Customs, Excise and Gold Tribunal - Delhi
Uma Sons vs Collector Of Customs on 18 September, 1996
Equivalent citations: 1996(88)ELT540(TRI-DEL)
ORDER
U.L. Bhat, J. (President)
1. This appeal is directed against the Order-in-Original dated 27-11-1991 passed by the Additional Collector of Customs, Calcutta.
2. The appellant imported 50 Cartons of Zip in Coil No. 5 (Black and Brown) of Taiwan origin from a supplier in Taiwan. The 50 Cartons contained one lakh yards of Zip in Coil. The Clearing Agent of the Appellant submitted Bill of Entry dated 3-5-1990 and other import documents declaring CIF value as US $ 5.70 per hundred yards. The Additional Collector issued show cause notice suggesting valuation of US $ 7.50 per hundred yards CIF i.e., Rs. 1,27,659.57 for one lakh yards. Three REP licences produced covered Rs. 97,021.00. Thus it was alleged there was shortfall in licence. Notice also proposed confiscation under Section 111(d) of the Customs Act, 1962 (for short, the Act) and penal action under Section 112 of the Act. The appellant resisted the notice. The Additional Collector passed the impugned order determining value at US $ 6.65 per hundred yards and since there was shortfall in licence, confiscating the goods valued at Rs. 16,170.00 (being the amount of shortfall) and imposing penalty of Rs. 8000.00. This order is now challenged.
3. The import documents described the goods as follows :-
Invoice dated 21-2-1990 TAPE No. 5 (Zip/IN/COIL) - 1 Lakh
Yards (US $ 5.70 per 100 Yards)
Bill of Entry dated 3-5-1990 ZIP IN COIL No. 5 S.F. -1 Lakh Yards
(US $ 5.70 per 100 Yards)
Packing List Copy not produced in appeal
Contract or order Copy not produced in appeal
Confirmation Copy not produced in appeal
Correspondence, if any Copy not produced in appeal
Letter of Credit Copy not produced in appeal.
4. The show cause notice referred to four other imports for the purposes of comparison. The particulars of the imports were as follows :-
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Date of Country Description CIF value Quantity in
Invoice of Origin in US $ per Yards
100 Yards
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2-12-1986 Taiwan POLYESTER ZIPPER NO. 5 6.65 50,000
BOMBAY
24-10-1988 Ditto NYLON ZIPPER NO. 5 6.65 50,000
CALCUTA
24-2-1989 -Ditto- NYLON ZIPPER NO. 5 6.65
CALCUTA LONG CHAIN
19-1-1990 -Ditto- No. 5 RT 7 ZIPPER CHAIN 7.50 75,000
WITH CORD ALONG
WITH 50000 YARDS OF
OTHER VARIETY OF
ZIPPER CHAIN AND
38,000 PIECES OF LONG
PULLER
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Though the show cause notice suggested the rate of US $ 7.50 as found in the invoice dated 19-1-1990, the impugned order adopted rate of US $ 6.65 as found in the other three invoices.
5. Learned Counsel for the Appellant urged the following contentions :-
(a) The goods imported by the Appellant were not identical or similar to goods covered by the four invoices relied on by the Department and the compared imports were not contemporaneous and hence prices in those invoices could not be adopted.
(b) The Additional Collector was in error in ignoring the evidence of three other imports produced by the Appellant.
(c) In the light of (a) and (b) and in the absence of evidence of flow of additional consideration, the transaction value should have been accepted.
(d) The enhanced value could not have been debited against licences produced.
(e) Since the goods were not available for confiscation, confiscation could not have been ordered.
6. Point (a). The imported goods were "Zip in Coil No. 5 SF" as shown in the Bill of Entry but the Appellants 'Invoice' describes the goods as "Zip in Coil No. 5". Bill of Entry must have been prepared by the Appellant or the Appellants agent. The basis on which the description in the Bill of Entry was given has not been disclosed. Copies of other documents such as Packing List, Contract, Confirmation and Correspondence have not been produced before us. Therefore, we can only go by the description in the invoice of the supplier. The invoice does not indicate if the Zip in Coil is polyester or Nylon. The compared invoices cover Polyester and Nylon Zip in Coil. Invoice dated 2-12-1986 relates to Polyester Zip in Coil No. 5 and 50,000 yards imported were valued at US $ 6.65 per 100 yards GIF. Invoices dated 24-10-1988 and 24-2-1989 each relating to 50,000 yards of Nylon Zip in Coil No. 5 declared the same value. So it is clear that Polyester and Nylon Zip in Coils were not different in value. The invoice dated 19-1-1990 relating to 75,000 yards of Zipper Chain with Cord declares value at US $ 7.50 per 100 yards CIF. There is no case for the appellant that Zipper Chain with Cord is different from Zip in Coil. The number assigned, namely, No. 5 RT 7 is different from the number shown in the Appellants invoice. Learned Counsel for the Appellant has placed before us a printed brochure relating to "YKK Sliders". Pages 26 to 53 of the brochure refer to slider for Coil Zippers. The sliders have different notations such as 2SL, 1CF, 2CF, 2CE, 2FF(25CF), 3CF, 45CF and 5CF. But the notations relate not to Zip in Coil, but to sliders of Zip in Coils and therefore cannot have much significance. The documents relied on by the Appellant refer to goods covered thereunder as Zip in Coil No. 3 and Zip in Coil No. 5. A Bill of Entry produced by the Appellant contains the description "Zip in Coils NO CF" added in ink and the addition in ink is not initialled or certified. It is thus clear that ordinary Zip in Coils are described as "No. 3" or "No. 5" or by other appropriate numbers. It is true, as pointed out by the Appellant, the particular design of the imported goods and goods relating to compared imports is known. But there is nothing to indicate that price varies according to the design. So also about the weight, since there is nothing to indicate that price varies according to weight. The appellate order in another case produced by the appellant (at page 76 of the Paper Book) shows that Zip in Coil No. 5 is more expensive than Zip in Coil No. 3, which indicates that the price varies with the "number" of the Zip in coil and not on any other factor
7. The four invoices relied on by the Department bear dates 38th months, 16 months, 12 months and one month before the subject invoice. The difference in time between 2-12-1986 and 24-2-1989 had no effect on the prices as seen from the fact that price remained steady during the period and there was increase in price during next eleven months. The four invoices related to Zip in Coil bearing No. 5. The Additional Collector had adopted the lower of the two prices. The contention that the subject goods were not identical or even similar to the goods covered by the relied on invoices is not sound. The aspect of contemporaneity loses significance in view of steady nature of the price during the earlier period and the fact that by January, 1990 there was price increase. Point answered against the Appellant.
8. Point (b) It is contended that the Additional Collector ignored the documents produced by the Appellant. The particulars of the imports dealt with in the three documents are as follows :-
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Document Nature of goods Declared Value Remarks
and quantity
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Order-in-Ap- Zip in Coil No.3 US $ 3.55 and Assistant Collector
peal No. and Zip in Coil 5.50 per 100 enhanced to US $ 3.55 and
663/90, dated No. 5 Total 1 yards respe- 6.65 respectively. The
16-4-1990 aga- Lakh goods of ctively. Order latter was based on two
inst Order-in- Taiwan origin. does not imports of October and
Original dated indicate if November, 1989 of
21-12-1989 value was FOB 1,00,000 yards and 40,000
(Date of import or CIF. yards. This was set aside
not indicated) mainly on the ground that
quantity imported by the
importers in the case was
very much lower than the
quantities imported in the
compared cases.
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Invoice dated Zip in Coil No. 5 US $ 5.50 per This is stated to be a test
23-4-1990 2000 yards 100 yards FOB. import made at the
Taiwan origin Freight US $ Appellant's instance to
0.90 for 100 obtain document showing
yards. CF value.
value US $ 6.40
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Bill of Entry Zip in Coil US $ 5.70 per The document is typed
dated 26-2-1990 Taiwan Origin 2 100 Yards. but "No. 5 CF" written in
lakh yards. ink without initial or
certification. Left side
bottom part is not copied.
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The first document cannot be relied upon because the name and address of the appellant and the name of the supplier are deliberately blocked out. The imports relied on by the Assistant Collector in that case in October and November 1989 were at US $ 6.65 per 100 yards. The appellate authority interfered mainly on the ground that the subject import was of 10 lakh yards and the compared imports were of comparatively smaller quantities of 1 lakh and 40,000 yards. The difference in value was about 17 per cent and obviously that would be legitimate quantity discount for a large quantity of 10 lakh yards which was ten and 25 times the quantities covered by the compared imports. This document, far from militating against the value determined in the case at hand, actually supports it. Regarding the second document, we asked the Learned Counsel why an import could have been made of a small quantity of 2000 yards, and he stated that an order was deliberately placed at the Appellants' instance to secure evidence regarding value during the pendency of the adjudication proceedings in this case. Even according to the document, the C&F value was US $ 6.40 per 100 yards. The third document, photocopy of a Bill of Entry is suspicious since it contains a few insertions in ink and the entries in bottom left side are not copied and instead something else is copied. There is some manipulation in the document.
9. Learned Counsel on the basis of written submission made before the Additional Collector stated that in another case the value of Zip in Coil was increased from US $ 2.28 per 100 yards to US $ 5.97 per 100 yards and the appeal against such enhancement was allowed by the Tribunal in their order reported in 1991 (52) E.L.T. 413 (Tribunal). The subject import in this case was of 60 lakhs yards and the country of origin could not be determined. It was therefore held that the subject import of huge quantity could not be compared with imports of comparatively very small quantities of goods whose country of origin could not be ascertained. The enhancement of value was set aside on the above ground and since there was no contemporaneous imports of identical or similar goods and no evidence of remittance of additional consideration. This decision cannot help the present Appellant since the facts of the present case are entirely different. Hence the documents and materials relied on by the Appellant cannot be relied upon to interfere with the impugned order.
10. Point (c). Learned Counsel for the Appellant contended that the invoices relied by the Additional Collector did not relate to identical or similar goods or contemporary imports, but the materials produced by the Appellant could be safely relied upon and since there was no allegation or proof of flow of additional consideration from the Appellant to the supplier the transaction value should have been accepted. We have already indicated that there was no error in relying on the three invoices and the materials produced by the Appellant can be of no assistance to the Appellant. It is true that there was no case of flow of additional consideration, which is a relevant circumstance. But this circumstance has to be taken along with other circumstances in the case. The invoices relied on by the Department show that price of Zip in Coil No. 5 of Taiwan origin was steady at US $ 6.65 CIF per 100 yards in 1986,1988 and 1989 and in early 1990, it went upto US $ 7.50 CIF per 100 yards. The Appellate Collector's order produced by the appellant shows that on an order for the large quantity of 10 lakh yards, the price was US$ 5.50 per 100 yards though it is not clear if the price was FOB or CIF. The test invoice of April, 1990 obtained by the Appellant shows price to be US $ 5.50 per 100 yards FOB or US $ 6.40 per 100 yards GIF, though the document cannot have much evidentiary value. These materials indicate a fairly consistent and stable pattern of price in International trade. In the face of this significant price pattern, the Appellant has a duty to explain for what reason and under what background the supplier charged only US $ 5.70 GIF per 100 yards and how the lower price could be accepted as the ordinary price in International trade for like goods at about the time of import. Appellant did not make available to us copies of Contract or order, Confirmation, Letter of Credit or previous correspondence. In these circumstances, even in the absence of specific case or evidence of flow of additional consideration, there was ample justification to reject the transaction value and determine the assessable value on the basis of other relevant and acceptable materials. The Additional Collector has done so.
11. Points (d) and (e). In the circumstances, we agree with the Appellant that the declared CIF value and not assessed CIF value should be debited against the licences. If that be done, the licenses produced would cover the import and there would be no shortfall. Hence confiscation under Section lll(d) of the Act and fixation of redemption fine was not sustainable, even assuming that the goods were available for confiscation.
12. In the result, we confirm the value assessed by the Additional Collector of Customs, but set aside the confiscation ordered and redemption fine fixed by him. The appeal is disposed of accordingly.