Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (I), Nhava ... vs Angel Overseas Pvt. Ltd on 10 November, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL Nos. E/811 to 816/02 (Arising out of Order-in-Original CAO No.162/2001/CAC/CC/BD dated 1.6.2001 passed by Commissioner of Customs (Adjudication), Mumbai-1) For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) and Honble Mr. S.K. Gaule, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Commissioner of Customs (I), Nhava Sheva Appellant Vs.
1. Angel Overseas Pvt. Ltd. Respondent
2. Standard Industries Ltd.
3. Shree International Trading Co.
4. Progressive Petroleum Co.
5. Sri Narayan Baheti
6. Solar Tradelinks Pvt. Ltd.
Appearance:
Shri V.K. Singh, Authorised Representative (SDR), for appellant Shri A.K. Chatterjee, Advocate, for respondents at sr nos.1, 5 & 6 None for others CORAM:
Honble Mr. P.G. Chacko, Member (Judicial) and Honble Mr. S.K. Gaule, Member (Technical) Date of Hearing: 10.11.2010 Date of Decision: 10.11.2010 ORDER NO Per: P.G. Chacko These appeals of the department are directed against the Commissioners order wherein the value of the goods declared by many of the importers was accepted and, even while rejecting the value declared by another importer, the adjudicating authority refrained from imposing redemption fine in lieu of confiscation of the goods and imposing penalty on the importer. There is no representation for the respondents in appeals C/812-814/02 despite notice, nor any request of theirs for adjournment. The respondents in appeals C/811, 815 & 816/02 are represented by counsel. The appellant is represented by the SDR. We proceed to take up all the appeals for final disposal. The respondents except Sri Narayan Baheti are the importers who filed bills of entry for clearance of furnace oil imported from Dubai in the month of February 2000. M/s. Standard Industries Ltd. declared the value of the goods as US$ 144.4 per MT while others declared the value as US$ 141.5 per MT in the respective bills of entry. After investigations into the imports, the DRI issued a show-cause notice to the importers and others, alleging that the assessable value of the goods had been misdeclared with intent to evade payment of appropriate duty of Customs and that the goods were liable to confiscation on the ground of misdeclaration of value and that the importers were liable to be penalised for such misdeclaration. The show-cause notice proposed to enhance the value of the goods on the basis of average PLATT price and certain contemporaneous imports of identical goods. The allegations and proposals were contested. In adjudication of the dispute, the learned Commissioner held that the value declared by M/s. Standard Industries Ltd. was not acceptable. The value was enhanced to US$ 151.495 per MT on the basis of average PLATT price. On this basis, the learned Commissioner directed that the duty recoverable from M/s. Standard Industries Ltd. be requantified. The learned Commissioner, however, refrained from imposing fine or penalty on this company. In the relevant appeal, the department has prayed for imposition of fine and penalty.
2. In respect of other importers, viz. Angel Overseas Pvt. Ltd., Shree International Trading Co., Progressive Petroleum Co. and Solar Tradelinks Pvt. Ltd., the learned Commissioner considered the relevant instruments of contract produced by the parties and accepted the price of the goods agreed between the importers and their suppliers, as the basis of determination of assessable value. In other words, the declared value was accepted. In the remaining appeals, the department has challenged this part of the Commissioners order on a few grounds. The learned SDR has reiterated the grounds of the appeals.
3. The learned counsel has raised a preliminary objection by submitting that the department chose not to file appeal against the Commissioners decision vis-`-vis many other importers, even though the review order purportedly required appeals to be filed as against all importers. According to the learned counsel, the present proceedings are vitiated by this discriminatory attitude. We hold that, in these appeals, the department has challenged the Commissioners decision vis-`-vis the respondents and, therefore, it is open to the respondents to meet the challenge. This is not the forum to challenge the Commissioners order on the ground of discrimination.
4. The learned counsel has also argued in support of the Commissioners decision in so far as the respondents in appeals C/811, 815 & 816/02 are concerned. We have given careful consideration to the submissions of both sides.
5. The learned SDR has filed a compilation of documents including invoices, bills of lading, copies of cargo receipts, copies of certificates of origin, copies of contracts and copies of statements of the master of the vessel. He has also made a mention of certain dates which, according to him, are crucial to a determination of this case. The dates of issue of bills of lading and invoices, which were filed with the relevant bills of entry, have been mentioned by the SDR and the same are noted below against the names of the importers:-
Sr.No. Name of the importer Description & quantity of goods Name of the supplier B.L.No. & date Loading date Invoice no. & date
1.
Solar Tradelinks Pvt. Ltd.
Furnace oil, 6600 MT Nishant Import & Export Co. LLC, UAE 1001 to 1018 11.2.2000 11.2.2000 NIE/110 to 114, 117 & 118/2000 dt. 16.2.00
2. Angel Overseas Pvt. Ltd.
Furnace oil, 1400 MT Nishant Import & Export Co. LLC, UAE 1020 to 1025 11.2.2000 11.2.2000 NIE/119,120/2000 dated 16.2.00
3. Progressive Petroleum Co. Ltd.
Furnace oil, 3000 MT Nishant Import & Export Co. LLC, UAE 1028 11.2.2000 11.2.2000 NIE/121/2000 dated 16.2.00
4. Standard Ind. Ltd.
Furnace oil, 2500 MT Nishant Import & Export Co. LLC, UAE 1029 11.2.2000 11.2.2000 NIE/115/2000 dated 11.2.00
5. Shree International Trading Co.
Furnace oil, 10000 MT G. Premjee Trading Co. Pvt.Ltd., Singapore 1030 9.2.2000 9.2.2000 GT/108/2000 dated 9.2.00 It is submitted that, in the case of Shree International Trading Co., the bill of lading was issued on 9.2.2000, but the Documentary Credit was shown therein to be issued on 15.2.2000, which is improbable (document at page 143 of the compilation). In respect of the same importer, it is further submitted that, though the invoice and insurance certificate were shown to have been issued on 9.2.2000, certain express provisions of the insurance certificate indicated that the terms and conditions of insurance were as per quotation dated 16.2.2000, which also is improbable (documents at pages 142 and 144 of compilation). In respect of Progressive Petroleum Co. Ltd., the learned SDR has referred to the document at page 121 of his compilation, which is a copy of a Documentary Credit/Letter of Credit. It is submitted that this DC/LC was opened on 16.2.2000, but the bill of lading was issued earlier on 11.2.2000, which again is improbable. Our attention has also been invited to the document at page 118 of the SDRs compilation, which is a copy of the contract between the supplier (M/s. Nishant Import & Export Co., LLC, Dubai) and Progressive Petroleum Co. Ltd. (importer). It is pointed out that this contract was concluded on 14.2.2000 as indicated in the document, but the bill of lading (at page 95) is dated 11.2.2000, the invoice (at page 69) is dated 16.2.2000 and the Letter of Credit (at page 121) is dated 17.2.2000. The point sought to be made by the SDR is that the date shown as the date of issue of bill of lading (11.2.2000) is unacceptable inasmuch as the contract was concluded, the invoice was issued and the LC reopened much later. In this manner, the learned SDR has made an endeavour to show that the date of issue of the bills of lading produced by the importers can only be considered to be manipulated. According to him, the supplier of the goods had manipulated the date to help the importers declare a lesser price for the goods for evading Customs duty. The learned SDR has, in this manner, invited our attention to many of the documents in the compilation and has argued that the bills of lading produced by the importers are liable to be treated as manipulated. Reiterating the averments in the memo of appeals, the learned SDR submits that no copy of any contract was placed before the DRI by any of the importers. Therefore, according to him, it was not open to the learned Commissioner to accept the contractual price as the basis of valuation of the goods. It is submitted that, as per the international trade practice pertaining to furnace oil, the learned Commissioner ought to have determined the value of the goods on the basis of the average PLATT price for five days (two days prior to and two days after the date of shipment) as proposed in the show-cause notice.
6. In respect of M/s. Standard Industries Ltd., it is submitted that, once misdeclaration of value was found, the importer should have been held liable for a penalty under Section 112 of the Customs Act and also redemption fine should have been imposed on them in lieu of confiscation of the goods, under Section 125 of the Act.
7. The learned counsel submits that all the respondents, barring Shree International Trading Co., had in fact filed the instruments of contract of sale with the DRI. It is submitted that the learned Commissioner accepted the transaction value after considering these documents. There was no valid ground to reject the transaction value under Section 14 of the Customs Act, nor has the appellant brought out any good ground against such value. The learned counsel submits that, in all the contracts, a fixed price was agreed to between the importer and the supplier. The learned counsel, therefore, prays for sustaining the Commissioners order.
8. We note that, in respect of M/s. Standard Industries Ltd., the learned Commissioner rejected the declared value and determined the assessable value of the goods on the basis of contemporaneous import value, which was US$ 154.198 declared by one M/s. Coastal Wartsilla in respect of furnace oil imported in February 2000. The learned Commissioner preferred this contemporaneous import value to the PLATT price proposed in the show-cause notice. Accordingly, it was directed that the amount of duty to be paid by M/s. Standard Industries Ltd., to be requantified. We find that this part of the Commissioners order has been accepted by the department. The learned SDR has contended that the above valuation was accepted in the absence of documentary evidence of an agreed price between the above company and their supplier. It has been submitted that the situation is different for the other importers who had agreed on a fixed price with their suppliers. We note that, in respect of the other importers, the learned Commissioner preferred to accept the transaction value in preference to the PLATT price proposed in the show-cause notice. In the case of M/s. Standard Industries Ltd., it was observed by the Commissioner that there was considerable controversy regarding manipulation of bill of lading date. From the submissions of the learned SDR, we have found that this very controversy existed in respect of other importers also. If that be the case, the Commissioners observations about the PLATT price in relation to the goods imported by M/s. Standard Industries Ltd. should hold good in relation to other importers also. Further, we note that, in these appeals, the Revenue has not assailed the contracts. It is not the case of the appellant that no contract of sale was concluded between the importers and the suppliers. Nevertheless, it is contended that the average of five days PLATT prices with reference to date of bill of lading should be the basis for determination of assessable value of the goods. We have not found any valid ground against the acceptance of the contractual price (declared price) under Section 14 of the Customs Act. The declared price cannot be rejected except on any of the grounds particularized under Rule 4(2) of the Customs Valuation Rules. We have not found any such ground having been stated in these appeals. We are, therefore, inclined to accept the value determined by the Commissioner in respect of the respondents in appeals C/811, 813, 814 & 816/02. The value determined by the Commissioner in respect of M/s. Standard Industries Ltd. (C/812/02) is not challenged and the same also is sustainable.
9. In appeal C/815/02, the appellant wants a penalty to be imposed on the respondent, Shri Sri Narayan Baheti. We have already found the valuation of the goods to be in order. There is no question of confiscation or penalty in respect of any of the respondents including M/s. Standard Industries Ltd., respondent in appeal C/812/02. The Revenue, in this appeal, has prayed for imposition of fine and penalty on M/s. Standard Industries Ltd. This prayer is on the ground that the value declared by the said company was rejected and hence the company should be held to have misdeclared the value with intent to evade payment of appropriate duty. We find that the show-cause notice alleged that M/s. Standard Industries Ltd. along with others misdeclared the value of the goods so as to evade Customs duty. It was alleged that the dates of bills of lading were misdeclared thereby rendering the goods liable to confiscation under Section 111(m) of the Customs Act. The adjudicating authority did not record any finding of misdeclaration of value as against M/s. Standard Industries Ltd. and the appellant has not raised any ground against this. In the circumstances, the plea for imposing a fine in lieu of confiscation of the goods cannot be granted. Needless to say that the prayer for imposing penalty on the above company is also not liable to be allowed.
10. In the result, all the appeals are dismissed.
(Pronounced in Court) (S.K. Gaule) Member (Technical) (P.G. Chacko) Member (Judicial) tvu 1 2