Custom, Excise & Service Tax Tribunal
Cc, Hyderabad vs M/S. R.R. Enterprises on 19 April, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 06/04/2011
Date of decision:..
Appeal No.C/234/07; C/CO/128/08
(Arising out of Order-in-original No.03/2006-Adjn.-Cus dt. 17/1/2006 passed by CC&CE, Hyderabad)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
CC, Hyderabad
..Appellant(s)
Vs.
M/s. R.R. Enterprises
..Respondent(s)
Appearance Mr. Harish Kumar, SDR for the Revenue.
Mr. B.V. Kumar, Advocate for the respondent.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. P.Karthikeyan, Member(Technical) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is filed by the Revenue against the Order-in-original No.03/2006-Adjn.-Cus dt. 17/1/2006.
2. The relevant facts that arise for consideration are that during the year 1998-2000, the respondent had imported Copper Clad Laminates (CCL) on 14 occasions at ICD/CFS, Hyderabad. A show-cause notice dt. 15/05/2001 was issued to the respondent proposing confiscation of the goods imported under Bill of Entry No.726 dt. 14/11/2000 and demanding differential duty in respect of the goods imported and already cleared under Bills of Entry No.589 dt. 7/10/1999 and No.303 dt. 12/5/2000. During the course of investigation, it was noticed by the officers that the respondent has cleared 10 consignments under various Bills of Entry from 19/8/1998 to 2/12/1999 imported through Hyderabad. On the conclusion of investigation, it was noticed by the officers that the price declared by the respondent-imported needs to be re-assessed as the goods were mis-declared as seconds or rejects while goods which were imported were of prime quality. A show-cause notice dt. 14/8/2003 was issued for rejection of transaction values in respect of 10 consignments mentioned therein and to re-determine the values on the basis of contemporaneous imports and consequently demands, interest and penalty. Respondent contested the show-cause notice on merits as well as on limitation. The respondent sought cross-examination of the people who deposed before the authorities that they had purchased prime quality material from the respondent. After considering the written submission, reply to the show-cause notice and the proceedings before him in cross-examination, adjudicating authority has come to the conclusion that there is no case due to paucity of evidence. Coming to such conclusion, he dropped the proceedings in respect of the ten Bills of Entry. Aggrieved by such an order, Revenue is before us. The assessee/respondent has also filed a cross-objection.
3. The ld. SDR would draw our attention to the various facts of the case. It is his submission that in the instant case, important evidences in favour of the allegation that the goods under reference were of prime quality are in the form of statements given by various buyers who purchased CCL sheets from the respondent. He would draw our attention specifically to a deposition given by one of the buyers i.e. Shri Dhyaneshwar Yadav of M/s. S.B. Marketing, Pune. Ld. SDR would draw our attention to para 7.6 of the show-cause notice wherein the statement given by Shri Dhyaneshwar Yadav has been summarized and submit that he has categorically stated that they had received the goods from the respondent and the details showed in the related invoice with reference to the quality, quantity and value were not correct. It is his submission that on further verification made from the accounts of M/s. S.B. Marketing, it revealed that the respondent received huge amounts during 1998-1999 and 1999-2000 which clearly demonstrates that the goods soled by the respondent were of prime quality. It is his submission that the ld. Commissioner has not considered this evidence properly in his Order-in-Original. It is his submission that the ld. Commissioners order is not a proper speaking order and is fraught with defects of presumption as the Commissioner does not seem to have considered the pricing pattern of the respondent of the final products. It is his submission that as one of the parties to the litigation i.e. the ld. Commissioner should have fully discussed the evidence which were on record. He would submit that statements recorded before the Customs officers needs to be considered as evidence and cannot be easily brushed aside. For this, he would rely upon the judgment of the Honble High Court of Calcutta in the case of CC(Preventive) Vs. Puni Dhapa Lokeswara Rao [2009(248) ELT 141 (Cal.)]. He would also rely upon the judgment of the Honble High Court of Madras in the case of Santhanam Vs. CCE&C, Madurai-2 [1995(79) ELT 564 (Mad.)] and submit that he rely on the case for the proposition that there is a preponderance of probability and Revenue cannot be tied down by strict rules of evidence. He would also draw our attention to the statements of Shri Dhyaneshwar Yadav and submit that impugned order be set aside and the matter may be remanded back to the adjudicating authority to re-consider the issue afresh.
4. Ld. Counsel would submit that the ld. Commissioner in his finding has examined the statements given by the witnesses and the evidence recorded during the course of cross-examination and has come to a conclusion that there is no assertion from any of the evidences that the materials received from the respondents is of prime quality. It is his submission that none of the buyers has stated that the goods purchased by them from the respondent relate to the subject imports made under the cover of 10 Bills of Entry during the period 19/8/1998 to 2/12/1999. It is his submission that the statement of Shri Dhyaneshwar Yadav would clearly show that the payments were made by M/s. S.B. Marketing to the respondent by Demand Draft or by cheque and the amounts were paid on running account basis and not against each invoice and at the end of the year, the accounts were adjusted and settled. It is his submission that in the grounds of appeal, the Revenue has sought direction for remanding the matter with prayer that the Commissioner should have ascertained from the respondent pricing pattern offered by them to their customers for the consignments under dispute and should have recorded the finding is nothing but the adjudicating authority undertaking a new investigation at the adjudication stage to improve the case or to work on the defence in the investigation / show-cause notice which is not permissible under the settled law. For this proposition, he would rely upon the following decisions:-
a. CC, Mumbai Vs. Toyo Engineering India Ltd. [2006(201) ELT 513 (SC)] b. CCE, Bhubaneshwar Vs. Champdany Industries Ltd. [2009(241) ELT 481 (SC)] c. Anaanya Knitting Co. Vs. Jt. Secretary [2007(211) ELT 378 (Mad.)] It is his submission that the authorities have not drawn any samples of the impugned goods at the time of importation whether such goods are prime quality or otherwise. He would also submit that in the respondents own case vide Final Order No.1246 & 1247/2010 dt. 24/9/2010, this Bench has held that as regards the past imports, there cannot be any case for the Revenue and yardstick applied in relation to the live consignment cannot be mechanically extended to the past imports. The cross-objection filed by the assessee is nothing but submissions made in support of the adjudication order.
5. We have considered the submissions made by both sides and perused the records.
6. The issue involved in this case is regarding the re-opening the assessment of 10 Bills of Entry vide which consignments were cleared during the period 19/8/1998 to 2/12/1999. It is undisputed that the said Bills of Entry were finally assessed at the time of clearances from the port. The show-cause notice proceeded on the basis that the imported goods were of the prime quality but were mis-declared as rejects relying upon chiefly on the statements of buyers including that of importer and on the basis of investigation in the past cases of the importer at Hyderabad elsewhere. On perusal of the adjudication order, we find that the adjudicating authority has dropped the proceedings initiated by the said show-cause notice dt. 14/8/2003 by recording the following findings:-
11. First of all, let me consider the statements of buyers. The common averment in all their statements as well as during cross-examination relates to purchase of copper clad laminates in certain cases and semi-finished PCBs. There is no categorical assertion from any of them to sustain the charge that the material supplied to them is of prime quality. There were inconsistencies some stating the goods are FR-2, some stating FR-4; but none of them relatable to these imports. In the case of one buyer namely SB Marketing, on the basis of values raised in the invoice, it was argued that the goods were of prime quality. While this may show a hint of suspicion, it is now well established that suspicion however grave cannot take the place of proof. The alone would not be a conclusive proof to re-determine the value. No samples were drawn and perhaps nor it was possible to draw it too.
12. As regards to the statements of the Importer given during the course of investigation of offences registered at Hyderabad and Mumbai and other documents recovered during the course of such investigation, all this does not relate to the imports involved in these Bills of Entry. I am of the opinion, that even if the Importer is convicted in several past cases, it would be very difficult to generalize and extrapolate that evidence to the present proceedings. I am of the opinion that sufficient evidence was not produced against the importer for rejection of transaction value.
13. As regards to re-determination of values on the basis of contemporaneous imports, I find that these were of prime quality. Further, since the rejection of transaction value itself cannot be sustained due to paucity of evidences, re-determination of value sequentially by proceeding to Rule 6 does not arise.
7. It can be seen from the above reproduced findings that the adjudicating authority has considered the statements as well as the deposition made by the buyers during the cross-examination and came to the conclusion that there is no categorical assertion from any of them to sustain the charge that the materials supplied to them is of prime quality. We find that the Revenue in their grounds of appeal have not adduced any specific contrary evidence to the findings recorded by the ld. Commissioner nor rebutted the findings by leading contrary evidence.. The entire case of the Revenue revolves around such statements recorded from Shri Dhyaneshwar Yadav of M/s. S.B. Marketing. On perusal of the records and specifically the statements of Shri Yadav, we find that though he has stated that he received the goods under the invoices from respondent, stated that the details with reference to quantity and value were not correct. But he has never stated that he has received prime quality CCL.
8. We find that in an identical issue in respect of the very same respondent, vide Final order No.1246-1247/2010 dt. 24/9/2010, this Bench while considering the appeal of the respondent had an occasion to go through the situation wherein the adjudicating authority had extrapolated the value of the live Bill of Entry to the past consignments which were imported by the appellant. The order recorded by this Bench on this issue is reproduced herein below:-
12. As regards past imports covered by Bills of Entry dt. 12/5/2000 and 7/10/1999, we have found no case for the Revenue. It appears that the yardstick applied in relation to the live consignment has been mechanically extended to the past imports. We do not think that the view taken in respect of the live consignment can be extrapolated mindlessly to cover the past imports. We have not found any evidence in support of the findings of misdeclaration of description and value, entered by the Commissioner in relation to the past imports. The only document on the basis of which these findings were entered in relation to the goods covered by Bill of Entry dt. 12/5/2000 is an invoice, copy of which is available at page 93 of paper book Volume-II. The Revenue has considered this document to be an invoice issued by Isola Asia Pacific (Singapore) Inc, to R.R. Enterprises. There is no mention of the name of the consignee / buyer in this document, nor does this document bear any date, nor is it duly signed. The Revenue has heavily relied on this document (so-called invoice) which indicates the name of the goods as Glass Epoxy Copper Clad Laminates and the value of the goods as USD 71,125. Ld. SDR has only reiterated the observations of the Commissioner in relation to this document. But we have found substance in the submissions of the Counsel. This document, with all the said infirmities, can hardly be accepted as a manufacturers or traders invoice. The Revenue has no case that it is international practice to issue a commercial invoice without naming the buyer / consignee. The whole case of the Revenue in respect of the goods covered by Bill of Entry dt. 12/5/2000 is based on this document. On the basis of this document, they alleged that, in the said Bill of Entry, the importer misdeclared the description and value of the goods.
13. ..
14. In the result, in so far as the past imports are concerned, the appeal of the importer has to be allowed. Accordingly, we set aside the decision of the lower authority in so far as its findings and conclusions in relation to the past imports are concerned.
9. We find that the decision of this Bench in the case of Crystal Dot Scan Pvt. Ltd. Vs. CC&CE, Hyderabad-II [2011(263) ELT 401 (Tri. Bang.)] would also squarely apply to the facts of this case. In that case, we find that the value if declared is sought to be rejected and Revenue should establish details of contemporaneous imports of such or similar goods that the price declared is not correct transaction value and value has been determined under CVR. In this case, the Revenue is seeking to reject the transaction value without any valid reasons and in the absence of any details as regards the contemporaneous imports or comparable imports at higher price, we find that the ld. Adjudicating authority has correctly come to the conclusion that the evidence as regards the contemporaneous imports put forth by the officers (of the prime quality) while the Bills of Entry filed for the clearances of consignments during the period 19/8/1998 to 2/12/1999 declared as rejects and wastes. We also find that there is no evidence that the said declaration of description was incorrect or mis-declared as there is no chemical examiners report of the drawn sample, if any. In the absence of any evidence to indicate that the goods which were imported and cleared during the material period were not rejects but were of prime quality, we constrained to hold that the impugned order of the ld. Commissioner is correct and does not require any interference.
10. In view of the foregoing, we reject the appeal filed by the Revenue and since, the cross-objection filed by the assessee is in support of the impugned order and the same is also dismissed.
(Pronounced in court on ..) (P. KARTHIKEYAN) MEMBER (TECHNICAL) (M.V. RAVINDRAN) MEMBER (JUDICIAL) Nr 9