Judgment:
1. This is an appeal preferred against the Order-in-Appeal No.Cal-Cus-1993/88, dated 21-11-88 passed by the Collector of Customs & Central Excise (Appeals), Calcutta.
2. The case of the Department is that appellants imported 7 PCS.Complete photo copiers in SKD condition under two Bills of Entry. They filed one bill of entry declaring the goods as spares of printing machines and in respect of other consignments, a bill of entry was filed by M/s. Sarya Udyog Pvt. Ltd. declaring as spares of photo copier. The goods were supplied by the same supplier which came by the same vessel. The goods were sought to be cleared by the appellants under OGL in respect of parts of printing machines and produced additional licence of M/s. Sarya Udyog Pvt. Ltd. for spares of photo copier. On examination the imported goods were found to be parts of photo copier which make complete photo copying machines in SKD condition and not spare parts of the printing machine or photo copier as declared. Further it was found they were old not used and the importer could not submit any valid licence covering such old and used goods. The contention of the appellants that they had an interest in the imported goods by M/s. Sarya Udyog Pvt. Ltd. to the extent they purchased the goods on High Sea Sale basis which is permitted under I.T.C. policy and since they were not the actual importers of both the consignments, the two consignments could not be clubbed together was not accepted by the Department. Accordingly, the goods were assessed at Rs. 1 lakh as against declared value of Rs. 52,460. The Deputy Collector who adjudicated the proceedings ordered for confiscation of the goods for contravention of provisions of Customs Act as well as under Imports and Exports Control Order. However, he gave an option to redeem the goods on redemption fine of Rs. 55,000/- in addition to imposition of personal penalty of Rs. 15,000/-. The appellants have filed an appeal before the Collector of Customs (Appeals) but become unsuccessful. Hence this appeal.
3. We have heard Shri N.C. Sogani, learned consultant for the appellants and Shri Prabhat Kumar, learned JDR for the Revenue.
4. Shri Sogani argued that clubbing of the two consignments imported by two different parties under two Bill of entries was entirely on wrong premises. It could not be done just because the goods were to be sold to appellants on High Sea Sale basis. In support of his contention, he has relied upon the judgment of Calcutta High Court reported in 1987 (30) ELT 345 (Collector of Customs v. Mitsuny Electronic Works, Calcutta and the Tribunal decisions in the case of Sharp Machines Pvt.
Ltd., Bangalore &Anotherv. Collector of Customs, Bangalore 1990 (46) ELT317 (Tri.) Kakar Toys Industriesand Anr. v. Collector of Customs, CalcuttaSusha Electronics Industries v.Collector of Customs 1990 (47) ELT 38 (Tri.) : 1989 (39) ELT 585. He said that parts in two consignments will not make of complete machines as some more parts such as paper feed section, developer unit etc. are required which are not included in the two consignments. Further the goods in question were not examined. He argued that photo copy machine is also a type of printing machine and as such there was no intention in misdeclaring as parts of printing machine. It was contended by him that appellants never claimed under OGL as the goods are covered by their licence as well as the Additional licence produced by M/s. Sarya Udyog Pvt. Ltd. He said that subsequent transactions were cleared under same licence.
5. Shri Sogani vehemently argued that burden lies on the Department to prove the under-valuation. In the present case invoice value cannot be rejected as it was neither proved that something extra was paid over and above invoice price nor shown similar goods have been imported at higher price at the relevant point of time. He said that value was determined based upon the information of one firm M/s. Macneill & Mayor said to be an agent of manufacturers. Neither that firm was an agent nor such information was disclosed to the appellants. He also said that the production of particular type of goods in question has been discontinued by the manufacturer since 1983 and hence the method adopted in arriving at the value is arbitrary.
6. Shri Prabhat Kumar while countering the arguments justified the action of the Department in clubbing of two consignments together and the charge of ITC violation as well as misdeclaration. He said that clubbing was proper in view of the fact that the goods were supplied by the same supplier which come in same vessel and the appellants were the owners of goods as the consignment was purchased on High Sea Sale basis. They are the importers as per declaration under Section 2 of the Act particularly with reference to Section 2(26) which reads as under : "(26) "importer", in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer." 7. He strongly relied upon the decision of the Supreme Court in the case of Sharp Business Machines Pvt. Ltd. v. Collector of Customs [1990 (49) ELT 640 SC] and the decision of the Tribunal in the case of Shiva Shakti Enterprises v. Collector of Customs [1991 (52) ELT 439] and urged that the goods imported by the appellants in the two bills of entry are to be clubbed together. Since there has been a clear misdeclaration of the description of the goods, the declared price cannot be said to be the transaction value and question of its acceptance does not arise. He stated that there is nothing wrong if value for the purpose of customs duty is determined on the basis of quotation or on price list of supplier available with local agent represents the correct value of goods relying upon the decision in the case of Ware & Ware Products v. Collector of Customs [1990 (48) ELT 421]. He said that M/s. Macneill & Mayor Ltd., Calcutta, who was the local agent of manufacturers and the value determined based upon their information was justified.
8. We have considered the arguments advanced on both sides and perused the records. The points to be considered in the present appeal clubbing of two consignments, misdeclaration with regard to the description of the goods, valuation and consequently imposition of fine and penalties.
9. It is clear from the findings given by the authorities below that on detailed examination the imported goods under two consignments were photo copy machines in SKD condition which were old and used goods. As already stated the goods were supplied by the same foreign supplier and the same were shipped by the same vessel. They imported one consignment on their own and other consignment was purchased on high sea sale basis and accordingly they were not only the owners of both consignments, but also the importers at the time of importation. The action of the Deputy Collector in clubbing the goods covered by the two Bills of Entry is supported by the judgment of Supreme Court in the case of Girdharilal Banshidhar v. Union of India "In the said case, the appellants were granted a licence to import iron and steel belts, nuts, set screws, machine screws and machine studs, excluding bolts, nuts and screws adopted for use on cycles.
They imported nuts and bolts which were components of "Jackson type single bolts and nuts". The importation of "Jack type single bold oval plat belt fasteners" was prohibited. Single bolt felt fasteners were composed of three components, viz. (i) a bolt, (ii) a nut and (iii) washers. The washers to, fit into the bolts and nuts imported by the appellants were found to have been separately imported by a firm called Nawanagar Industries Ltd., which was owned or controlled by close relations of the appellants. The Collector held that the bolts and nuts imported by the appellants were in reality the components of the prohibited article and imposed penalty on them.
The matter ultimately came before the Hon'ble Supreme Court, who held that (i) importing components of a prohibited article was importing the prohibited article, and (ii) the evidence that washers imported by the relations of the appellants was considered by the Collector as evidence to confirm his conclusion that the nuts and bolts imported by them were in reality the components of the prohibited article. In the said case, the Hon'ble Supreme Court observed, inter alia as follows: "In appears to us that it does not stand to reason that a component part which has no use other than as a component of an article whose importation is prohibited is not included in a ban or restriction as regards the importation of that article. Expressed in other terms, we cannot accede to the position that it is the intention of the rule that the importers are permitted to do indirectly what they are forbidden to do directly, and that it permits the importation separately of components which have no use other than as components of an article whose importation is prohibited, and that an importer is thereby enabled to assemble them here as a complete article though if they were assembled beyond the customs frontiers the importation of the assembled articles into India is prohibited." 10. The decisions cited by the appellant's counsel are not applicable to the present case as the facts are distinguishable. Further the Tribunal, relying on the ratio of the decision of Calcutta High Court in Collector of Customs v.Misony Electronic Works (supra) held that one has to look into the respective licence and not to the fact that if all the consignments covered by all the bills of entry are assembled together there will be complete machines. This view is no longer a good law in view of the observation made by the Supreme Court in the case of Sharp Business Machines Pvt. Ltd (supra). The relevant observation which is in para 12 of the judgment is reproduced as under : "It is an admitted position that fully finished plain paper copiers were a prohibited item for import and thus the device adopted by the company in the present case was a complete fraud on the import policy itself. Apart from the above circumstances in our view the Tribunal was not right in setting aside the finding of the adjudicating authority and in taking the view that one has to look into the respective licence and not to the fact that if all the consignments covered by all the bills of entry assembled together, there will be a full and complete machinery." 11. In the light of the above discussions, we hold that the Deputy Collector was right in clubbing the imported goods covered under two bills of entry and coming to the conclusion that the imported goods were 7 pcs. Complete photo copiers in SKD condition. It is not disputed even before us that the goods in question are not old and used. Since there has been clear misdeclaration of the description of the goods in the bills of entry and no valid licence was produced for such old and used photo copier machines, the appellants have contravened the provision of Import and Export (Control) Order reading with Section 11 of the Customs Act, 1962 and accordingly the goods were liable to confiscation. Since there has been a misdeclaration of the description of the goods, the declared price cannot be said to be the transaction value and question of its acceptance does not arise, as it was rightly argued by the DR. But on the point of valuation, we concur with the arguments of the appellant counsel that the burden lies on the Deptt.
not only in bringing sufficient evidence on record, but also same should be disclosed to the other side for rebuttal while determining the value of the goods. Since this has not been done as contended by the appellants' counsel and the contention of the appellants that M/s Macneill & Mayor were not the local agents of the manufacturers and on the other hand, they have got some documentary evidence to show the relevant price of the similar imports have to be considered by the adjudicating authority. Hence we are remanding the matter to the concerned Deputy Collector on this limited issue to redeter-mine the value after giving an opportunity to the appellants. Since the goods are under detention, he is directed to dispose of the matter at the earliest possible time on receipt of this order. As regards fine and penalties, though imposition was justified for contravention of the provisions of the Import & Export (Control) Order and the Customs Act, still some more lenient view is called for, particularly in view of the fact that imported goods were old and used. Accordingly, we reduce the redemption and penalty to Rs. 25,000/- and Rs. 5,000/- as against Rs. 55,000/- and Rs. 15.000/- respectively. Thus appeal is disposed of in the above terms.