Soni Impex Vs. Commissioner of Customs (Port) - Court Judgment

Excerpt:
1. this appeal has been filed against the order of the commissioner of customs (port), kolkata.2. brief facts of the case are that acting on intelligence one consignment of photocopier parts imported by m/s sony impex, delhi vide b/e sl. no. 152755, dated 12-5-2003 was misdeclared and grossly undervalued. the officers of the directorate of revenue intelligence, kolkata zonal unit, initiated an investigation. during investigation, the examination of the consignment was done by the officers posted at the dock in the presence of dri officers and cha of the importer. the statement of shri manish ghelani, proprietor of the importing firm was also recorded under section 108 of the customs act, 1962. from the bill of entry and other import documents, it was seen that relevant details of the imported items viz. brand, make, part number etc. had not been declared. the importer was asked to submit the details as well as "country of origin" certificate from the respective chambers of commerce for the subject goods. manufacturer's invoice was also asked for. the importer submitted a list issued by the supplier of singapore which showed model wise break up and make of some items. he, however, did not produce the manufacturer's invoice for the subject goods and certificates of origin in proper format issued by the respective chambers of commerce of different countries. since relevant details of all the items were not made available. a detailed inventory showing brands, makes, part numbers, original equipment manufacturer was, thereafter, prepared by dri by conducting through investigation of the contents of all the packages imported in the subject consignment. on comparison, the price list of katun singapore and the imported goods, the actual values of the subject goods ranged from 4 to 25 times of the declared values. a show cause notice was issued on 3-12-2003. the commissioner vide his order dated 19-4-2004, rejected the values shown in the invoice and re-determined the value and confiscated the goods with an option to redeem the goods on payment of fine of rs. 9,00,000/- and imposed a penalty of rs. 2,00,000/-.3. heard shri r.k. chowdhury, ld. advocate along with shri b.n. pal, ld. advocate both for the appellants and shri n.k. mishra, ld. jdr for the respondent.4. shri chowdhury for the appellants submits that they have adduced evidence of the contemporaneous import of identical goods but the commissioner of customs rejected the same on the ground that the make was not mentioned in the import document without making any efforts to verify the same by calling upon the records concerning the same. he submits that they have produced the same evidences of previous imports showing the value at which the department allowed the clearance of the goods. the department cannot discard the value already accepted by them earlier and the same value declared by us in the present case merely at their sweet will. he further submits that the commissioner has on the one hand alleged that the quotation are not being used for rejecting the transacted value but on the other hand determine the transacted value based on such quotation. he, therefore, submits that the impugned order, ex-facie, proceeds on surmises and conjecture. he submits that it is well settled in law that mere quotation is not sufficient for the purport of determination of value unless there is no evidence of contemporaneous imports of goods. he relies on the judgment in the case of kisan das & sons v. commissioner of customs, mumbai reported in 1999 (112) e.l.t. 227 (tri.). he submits that the transacted value cannot be rejected routinely in the absence of evidence of contemporaneous import. he also relies on the decision in the case of virat enterprises v. commissioner of central excise, chennai reported in 2001 (132) e.l.t. 691 (tri. - chennai). he submits that the details of the goods were supplied by the appellants which is evident from the invoice at page 50 of the paper book. he submits that in the impugned order, the commissioner of customs, in the context of classification, has specifically held that the allegation of mis-declaration is not made on the said ground in the show cause notice. therefore, he submits that so far the above issue is concerned, the mis-declaration of classification made by the departmental representative is inconsistent with and de-hore the impugned order. the importer is required to make true and correct declaration of the description of the imported goods and to suggest the customs tariff heading that may applicable and it is the duty of the assessing officer to examine the goods and to determine the true and correct tariff classification of the same. he submits that in the impugned order, there is no material to reject the classification suggested by us. ld. advocate, shri chowdhury, relies on the judgment in the case of m/s asian rubber works v. commissioner of customs, ahmedabad reported in 1999 (109) e.l.t. 401 (t). he submits that there is no mis declaration on the description of goods and the burden of classification of the items is on the department. he submits that they had already informed vide their letter 25-7-2003 at page 55 of the paper book, that the certificate of origin issued from the chamber of commerce cannot be provided. however, the consignor, m/s map equipments intimated in the invoice itself, the country of origin of the goods as is evident from page 50 of the paper book. the department cannot raise a new issue at this stage. he submits that no notice under rule 10a(2) intimating the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the goods were ever issued to the importer, which is mandatory. he submits that it is incorrect to say that they have not co-operated in the investigation and did not appear in response to the summons issued to them. he submits that they appeared before the officer concerned against the summons issued to the proprietor and gave evidence accordingly. he, therefore, submits that the appeal may kindly be allowed.5. shri mishra, ld. jdr for the respondents submits that there was mis-declaration and wrong classification. the goods were grossly undervalued. the appellants did not produce the manufacturer's invoice for the subject goods and the certificate of origin in proper format.the importer declared fake price and did not give correct particulars of the case. he, therefore, submits that the commissioner of customs has rightly rejected the value declared in the invoice. he also supports the order of the commissioner. therefore, he submits that the appeal may kindly be rejected.6. in the present case, we find that the commissioner has observed in his order that "however, from the database of the directorate of valuation, contemporaneous clearance values of photocopier parts of identical/similar description as found in the subject consignment could not be found", is incorrect. from perusal of the case file, it is clear that datas were available on indian customs edi system-imports, chennai customs house (sea cargo), chennai. the appellants have submitted bill of entry for home consumption dated 21st may, 2003 at page nos. 168, 170, 171, 172 & 173, which contained the details of photo-copier parts imported through chennai customs house, chennai. in the instant case, the consignment was imported vide bill of entry dated 12-5-2003. hence the finding of the commissioner of customs is factually incorrect that "thus in the absence of essential details of contemporaneous imports of identical/similar brands, models and oem etc., it appeared that the value of the subject goods. could not be redetermined under rules 5 or 6 of the said rules." the finding of the commissioner in the impugned order is ex-facie inconsistent and self-contradictory. the commissioner of customs has on the one hand alleged that the quotations are not being used for rejecting the transacted value but on the other hand, he determined the transacted value based on such quotation. para 19 in the impugned order, the commissioner has observed that since the said values more or less tallies with the price list of katun which shows that the method has merit. whereas in the same order, he has observed that the assessment of katun is not relied upon for the rejection of the transacted value; if the price list of katun is not relied upon for rejection of the transacted value, the same cannot be used or determined the value of the imported goods for the assessment of the customs duty. therefore, the finding of the commissioner is inconsistent and self-contradictory. in the present case, the information asked by the adjudicating authority has been supplied by the importer. it is evident from the show-cause notice at para 4 of page 2 of the show cause notice wherein it has been mentioned that the importer by letter dated 15th july, 2003 has furnished brand names of all the items and the makes in which the items were meant to be used required by the department. the importer has not only furnished the brand names and makes, but also other requisite details for determination of the value. in the present case, the adjudicating authority has not issued any notice under rule 10a (2) intimating the importer in writing the grounds for denying the truth and accuracy of the value declared in relation to the goods. in the absence of such notice, the transacted value has to be accepted unless the adjudicating authority has valid reason to reject it. in the present case, no such notice has been given by the adjudicating authority. in view of the above discussions, the matter is required a fresh consideration by the adjudicating authority. we, therefore, set aside the impugned order and remand the matter to the adjudicating authority concerned for de novo adjudication in accordance with law.

Judgment:
1. This appeal has been filed against the Order of the Commissioner of Customs (Port), Kolkata.

2. Brief facts of the case are that acting on intelligence one consignment of photocopier parts imported by M/s Sony Impex, Delhi vide B/E Sl. No. 152755, dated 12-5-2003 was misdeclared and grossly undervalued. The Officers of the Directorate of Revenue Intelligence, Kolkata Zonal Unit, initiated an investigation. During investigation, the examination of the consignment was done by the Officers posted at the Dock in the presence of DRI Officers and CHA of the importer. The statement of Shri Manish Ghelani, Proprietor of the importing firm was also recorded under Section 108 of the Customs Act, 1962. From the Bill of Entry and other import documents, it was seen that relevant details of the imported items viz. brand, make, part number etc. had not been declared. The importer was asked to submit the details as well as "Country of Origin" Certificate from the respective Chambers of Commerce for the subject goods. Manufacturer's invoice was also asked for. The importer submitted a list issued by the supplier of Singapore which showed model wise break up and make of some items. He, however, did not produce the manufacturer's invoice for the subject goods and Certificates of origin in proper format issued by the respective Chambers of Commerce of different countries. Since relevant details of all the items were not made available. A detailed inventory showing brands, makes, part numbers, original equipment manufacturer was, thereafter, prepared by DRI by conducting through investigation of the contents of all the packages imported in the subject consignment. On comparison, the price list of Katun Singapore and the imported goods, the actual values of the subject goods ranged from 4 to 25 times of the declared values. A show cause notice was issued on 3-12-2003. The Commissioner vide his Order dated 19-4-2004, rejected the values shown in the invoice and re-determined the value and confiscated the goods with an option to redeem the goods on payment of fine of Rs. 9,00,000/- and imposed a penalty of Rs. 2,00,000/-.

3. Heard Shri R.K. Chowdhury, ld. Advocate along with Shri B.N. Pal, ld. Advocate both for the appellants and Shri N.K. Mishra, ld. JDR for the respondent.

4. Shri Chowdhury for the appellants submits that they have adduced evidence of the contemporaneous import of identical goods but the Commissioner of Customs rejected the same on the ground that the make was not mentioned in the import document without making any efforts to verify the same by calling upon the records concerning the same. He submits that they have produced the same evidences of previous imports showing the value at which the Department allowed the clearance of the goods. The Department cannot discard the value already accepted by them earlier and the same value declared by us in the present case merely at their sweet will. He further submits that the Commissioner has on the one hand alleged that the quotation are not being used for rejecting the transacted value but on the other hand determine the transacted value based on such quotation. He, therefore, submits that the impugned order, ex-facie, proceeds on surmises and conjecture. He submits that it is well settled in law that mere quotation is not sufficient for the purport of determination of value unless there is no evidence of contemporaneous imports of goods. He relies on the judgment in the case of Kisan Das & Sons v. Commissioner of Customs, Mumbai reported in 1999 (112) E.L.T. 227 (Tri.). He submits that the transacted value cannot be rejected routinely in the absence of evidence of contemporaneous import. He also relies on the decision in the case of Virat Enterprises v. Commissioner of Central Excise, Chennai reported in 2001 (132) E.L.T. 691 (Tri. - Chennai). He submits that the details of the goods were supplied by the appellants which is evident from the invoice at page 50 of the Paper Book. He submits that in the impugned order, the Commissioner of Customs, in the context of classification, has specifically held that the allegation of mis-declaration is not made on the said ground in the show cause notice. Therefore, he submits that so far the above issue is concerned, the mis-declaration of classification made by the Departmental Representative is inconsistent with and de-hore the impugned order. The importer is required to make true and correct declaration of the description of the imported goods and to suggest the Customs Tariff Heading that may applicable and it is the duty of the Assessing Officer to examine the goods and to determine the true and correct tariff classification of the same. He submits that in the impugned order, there is no material to reject the classification suggested by us. ld. Advocate, Shri Chowdhury, relies on the judgment in the case of M/s Asian Rubber Works v. Commissioner of Customs, Ahmedabad reported in 1999 (109) E.L.T. 401 (T). He submits that there is no mis declaration on the description of goods and the burden of classification of the items is on the Department. He submits that they had already informed vide their letter 25-7-2003 at page 55 of the Paper Book, that the Certificate of Origin issued from the Chamber of Commerce cannot be provided. However, the consignor, M/s Map Equipments intimated in the invoice itself, the country of origin of the goods as is evident from page 50 of the paper book. The Department cannot raise a new issue at this stage. He submits that no notice under Rule 10A(2) intimating the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the goods were ever issued to the importer, which is mandatory. He submits that it is incorrect to say that they have not co-operated in the investigation and did not appear in response to the summons issued to them. He submits that they appeared before the officer concerned against the summons issued to the Proprietor and gave evidence accordingly. He, therefore, submits that the appeal may kindly be allowed.

5. Shri Mishra, ld. JDR for the respondents submits that there was mis-declaration and wrong classification. The goods were grossly undervalued. The appellants did not produce the manufacturer's invoice for the subject goods and the Certificate of Origin in proper format.

The importer declared fake price and did not give correct particulars of the case. He, therefore, submits that the Commissioner of Customs has rightly rejected the value declared in the invoice. He also supports the order of the Commissioner. Therefore, he submits that the appeal may kindly be rejected.

6. In the present case, we find that the Commissioner has observed in his order that "However, from the database of the Directorate of Valuation, contemporaneous clearance values of photocopier parts of identical/similar description as found in the subject consignment could not be found", is incorrect. From perusal of the case file, it is clear that datas were available on Indian Customs EDI System-Imports, Chennai Customs House (Sea Cargo), Chennai. The appellants have submitted Bill of Entry for home consumption dated 21st May, 2003 at page Nos. 168, 170, 171, 172 & 173, which contained the details of photo-copier parts imported through Chennai Customs House, Chennai. In the instant case, the consignment was imported vide Bill of Entry dated 12-5-2003. Hence the finding of the Commissioner of Customs is factually incorrect that "thus in the absence of essential details of contemporaneous imports of identical/similar brands, models and OEM etc., it appeared that the value of the subject goods. could not be redetermined under Rules 5 or 6 of the said Rules." The finding of the Commissioner in the impugned order is ex-facie inconsistent and self-contradictory. The Commissioner of Customs has on the one hand alleged that the quotations are not being used for rejecting the transacted value but on the other hand, he determined the transacted value based on such quotation. Para 19 in the impugned order, the Commissioner has observed that since the said values more or less tallies with the price list of Katun which shows that the method has merit. Whereas in the same order, he has observed that the assessment of Katun is not relied upon for the rejection of the transacted value; if the price list of Katun is not relied upon for rejection of the transacted value, the same cannot be used or determined the value of the imported goods for the assessment of the Customs duty. Therefore, the finding of the Commissioner is inconsistent and self-contradictory. In the present case, the information asked by the adjudicating authority has been supplied by the importer. It is evident from the show-cause notice at para 4 of Page 2 of the show cause notice wherein it has been mentioned that the importer by letter dated 15th July, 2003 has furnished brand names of all the items and the makes in which the items were meant to be used required by the Department. The importer has not only furnished the brand names and makes, but also other requisite details for determination of the value. In the present case, the adjudicating authority has not issued any notice under Rule 10A (2) intimating the importer in writing the grounds for denying the truth and accuracy of the value declared in relation to the goods. In the absence of such notice, the transacted value has to be accepted unless the adjudicating authority has valid reason to reject it. In the present case, no such notice has been given by the adjudicating authority. In view of the above discussions, the matter is required a fresh consideration by the adjudicating authority. We, therefore, set aside the impugned order and remand the matter to the adjudicating authority concerned for de novo adjudication in accordance with law.