Custom, Excise & Service Tax Tribunal
Goa vs John Miranda on 9 September, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/450/2011
APPLICATIONNO: C/Stay-1252/2011
[Arising out of Order-in-Appeal No: GOA/Cus/GSK/20-21/2011 dated 11/04/2011 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Goa.]
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri P.R. Chandrasekharan, 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Commissioner of Central Excise & Customs
Goa
Appellant
Vs
John Miranda
Respondent
Appearance:
Shri V.K. Singh, Authorised Representative for the appellant Shri S.S. Sekhon, Advocate for the respondent CORAM:
Honble Shri Ashok Jindal, Member (Judicial) Honble Shri P.R. Chandrasekharan, Member (Technical) Date of decision: 09/09/2011 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
The appeal and stay application are directed against the Order-in-Appeal No: GOA/Cus/GSK/20-21/2011 dated 11/04/2011 passed by the Commissioner of Customs (Appeals), Goa.
2. The facts of this case are as follows:
2.1. M/s. Peace International imported 6100 pieces of metal cabinet fitted with PCB CDM, screws and hardware for car CD player without any model/brand and declared the unit price for the said metal cabinet at US $ 6.65 vide Bill of Entry No.113624 dated 31/08/2009. The goods were imported from Singapore and the supplier was M/s. Simoniz Trading Imports & Exports, Singapore. The Country of Origin of goods was declared as China and proforma invoice No. 0488 dated 04/08/2009 and packing list No. 6080 dated 18/08/2009 were also submitted along with the Bill of Entry.
2.2. The department had intelligence that Sony brand metal cabinet fitted with PCB CDM, screws and hardwares for car CD player was being imported by misdeclaring the same as unbranded goods and declaring a low value with an intent to evade payment of duty by the importer M/s. Peace International. Accordingly, a detailed examination of the subject goods was undertaken and examination revealed as follows:
(i) the metal cabinet (chassis) was found to have number 4-4-3-870 on the inner side;
(ii) it was fitted with PCB assembled and having printed marking on the PCB card which read as Sony PWB Main 1-87-690-21A (13060113) and the PCB card was assembled with various other components (active and passive);
(iii) that CDM consisted of PCB card assembled with various components and having marking which read as Sony MG 101S/101Y SER No. 1-878-172-11 (173029011) and the PCB had two ICs on the front side and one of the ICs had the marking as Made in Japan. There was one IC of Toshiba made, which was mounted on the bottom side;
(iv) the set was fitted with a motor with markings as made in China 2.3. Expert opinion from two technical experts one Shri Prashant Mohan Deshpande and another Shri S. Srinivasan, Regional Service Manager of Sony India Limited were obtained and both these experts opined that the sample shown to them was having Sony brands/assemblies and hence it was a Sony product. It was further confirmed by Sony India that the product under importation would cost a minimum of 60% of the total cost of the complete set and the value of importation of complete set was Rs. 2,914.87 and 60% thereof worked out to Rs. 1,749/-.
2.4. On this basis, the value of the goods under importation was arrived at Rs. 1,06,68,900/- and the duty thereon worked out to Rs. 26,05,490/-. Accordingly, show cause notice was issued to the importer proposing to assess the goods at Rs. 1,06,68,900/- demanding duty of Rs, 26,05,490/-, proposing to confiscate the goods under Section 111(m) of the Customs Act, 1962 read with Rule 11 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007, and also proposing to impose penalties under Section 112(a) and also under Section 114(a) of the Customs Act, 1962.
2.5. The appellant contested the notice and submitted that what they have imported is only unbranded black body of the car CD player and merely because some parts are bearing the Sony mark, it does not mean that the goods are of Sony brand. During the cross-examination of the technical experts it was found that Shri Prashant Mohan Deshpande had no experience or expertise on car audio CD player which he had admitted during the cross-examination. As regards Shri Srinivasan, the Regional Service Manager of Sony India, who was the other person whose expert opinion was obtained, Shri Srinivasan admitted that he did not know whether the model Nos. CDS-GT-280S and CDX-GT-480US, which were alleged to be the models of the car CD player under import were manufactured by Sony or not and it was found that the testimony of Shri Srinivasan was not credible. The appellant in his reply to the show cause notice had furnished details of imports of similar goods on the basis of the NIDB data, and from these data it was seen that similar products of Sony brand had been imported at prices ranging from US $ 8.00 to US $ 8.35 for quantity ranging from 304 to 320.
2.6. The adjudicating authority based on the testimony of the experts enhanced value of the goods under importation and confirmed the duty demand as proposed in the show cause notice. He confiscated the goods under Section 111(m) of the Customs Act, 1962 with an option to redeem the same on payment of a fine of Rs. 8 lakhs under Section125 of the Customs Act, 1962. He also imposed a penalty of Rs. 5 lakhs under Section 112(a) of the Customs Act, 1962 on Shri John Miranda, proprietor of Peace International and a further penalty of Rs. 2 lakhs under Section 114(a) of the said Customs Act. The appellant, thereafter, preferred an appeal before the Commissioner (Appeals) who vide the impugned order set aside the order of the original authority and allowed the appeal. The department is in appeal against the impugned order.
3. The grounds alleged in the appeal are that the case under consideration is not a case of value enhancement but a case of misdeclaration of imported goods in relation to the brand/make/model and value thereof. The importer did not produce the manufacturers invoice in spite of specific request from the Customs but merely gave the reply that the manufacturer refused to give the invoices on account of trade secrecy. Shri Srinivasan, in his statement given under Section 108 of the Customs Act, has clearly stated that the goods under importation are of Sony make and his statement has evidentiary value and during the cross-examination also he has confirmed the same. Accordingly, it has been prayed that the impugned order be set aside and the order passed by the original adjudicating authority be restored.
3.1. The learned AR appearing for the department reiterates the grounds urged in the appeal memorandum.
4. The learned counsel for the respondent submits that the department has not produced any credible evidence to show that the goods under importation are of any brand or the value thereof has been under-declared. The opinion of the technical experts relied upon by the department has not been found to be credible during the cross-examination. The appellant has submitted values of contemporaneous imports of similar products from various countries, both for unbranded as well as for Sony brand car CD players black body. While the value varies from US $ 8.00 to US $ 8.35 in the case of Sony brand, the same ranges from US $ 6.00 to US $ 6.50 in respect of unbranded goods which compares very favourably with the value of US $ 6.65 declared by them. Even if the value of Sony brand metal cabinet is taken into account which is US $ 8.00 to US $ 8.35, taking into account the quantity of imports undertaken by them which is 6100 pieces, the value of US $ 6.65 declared compares favourably for the Sony brand products imported from China or Hong Kong for the same models which the department alleges to be the goods under importation. Thus, the department has completely failed to establish the case of undervaluation or misdeclaration and therefore, the lower appellate authority has rightly allowed their appeal.
5. After hearing both sides, we are of the view that the appeal itself can be disposed of at this stage. Therefore, after granting stay of the recovery of dues adjudged, we take up the appeal itself for disposal.
6. We have carefully considered the rival submissions.
6.1. As regards the opinion of Shri Prashant Mohan Deshpande, relied upon by the department, during the cross-examination by the importers counsel, he has clearly admitted that he has no expertise either in the manufacture of car audio CD players or in repairing the said product. As regards the testimony of Shri S. Srinivasan, it is not clear or categorical. While the department alleges that the black deck under importation is of Sony CD player bearing model No. CCP-CDX-GT-280S and CCP-CDX-GT480US, Shri Srinivasan has clearly admitted that he does not know whether M/s. Sony manufactures these products or where it is manufactured. He has also admitted that only because of certain markings and numbers found on the metal cabinet and on the PCB card which read as Sony PWB Main 1-87-690-21A or Sony MG 101S/101Y he has given the opinion that the product could be of Sony make. From the examination report it is seen that in addition to the PCB there was so many ICs indicating the marking as Made in Japan and also indicating that one of them was Toshiba make. It was also found that the set was fitted with a motor with markings Made in China. From the examination report it is seen that the black deck under importation consists of various parts/ components made in various countries and bearing different markings. From these, no conclusive evidence can be derived to say that the product is of Sony make or of unbranded make. It is a well known fact that many electronics products are assembled utilising components of various makes so as to constitute complete product. The best example is that of computers which are assembled at site using the parts manufactured by various well known computer manufacturers; so is the case with the car audio CD players. Merely because some parts contain the markings of Sony, it does not mean that the complete or fully assembled product is of Sony brand or Sony make. Thus, it is seen that no conclusive evidence has been led by the department to establish that the product under importation is Sony brand. If that be so, the Customs could not have arrived at the value of the goods under importation on the basis of Sony products/models. Further, the importer in the instant case, has provided NIDB data which is Customs own data bank to show that the black deck CD of Sony make itself has been allowed imports into India at US $ ranging from 8.00 to 8.35 and the unbranded ones have been allowed imports at values ranging from US $ 6.00 to 6.65. The value which was declared in the instant case is US $ 6.65 per set which compares very favourably with the value of the contemporaneous imports not only of Sony brand but also other unbranded varieties.
7. In the light of these evidences, the lower appellate authoritys conclusion that the department has not made out their case conclusively cannot be faulted. Accordingly, we find no reason to interfere with the findings of the lower appellate authority. In the result, we dismiss the departments appeal as devoid of merits.
(Operative part Pronounced in Court) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 10