing for the appellants. On being shown that the Commissioner's approval was obtained, Shri Kantawala, dropped the said allegation and pleaded that the matter be heard on merits on 1.0/06//2005. However, on the said date, the matter was called and passed over also but no appearance was caused. Inasmuch as the Hon'ble High Court has directed to dispose of the matter expeditiously, and the matter has been listed a number of times, we proceed to hear the Ld. DR and have gone through the impugned order ourselves.
3. Vide his impugned order, the Commissioner of Customs has confirmed duty of Rs. 55,51,896/- against the appellants on the finding of the under valuation of broadcasting equipments imported by them. In addition, personal penalty of identical amount has been imposed along with confirmation of interest.
4. As per facts on records, the appellants imported broadcasting equipment viz., Hitachi Z-ONE-D Camera System and accessories on various dates and filed bills of entry for the same. However, on a doubt being entertained about the correct value of the imported goods, investigations were initiated by the revenue. During the course of investigations, it was revealed that the appellant is exclusive agent for M/s. Hitachi Denshi Ltd., Japan for their entire range of products including the goods imported by them. Incriminating documents recovered from the office premises of the appellants during the course of the searches effected by the officers also revealed that the price list of the manufacturer reflected the price of the goods, which was much higher than the price declared by the appellants in the Bills of Entry.
Correspondence exchanged by the appellants with M/s. Hitachi Denshi Ltd., Japan, was also found indicating that the value of the goods as reflected in the invoice was not the correct price paid by the appellants to their overseas suppliers. This evidence has been discussed by the Commissioner in para 10,1 1 & 12 of the impugned order.
5. It was also noticed that the equipments imported by them at total landed cost of Rs. 3,22,026/- was sold by them to M/s Gemini Television, at a price of Rs. 26.43 lakhs. All these indicated that the appellants had grossly under valued the imported items.
6. On the above basis, proceedings were initiated against the appellants, which culminated into the impugned order passed by the Commissioner of Customs. The Commissioner in his impugned order has observed as under: In this case the price list dated 06/02-95 and 18. 12. 95 of the manufacturer M/s. Hitachi Dens hi Lt., do not show any discount schedule. The only document which talks about discount is the estimate dated 30/8/95 of the manufacturer. This estimate indicates a special discount of Japanese Yen 8,0.5,400 - for the purpose of two sets of Hitachi Z-One-D Camera. This appears to have been a special discount offered only to a particular buyer i.e. M/s.
Shimnil Machine Tools and as such would not be admissible in accordance with the valuation rules referred above. The price indicated in the import invoices and the corresponding bill of entry do not therefore represent the transaction value as contemplated under Rule 4 of the said valuation rules. The correct value of the goods is as given in the price list of the manufacturer issued from time to time as discussed above and in particular the price, list dated 060295 and 18.12.95 and therefore the correct value for assessment has to be determined by proceeding sequentially through Rule 5 to 8 of the Customs Valuation Rules. The relevant data regarding contemporaneous identical or similar imports is not available for arriving at the value under Rule 5 and 6 of the CVR, 1988. Hence, Rule 5 and 6 are not applicable. Data relating to identical or similar imported goods sold at the same commercial level as that of the imported goods is also not available. Hence, Rule 7 is not applicable. As no quantifiable data with regard to cost of production and cost overheads have been produced by the importers, Rule 7A is also not applicable. Therefore, the value has to be determined under Rule 8 read with Rule 9, using reasonable means consistent with the principles and general provisions of Customs Valuation Rules 1988 read with Section 14(1) of the Customs Act. As explained above, the manufacturer M s. Hitachi Denshi Ltd., Japan had published different price lists at different occasions.
These were the price lists available to M/s. Sansho Co. Ltd., Japan the authorised export agents of the manufacturers in Japan. Hence, the prices indicated in these price lists dated 08/02/95 and 18 12 95 appear to indicate she actual prices of the Hitach Z-ONE-D Camera Systems and accessories imported by the Noticee M/s. Shimnit Machine Tolls and Equipments Ltd., and Ms. Rushmit Exim Pvt Ltd., Mumbai, tinder various Kills of Entry. These prices appear to be the-correct prices of imported goods under Rule 8 of Customs Valuation Rules 1988. Duty evaded on the basis of these arguments, for each Bill of Entry, is indicated at Appendix XIV of the show cause notice. The total duty evasion works out to Rs. 55,95,830/-.
7. The appellants in their memo of appeal has contested above finding on the ground that the appellant was not the exclusive agent of M/s.
Hitachi Denshi Co. Ltd..; that the price lists of the manufacturer relied upon by the revenue could not be made the basis of enhancing the value, inasmuch as there was no evidence of contemporaneous imports; that the subsequent sale of the goods to M/s. Gemini Television at a price higher than the imported price cannot be made the basis for sustaining the charge of under valuation; that the order of clearance in respect of the bills of entry was accorded by the proper officer after due scrutiny and verification and the proviso to Section 28 could not have been invoked against them.
8. After considering the revenue's stand and the appellants ground as taken in their memo of appeal, we are of the view that there is ample evidence on record as discussed by the Commissioner in his impugned order to "prima facie" sustained the charge of under valuation against the appellants. The detailed argument and the appreciation of evidence can be done only at the time of final hearing of the appeal. Suffice it to say at this point of time that the appellants has not been able to make out a prima facie case in their favour so as to allow the stay application unconditionally. It is also noted from the stay petition that the appellants has not pleaded any financial hardship and no evidence to that effect has been produced on record. In these circumstances, we are of the view that the direction to deposit 50% of the duty involved (which would come to around Rs.27.50 lakhs approximately), out of the total duty of Rs. 55.51 lakhs and penalty of Rs. 55.51 lakhs approximately, would suffice for the purpose of Section 35F of the Central Excise Act, 1944. We order accordingly.
9. The appellants should deposit the amount in question within a period of eight weeks from the date of receipt, of the order and report compliance thereafter on 17/08/2005. when their appeal would be taken up for disposal subject to ascertaining compliance.