Customs, Excise and Gold Tribunal - Mumbai
Bussa Overseas And Properties P. Ltd. vs Commissioner Of Customs on 4 April, 1997
Equivalent citations: 1997(70)ECR517(TRI.-MUMBAI)
ORDER K.S. Venkataramani, Member (T)
1. These two appeals have been filed against the order dated 21.6.1996 passed by the Commissioner, Central Excise II, Mumbai by which the Commissioner has confirmed the demand of Rs. 2,26,08,2147- in respect of 29 consignments declared as Compounded Alcoholic Preparation imported from U.K. under Section 28(1) of the Customs Act, 1962. He has also imposed a personal penalty of Rs. 2 Crores on appellant M/s. Bussa Overseas and Properties Private Ltd. (BOPP) and another penalty of Rs. 50 lakhs on appellant Shri Bharat K. Bussa, Managing Director of M/s. Bussa Overseas & Properties Pvt. Ltd., under Section 112 (a) of the Customs Act, 1962.
2. M/s. BOPP Ltd., were issued a Show Cause Notice on 7.3.1995 alleging misdeclaration of value of 29 consignments declared as compounded alcoholic preparation imported from M/s. Morrison Bowmore Distillers Ltd. (MBDL), U.K. involving evasion of Customs duty of Rs. 2,26,08,214/-. These consignments were imported during the period May, 1990 to September, 1991 having a combined declared CIF value of Pound Sterling 6,26,233.27 as against the GIF value of Pound Sterling 7,79,977.13. It was further alleged in the show cause notice that appellant Shri Bharat K. Bussa of BOPP has made the differential payment abroad to the suppliers by cheque and cash. The charge was made in the show cause notice of misdeclaration of the value of the consignment under Section 111 (m) of the Customs Act, 1962. The charges in the show cause notice were based on certain enquiries conducted abroad by the department which revealed that the correct unit price for the 29 consignments ranged from Pound Sterling 3.32 per litre to Pound Sterling 3.59 per litre. As against this the invoices presented to the Customs were between Sterling Pounds 2.48 to 3.00 per litre. Secondly, it was found that M/s. MBDL had also raised 4 other invoices viz. invoice dated 27.3.1990 for Pound Sterling 30,000/- dated 28.3.1990 for Pound Sterling 36,000 dated 1.10.1991 for Pound Sterling 75,000/- and dated 8.10.1991 for Pound Sterling 15,000/- together amounting to Pound Sterling 1,56,000/- towards additional selling price of the said consignments imported by M/s. BOPP Ltd. Enquiries further revealed that the payment as above was made by two cheques for Pound Sterling 75,000/- and Pound Sterling 30,000/- and by cash Pound Sterling 36,000/- and Pound Sterling 15,000/- by M/s. BOPP Ltd, to M/s. MBDL in March, 1990 and in October, 1991. The department also found by enquiry that appellant Shri Bharat K. Bussa of M/s. BOPP Ltd. visited the office of M/s. MBDL, Glasgow in March, 1990 and October, 1991 and paid the aforesaid balancing charges through cheque and cash. The department also obtained a letter dated 1.12.1992 written by the Export Services Manager Shri A.M. Ross of M/s. MBDL to Her Majesty's Customs and Excise Investigation Division in Glasgow, enclosing the 4 invoices as above and informing the H.M. Customs & Excise, Glasgow that these invoices represent additional payment made by Bussa for shipment of Malt Whisky to them during 1990-1991. It was further stated in the letter that these payments together with the corresponding Letter of Credit represented the true value of all the whisky supplied during 1990-91. The department therefore took the stand that the correct CIF value of the 29 consignments would then work out to be Pound Sterling 7,79,977.13 as against the declared CIF value of Pound Sterling 6,26,233.27. Investigations were also made from the Indian High Commission in U.K. The Second Secretary (Trade) Shri K.K. Ajwani sent a report dated 13.5.1994 to the Director General, Revenue Intelligence, regarding their results of investigation in this regard. It was stated in the report that the appellant Shri Bharat K. Bussa visited the office of M/s. MBDL in Glasgow and during the visit balancing charges for the whisky were paid using cash and cheque. The report stated that while MBDL could not trace one of the cheques they were able to trace the other cheque which is a Bank Purchase Order for Pound Sterling 75,000/-. A copy of the Purchase Order was also enclosed to the report. It was further reported by the Second Secretary that Mr. Ross, Export Service Manager, MBDL was present at the meeting with Mr. Bharat K. Bussa and that he was prepared to say that he handed over the payment to M/s. MBDL. The report also enclosed therewith the statement containing details of excess payment for consignments and authenticated copy of the statements including extract from the sales ledger of MBDL relating to the recording of the above stated payment.
3. On considering the detailed reply to the show cause notice which was issued not only to the appellants herein but also to the 3 other distilleries in India M/s. McDowell & Co. Ltd., M/s. Carew & Co. Ltd., and M/s. Polychem Ltd., and after hearing the parties in the matter, the Commissioner passed the impugned order as above. The charges against the 3 other noticees were dropped. The Commissioner overruled the defence of the appellants that the 3 other noticees were the principals and that the appellants were only acting as their agent and Letter of Authority holders for effecting the import and that other 3 principals negotiated directly with the foreign suppliers. The contention of the appellants that the contents of the documents obtained from abroad by the department cannot be relied upon unless they were proved was also not accepted by the Commissioner. The Commissioner was also further unconvinced by the defence that there is no proof to show that the appellant Shri Bharat K. Bussa has visited MBDL office on the dates when the additional payments were alleged to have been made. The duty demand and penalty on the appellants was ordered as already stated above in the impugned order of the Commissioner.
4. Shri I.M. Chagla, Senior Counsel, appeared for the appellants along with Id. counsel S/Shri J.D. Dwarkadas, P.O. Ghandy, S.B. Desai. It was argued that the main piece of evidence against the appellants relied upon by the Department is the letter of 1.12.1992 of Mr A.M. Ross, Export Services Manager of the foreign supplier Morrison Bowmore Distillers Ltd. (MBDL) to H.M. Customs & Excise in which it is alleged that their 4 internal invoices mentioned therein represent the additional payments made by the appellant Bharat K. Bussa of appellant Bussa Overseas & Properties Pvt. Ltd. (BOPP). But the Id. Senior Counsel pointed out that, the Commissioner had seriously erred in not proving that document by making its author Mr. Ross available for cross examination by the appellants. That too, when the appellants in their reply to show cause notice had questioned credibility of the documents. It had been pointed out that Shri Bharat Bussa was not even in U.K. on the dates the payments were alleged to have been made. The Id. senior counsel urged that even in quasi-judicial proceedings the adjudicating authority has to base his conclusions on legal evidence. Cross-examination is a part of the principles of natural justice. Opportunity to cross examine a witness deposing against the party charged is an elementary rule of the principles of natural justice, the Id. senior counsel submitted. So when the appellants had disputed the contents of Mr Ross's letter, he should have been made available to speak for that document. The Id. senior counsel urged that Commissioner of Customs is a "Court" within the meaning of the expression occurring in Section 139 of the Customs Act, 1962 for which reliance was placed on Kerala High Court decision in the case of Kallatara Abbas Haji v. Government of India . The Id. senior counsel further argued that the Commissioner had misread the provisions of Section 139 of Customs Act regarding the presumption of truth of documents. A reading of the section as a whole would show that the said section has chosen not to extend the presumption with regard to the truth of the contents of the documents to documents received from a place outside India, as was apparent from the provisions of Section 139(e), which has been totally missed by the Commissioner in his order. Under the provisions of Section 139(ii) the presumption in favour of the department in respect of such documents received from abroad only extends to the signature appearing on such documents. There is no presumption raised, contended the Id. senior counsel, in the section in regard to the truth of contents of such documents which is required to be specifically proved by the department.
5. It was further argued by the Id. senior counsel that although the provisions of the Evidence Act do not apply to departmental proceedings, the principles of natural justice and "fair play in action" do apply, and, as a result, unless opportunity to cross examine is given, document obtained behind appellants' back is inadmissible. Supreme Court judgment in the case of State of Mysore v. Shivabasappa , among others, was cited on this proposition.
6. The senior counsel further contended that the Commissioner erred in holding that the appellants are the owners/importers of the goods. The Commissioner in coming to his conclusion has ignored the fact that the REP licences were admittedly transferred in favour of their principals, who are distillers licensed to manufacture whisky, namely, McDowell, Carew, and Polychem prior to opening of letters of credit in favour of foreign suppliers. The appellants were admittedly holders of letters of authority as provided for in paras 108 (1) and 120(1) of Handbook of Import & Export Procedure. Case law was also cited to say that licence holders are deemed owners of the consignment.
7. The Id. senior counsel urged that the impugned order is not in accordance with the provisions of Section 14 of the Customs Act, 1962, because the Commissioner has accepted the transaction value of the imported goods under Section 14 (IA) of Customs Act despite the fact that the appellants had produced evidence of contemporaneous imports of whisky at values comparable with that declared by the appellants, showing that the prevailing international price was similar or even lower than the invoice value of the goods in question. The department was bound to make enquiries regarding the value declared with other Customs Houses where imports of such goods would have been noticed for which the Tribunal decision in the case of Orient Enterprises v. CCE Cochin to emphasise that the onus of proving undervaluation was always on the department.
8. Even assuming that the documents obtained from abroad were admissible in evidence without being proved, the Id. senior counsel pointed out that there were serious inconsistencies therein making them unreliable. The aggregate amount of additional payment as per show cause notice is 1,56,000 pounds whereas the amount as per enclosures to the letter of Indian High Commission in U.K. comes to 1,53,766 pounds. It is also not realistic to allege that additional payments had been made after the shipments have been completed. It was urged by the Id senior counsel that the Commissioner has not dealt with these inconsistencies pointed out by the appellants. Another discrepancy was that the ledger entry for receipt of one of the alleged balancing payments was on a date prior to the date of the banker's cheque for that amount. It was hence contended that the appellants were not liable to pay the duty demanded and also that the penalty on them was unlawful.
9. Shri K.M. Mondal, the Id SDR arguing for the Revenue pointed out that there has been no breach of principles of natural justice in the adjudication of this case by the Commissioner of Customs. The Id. SDR took us through the various enclosures to the show cause notice which disclose all the materials relied upon by the Department against the appellants including the letters of Mr. Ross and the report of the Second Secretary to the Indian High Commissioner in UK with all its enclosures. The Id. SDR urged that it is very significant that even after being so made aware of such material, the appellants merely presented legal arguments about their admissibility, but never once specifically asked for cross examination of Mr. Ross. Emphasising the principles which govern departmental adjudication as distinct from proceedings in a Court of law, citing case law on the subject, the Id. SDR contended that when all the materials on which department's case is based had been disclosed, and if there had been no specific request for any cross examination, then the party concerned cannot make a grievance of it at the appellate stage. Ld SDR urged that in fact the Hon'ble High Court of Calcutta has in the case of Tapankumar Biswas v. Union of India 1996 (63) ECR 546 held that Section 124 of Customs Act which relates to issue of Show Cause Notice before adjudication, does not envisage the right of cross examination at all and the noticee has only the right of representation against the notice and of a personal hearing.
9. Shri K.M. Mondal, the Id. SDR also argued that the appellant's claim that they were only letters of authority holders for importing the whisky on behalf of the three distillers is on the face of it untenable. He pointed out that the so-called principals in their reply to show cause notice issued by the Commissioner have categorically stated that they had not had any direct negotiation with the foreign supplier for the purchase of the whisky, and that they had only entered into agreement with the appellants for the purchase in India of the goods after import at a composite price. The Id. SDR drew attention to the supplier's letter in this regard to McDowell dt. 31.12.1992 supporting this claim of McDowell that there was no correspondence between them regarding the pricing of the goods. So also Polychem had consistently maintained that this contract was with BOPP and not with the foreign supplier and that they had no role in price negotiation with MBDL. Ld. SDR referred to the statement of Bharat K. Bussa a reading of which brings out that the factum of balancing payment having been made is not denied, but a suggestion is made that it could have been by McDowell, which, it has been shown, is improbable. Ld. SDR urged that Mr. Ross's letter to HM Customs had been obtained from that department in UK through the Indian High Commission and the enclosures to the letter of High Commission's letter are all authenticated, and are hence admissible in evidence, and cannot be brushed aside as hearsay evidence as now argued by the appellants. Reliance was placed in this regard on the Tribunal decision in the case of Collector v. Kewal Kishan Malhotra .
10. The Id. SDR urged that the Department has brought on record sufficient evidence to prove that the value declared for the 29 consignments of whisky concentrate in question had been underdeclared; that there were balancing payments made in UK to the suppliers in cash and by cheque by appellant Bharat K. Bussa. It is well settled, countered the Id. SDR, that in valuation matters like this actual value cannot be proved with mathematical precision as held by the Tribunal in Poonam Plastic Industries v. Collector wherein the Tribunal observed that Customs authorities face difficulties in ascertaining the correct value when the deals are between two parties, the facts are not visible, and the transactions is covered under a veil of secrecy. The Tribunal in that case has followed the ratio of Supreme Court judgement in the case of Collector v. Bhoormul 1983 ELT 1546 : 1985 ECR 2284 (SC) : ECR C Cus 908 SC wherein the Supreme Court held that in such cases in discharging the onus cast on the department due regard should be had to the principle that the Department is not required to prove its case with mathematical precision. El Dorado of absolute proof being unattainable, the law accepts for it probability as a working substitute and all that the law requires, observed the Supreme Court, is the establishment of such a degree of probability that prudent men may, on its basis, believe in the existence of the fact in issue. "Thus legal proof is not necessarily perfect proof," held the Supreme Court, "Often it is nothing more than a prudent men's estimate as to the probabilities of the case." Ld. SDR concluded that in this case the Department has produced direct documentary evidence regarding the balancing payments abroad to show that the imported goods were undervalued, which, when read with the surrounding circumstances of the case, sufficiently and satisfactorily proves the department's case. The demand of duty and the penalty on the appellants is therefore justified, the Id. SDR urged, and needs to be upheld.
11. The submissions made by both sides have been carefully considered. It has been argued at some length citing a large number of case laws that the impugned order is vitiated as it has been passed in violation of principles of natural justice, because the Commissioner of Customs, while relying upon the letter dated 1.12.1992 of Mr. A.M. Ross, Export Service Manager, Morrison Bowmore Distillers Ltd., UK, supplier of the whisky concentrate addressed to Her Majesty's Customs and Excise Department, had failed to prove the genuineness of the contents of the documents, as required under law by producing Mr. Ross for cross examination by the appellants. Only then the legal requirement that the documents should speak for itself will truly be satisfied, it is urged, as in this case the appellants dispute it. Cross examination, it was submitted is part of principles of natural justice being an aspect of fair play in administrative action. Examining these contentions, it is found that a detailed show cause notice Aid. 7.3.1995 has been issued by the Commissioner to the appellants and the three other distilleries. There are 4 annexures to the show cause notice. More importantly, Annexure I is a statement setting out the actual C & F value derived from the true value of each of the 29 consignments in question, Annexure II comprised of Mr. Ross's letter dtd. 1.12.1992 to H.M. Customs and Excise regarding balancing payment for the consignment made by appellant Bharat K. Bussa to the suppliers in U.K. The copies of four invoices referred to in the letter also form part of it. The annexure further comprised of the letter dtd. 13.5.1994 from K.K. Ajwani, Second Secretary (Trade), Indian High Commission of U.K. to the Director General, Revenue Intelligence regarding the result of some of the enquiries made relating to the imports in question. The enclosures to this letter are also annexed to the show cause notice and these are certified true copies of the Ledger entries of the supplier recording the receipt of the balancing payment made; copy of a pay order dtd. 11.10.1991 issued by National West Minister Bank for a part of the balancing payments. Annexure III to the show cause notice contained tine copies of statements of Bharat K. Bussa and other noticees.
12. Clearly the annexures to the show cause notice have set out considerable material relied upon against the appellants and the central piece of the evidence against the appellants is the letter of Mr. Ross dt. 1.12.1992. He has informed H.M, Customs and Excise, Investigation Division with reference to their 4 internal invoices totalling Pounds 1,56,000/- issued in March, 1990 and October, 1991 "represent additional payments made by Bussa for shipment of Malt Whisky to Bussa Overseas and Properties Private Ltd., India, during 1990 and 1991. These payments together with the corresponding Letter of Credit represent the true value of all whiskies shipped during 1990/1991 and that all payments made by Bussa are recorded on the ledger sheet." As has been noted above copies of the related ledger entries with the endorsement, "....we hereby certify that this is a true and exact statement from our sales ledger", signed by the group Accountant of Morrison Bowmore Distillers has also been annexed to the show cause notice. Further, in the report of the Second Secretary Indian High Commission to the DGRI referred to above it has been stated, "The report regarding payments is during March, 1990 and October 1991. Mr. Bharat K. Bussa visited the offices of Morrison Bowmore in Glasgow. During the visits the balancing charges for the whisky were paid by Mr. Bharat Bussa using cash and cheques..." And again it says, "Mr. Ross, Export Services Manager was present at the meeting with Bharat Bussa AND IS PREPARED TO SAY THAT MR. BUSSA HANDED OVER THE PAYMENTS TO MORRISON BOWMORE. There is no correspondence between Morrison Bowmore and Bussa regarding these payments".
(Emphasis supplied)
13. In the face of such material set out in the show cause notice, it is noted that the appellants significantly in their reply thereto did not specifically ask the Commissioner to make Mr. Ross available for them to cross examine. On the other hand, they referred in their reply to provisions of Section 139 of Customs Act regarding presumption as to the truth of documents in certain cases and contended that the truth of the contents of the documents has not been established or proved in accordance with law. They went on to say, that otherwise the documents received from abroad though may be admissible in adjudication proceedings, would be of no probative value except to establish that the document is signed or -is in the handwriting of the person who has signed it.
14. It was contended by them in their reply, ....until and unless the Collector of Customs was satisfied that the truth of the contents of the said documents received/obtained from the Overseas Suppliers was proved, in accordance with law, the Collector of Customs could not have proceeded upon the assumption that the contents thereof were true....
In this case the Commissioner had obviously no reason to doubt the truth of the documents having received them through the Indian High Commission in U.K. who had obtained them from the records of H.M. Customs and Excise Investigation Department. In the Departmental adjudication proceedings the Commissioner as an adjudicating authority need only to disclose the material basis of the charge against the appellants in the show cause notice so as to afford them a reasonable opportunity to put forth their defence . It is therefore essential in such proceedings for the appellants to have specifically asked the Commissioner to produce Mr. Ross for cross examination in order to assail the contents of his letter. Had they done so, the Commissioner would have been bound to either comply with the request or to give reason for not acceding to it. We have noted such procedure being adopted in several cases by the departmental adjudicating authorities. The records do not disclose such a specific plea having been raised during personal hearing or in written submission thereafter.
15. The view expressed above, arising out of the nature of departmental adjudication proceedings, finds support in the observations of the Supreme Court in the case of State of Mysore v. Shivabasappa Shivappa Makapur . Supreme Court observed at Page 377 of the report, For a correct appreciation of the position, it is necessary to repeat what has often been said that tribunals exercising quasi-judicial functions are not Courts and that therefore they are not bound to follow the procedure prescribed for trial of actions in Courts nor are they bound by strict rules of evidence. They can unlike Courts, obtain all information material for the points under enquiry from all sources, and through all channels, without being fettered by rules and procedure, which govern proceedings in court. The only obligation which the law casts on them is that they should not act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain it. What is a fair opportunity must depend on the facts and circumstances of each case but where such an opportunity had been given, the proceedings are not open to attack on the ground that the enquiry was not conducted in accordance with the procedure followed in Courts.
The question as to the contents of the rule of natural justice has been subject of numerous decisions in England and in this country. Dealing with this question Lord Loreburn L.C. observed, in Board of Education v. Rice 191F AC 179 (182) as follows-
In such cases, the Board of Education will have to ascertain the law as also to ascertain the facts. I need not add that in doing either they must act in good faith and fairly listen to both sides, for that is a duty laying upon every one who decides anything. But I do not think they are bound to treat such a question as though it were a trial. They have no power to administer an oath, and need not examine witnesses. They can obtain information in any way they think best, always giving a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view...
16. The Calcutta High Court has further construed Section 124 of the Customs Act, 1962 relating to issue of show cause notice before confiscation etc. in Tapan Kumar Biswas v. Union of India 1996 (63) ECR 546. The High Court held, ...it is well settled by various decisions of the Supreme Court of India that the applicability of the principles of natural justice may vary from case to case, and in some cases, by reason of a statute the principles of natural justice can be excluded. However, as indicated hereinbefore Section 124 of the Customs Act itself provides for the extent of application of the principles of natural justice.
The extent of application, the High Court found was that under Section 124 the noticee has the right to file representation, to inspect documents and an opportunity to be heard. But does not have the right to cross-examine witnesses.
17. As we have noted above, in the present case the appellants did not specifically require production of Mr. Ross for cross-examination at any stage before the Commissioner of Customs despite his letter to H.M Customs enclosed to the show cause notice and as such it is not possible to hold, on the facts and in the circumstances of this case, that the impugned order of the Commissioner has been passed in violation of the principles of natural justice.
18. It has also been argued that the appellants were only acting in their capacity as agents of distillers and letter of authority holders of McDowell, Carew & Co. and Polychem. The distillers themselves had negotiated the price with suppliers Morrison Bowmore Distillers Ltd. and hence it is contended that differential duty is payable by them. These arguments however fail when it is seen that McDowell and Carew & Co. have denied any such direct negotiation of price for the imported whisky with foreign suppliers in their reply to show cause notice which plea has been supported by production of a letter dated 31.12.1992 from Morrison Bowmore Distillers Ltd. to McDowell in which the foreign supplier has stated, with regard to shipments of Scotch Vatted Malt for your use during the period 1990 up to date, we would like to advice you that an examination of our files and records does not reveal any correspondence with yourselves with regard to the price of the product.
19. So also in respect of the import said to be on behalf of Polychem it is significant that the appellants had already placed an order with Morrison Bowmore Distillers Ltd. on 12.12.1990 for 12500 Itrs. at a price not exceeding 4-5 pounds per litre of absolute alcohol, whereas Polychem came into the picture only on 9.1.1991 and that too only for 9500 litres. Another significant feature here is that it has been submitted before the Commissioner on behalf of Polychem so far as the agreement of letter of authority with appellants is concerned, the said appointment is an error in law because letter of authority can be given only by a licensee or a licence holder, which they were not at the material time. Therefore, the argument that the 3 distillers in India are the owners of the imported whisky, and that the differential duty and penalty should be on them, and not on the appellants who only acted as letter of authority holders, is not acceptable.
20. Yet another contention of the appellants is that though the provision of Section 139(ii) of Customs Act will be applicable in respect of the documents received from abroad, but the legal presumption therein will be confined to the correctness of the signature and it cannot extend to presuming the truth of the contents of such document. Examining this contention, and taking up the documents involved, it is seen that there is the letter dated 1.12.1992 of Mr. Ross (which can be presumed to be signed by him) in which he has informed H.M. Customs & Excise Investigation Division with reference to the 4 internal invoices that the amounts therein "represent additional payments made by Bussa of shipment of Malt Whisky to Bussa Overseas & Properties Private Ltd., India during 1990/1991 and that all payments made by Bussa are recorded on the ledger sheet." This averment is supported by extract from the sales ledger of Morrison Bowmore Distillers Ltd. which has been certified as true and exact statement from their sales ledger and signed by the Group Accountant of MBDL, which signature is also to be presumed correct. In this context the report of Second Secretary, Indian High Commissioner in UK to Director General, Revenue Intelligence dated 13.5.1994 has to be seen. It has been stated therein that the appellant Mr. Bharat K. Bussa visited the officers of Morrison Bowmore Distillers Ltd. in Glasgow. During the visits in March, 1990 and October, 1991 the balancing charges for whisky were paid by him using cash and cheques. The report also adds, "Mr. Ross, Export Services Manager was present at the meetings with Bharat Bussa and is prepared to say that Mr. Bussa handed over the payments to Morrison Bowmore." The claim is further probabilised by the fact that the entries in the passport of Shri Bussa show that he did visit UK during March, 1990 and October, 1991 and did visit Morrison Bowmore's office. Moreover, no plausible reason is forthcoming as to why the supplier should name the appellants herein as having made the additional payments from amongst their numerous customers. The appellants have pointed out certain discrepancies in the figures given in the statement annexed to the Show Cause Notice to question their reliability and have also pointed out that it would be commercially imprudent to make any payment after shipments were competed as alleged in the show cause notice. However, it is in such context one has to bear in mind the Tribunal's observation in the case of Poonam Plastic Industries v. Collector of difficulties Customs face in ascertaining the correct value in circumstances where the deals are between two parties, the facts are not visible, and the transaction is covered by a veil of secrecy. The Tribunal applied the ratio of Bhoormal's case to hold that actual value cannot be proved with mathematical precision. The ratio fully applies to the present case.
21. There is thus satisfaction/ evidence on record to show that the value declared in the relevant invoices for the 29 consignments in question did not reflect the true value and that additional amount paid in UK by cash and cheques have to be added to arrive at the price paid for the goods. When once this is the position, the invoice value has to be discarded under Section 14(1) of the Customs Act as the price reflected in the invoice did not show the total payment made for the goods. Since additional payments had been made, the price shown in the invoice was not the sole consideration for the sale, Section 14(1A) will then have to be invoked.
22. The declaration in small print certifying correctness of the price in the invoices has rightly been ignored by Commissioner in view of the admission subsequently by the very person who signed that declaration in the invoice (Mr. Ross) before H.M. Customs that those prices did not represent the true value.
23. The additional payments made have also to be added to the transaction value in terms of Rule 9 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 which says that in determining the transaction value there shall be added to the price actually paid or payable for the imported goods, all other payments actually made as a condition of sale of imported goods by the buyer to the seller to the extent that such payments are not included in the price actually paid or payable.
24. The appellants have also relied upon certain invoices relating to some other imports to say that the value declared by them for the goods was comparable to that prevalent at that time for the goods in international trade and as such should have been accepted as assessable value under Section 14 of Customs Act. The Commissioner however has held that since in this case in view of the evidence collected indicating actual transaction value for the goods, the need for comparison with the price declared for contemporaneous imports did not arise. Transaction value of imported goods according to Rule 4 of Valuation Rules, 1988, shall be the price actually paid or payable for the goods when sold for export to India adjusted in accordance with provisions of Rule 9 of these Rules. As already noted above, Rule 9 lays down that in determining transaction value there shall be added to the price actually paid or payable for the imported goods all other payments actually made as a condition of the sale of the imported goods. In the present case in the face of evidence of such additional payments which, according to the supplier, constituted the true value of the goods along with payments made by letter of credit, these have necessarily to be added and assessable value has to be redetermined accordingly. This is what in effect the Commissioner has ordered, which is hence sustainable,
25. Even otherwise, a perusal of the invoices relied upon by the appellants in this regard also shows that the goods therein by description do not appear to be the same, as in some cases the goods in those invoices are overproof Malt Whisky concentrates whereas here goods are underproof; the age of the whisky is not given in the invoices for comparison; and the country of origin of some of the compared imports is shown as Netherlands and not UK as in the present case. Therefore, the contention of the appellants in this regard is untenable.
26. There is thus sufficient material to hold that the value of the Whisky concentrate imported in the 29 consignments in question had been underdeclared, and the differential duty of Rs. 2,26,08,2141- has rightly been demanded from appellants BOPP under Section 28(1) of the Customs Act, 1962. Evidence on record also indicates that appellant Bharat K. Bussa had a pivotal role to play in actually arranging for and making the balancing payment to Morrison Bowmore Distillers Ltd. in UK by cash and by Cheques. Hence personal penalty on M/s. BOPP and on Shri Bharat K. Bussa is justified. As regards the level of penalty, having regard to the quantum of Rs. 2.00 crores penalty imposed on M/s. BOPP vis-avis the amount of differential duty demanded, a lesser penalty on appellant Bharat K. Bussa will, in our view, meet the ends of justice. The penalty on him is therefore reduced from Rs. 50.00 lacs to Rs. 25.00 lacs (Rupees Twenty Five Lacs only).
27. The impugned order of the Commissioner is upheld, except for the modification in the quantum of personal penalty on appellant Bharat K. Bussa as set out above.
28. The appeals are disposed of in the above terms.