Customs, Excise and Gold Tribunal - Calcutta
V.K. Impex vs Commissioner Of Customs (Port), ... on 22 January, 2002
Equivalent citations: 2002(141)ELT564(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. Vide the impugned Order, the Commissioner of Customs, Kolkata has confirmed the differential duty of Rs. 18,06,422.00 (Rupees eighteen lakhs six thousand four hundred twenty-two) against the appellant-company in respect of two consignments of Re-conditioned Parts of Photocopier Machines, on the ground of under valuation of the same. In addition, he has confiscated the goods with an option to the appellants to redeem the same on payment of redemption fine of Rs. 10.00 lakhs (Rupees ten lakhs). Penalty of Rs. 2,93,518.00 (Rupees two lakhs ninety-three thousand five hundred and eighteen) has been imposed upon the importer under the provisions of Section 112(a) of the Customs Act, 1962. The said Order of the Commissioner is impugned before us. Shri Sudhir Mehta, learned Advocate appearing for the appellant-company submits that they purchased two consignments of Re-conditioned Components of Photocopier from M/s. Ross International Inc., U.S.A., under the cover of two invoices bearing Nos. 4466, dated 31-12-1998 and 4466A, dated 30-12-98. The value of the goods in the said invoices was shown as US $16530.30 and US $7806.30 respectively.
2. On receipt of the goods, the appellants filed bills of entry which were assessed to duty by the Customs and the goods were cleared on payment of customs duty. Thereafter, the Customs Authorities searched various premises and seized the goods on entertaining a reasonable belief that the same were undervalued. Statements of various persons including Shri S.K. Agarwal, Proprietor of the appellant-company, were recorded on various dates. The Customs also made overseas enquiries from the supplier of the goods in question through U.S. Customs who forwarded certain documents and the enquiry report conducted by the U.S. Customs.
3. Based upon the above facts of the enquiry report of U.S. Customs, the appellants were issued a show cause notice alleging undervaluation of the goods. Accordingly, the appellants were called upon to show cause as to why the value of the said goods imported by them, should not be enhanced and the differential duty be not confirmed against them. The notice also proposed confiscation of the goods and imposition of personal penalty upon the appellant-company. The said notice culminated into the impugned Order of the Commissioner.
4. Shri Sudhir Mehta, learned Advocate submits that the entire case of the Revenue is based upon the overseas enquiry report by the U.S. Customs. He also submits that the Commissioner has relied upon the invoices raised by M/s. Ross International Inc., USA, foreign supplier, showing the value as US $21,919.50 and US $80,355.50 as also a Collection Order on M/s. Habib American Bank. He submits that the same are unsigned and unauthenticated documents and cannot be made the basis for enhancing the assessable value of the goods in question. The Export Declaration made by the overseas supplier cannot lead, ipso facto, to the conclusion that the price shown in that declaration has been remitted by the appellants to their foreign supplier, especially when such documents are unsigned and are only photocopies. As regards the Collection Order of the said Bank, he vehemently contends that the same does not belong to the appellant-company. He assails the integrity of the Investigating Officers by submitting that they have only produced half of the said Bank Remittance Order wherein the name of the appellant-company is written by hand. He also submits that they have made enquiries from their personal source and came to know that the said Bank Remittance Order was not made under their instructions, but was issued under the instruction of one M/s. Razorbill Ltd., U.K. through the Bank of Scotland Ltd. He submits that when this fact was brought to the notice of the adjudicating authority, he did not dispute the same, but brushed aside the said evidence by observing that inasmuch as the same is a photocopy, it does not help the importer. He also concluded that the name of the appellant-company, M/s. V,K. Impex was written by hand. The contention of Shri Me-hta is that on the Bank Remittance Communications, the name of the person under whose instructions, the remittance is being made, is never written by hand. He submits that they have got nothing to do with such remittance and the Customs cannot enhance the value by linking the said remittance to the appellants' import. Shri Mehta also submits that subsequent to the issuance of the show cause notice, they made enquiries with their foreign supplier who disclosed that the invoices submitted by them were made at the higher price inasmuch as they were required to adduce certain documents in connection with the contracts with M/s. Razorbill Ltd. of U.K. Shri Mehta also submits that as per the Customs' own case, the values as per the purported invoices, and as per invoice raised by the supplier's and as per the export declaration made by him, are differing. He, further, submits that even if the Remittance made by M/s. Razorbill Ltd. of U.K. is taken into consideration, the total value differs from the purported invoices as also from the export declaration. As such, the declarations by the foreign supplier and the invoices raised by him, are not correlating and do not have any nexus with the invoices submitted by the appellant-company to the Customs Authorities, which should only be taken as correct invoices. In support of his above submissions, Shri Mehta relies upon the Hon'ble Supreme Court's decision in the case of Collector of Customs, Bombay v. East Punjab Traders reported in 1997 (89) E.L.T. 11 (S.C.) wherein it was held that documents obtained by photocopies by Indian Customs Officers during their visit to Japan for enquiry, should not be accepted as reliable documents in the absence of signature. He also relies upon the Tribunal's decision in the case of Commissioner of Customs, Mumbai v. Unimac (India) Ltd. reported in 2000 (122) E.L.T. 391 (Tribunal). Reference has also been made on the Tribunal's decision in the case of Md. Abdul Halim v. Commissioner of Customs, Calcutta reported in 2001 (130) E.L.T. 842 (T) = 2001 (43) RLT 609 (CEGAT-KOL.), wherein photocopies of foreign supplier's documents showing the export price, were not accepted as an evidence for undervaluation on the ground that the same were neither attested nor were bearing the signatures nor the originals were produced to test the veracity of the same.
4.1. Shri Mehta, further, assails the findings of the Commissioner on the ground that the same are based upon the enquiry report of the U.S. Customs, wherein Mr. Raj Mirchandani, President of M/s. Ross International Inc. had told them that the discrepancy in the invoices was on the ground that a payment of US $75,000.00 was made to M/s. Ross International Inc. by the appellant-company prior to shipment. He also submits that the said statement is not being given directly by Mr. Mirchandani. Only a report of the U.S. Customs as to what Mr. Mirchandani had told them, was there and the same was in the nature of a hearsay evidence. There is no statement of Mr. Mirchandani recorded by the U.S. Customs to the effect that there was under-valuation of the goods in question.
4.2. Shri Mehta, further, argues that the appellant-company had produced on record a number of evidences showing the contemporaneous imports. The adjudicating authority has not considered the said evidences produced by the appellant-company by observing that when there is a direct evidence of undervaluation, the contemporaneous import value is not to be adopted. He submits that the Customs should have accepted the transaction value of the goods and in case of any doubt, they should have considered the value of the contemporaneous imports. In the absence of any doubt about the contemporaneous import value, the adjudicating authority was not justified in rejecting the same.
5. We have also heard Shri D.K. Bhowmick, learned JDR for the Revenue, in support of the impugned Order passed by the Commissioner.
5.1. Shri Bhowmick, learned JDR pleads that the enquiry report having been made by the U.S. Customs, should be accepted as the proper evidence. However, in answer to a query as to why the complete document of Bank Remittance of U.K. was not provided to the appellants, he submits that only half document was available.
5.2. On being asked that when the date of the purported remittance by the appellant-company was 23-10-98 and the date of the contract between the appellant-company and the foreign supplier was 15-12-98, how could the said remittance be connected with the appellants' case when the same has been issued under the instructions of M/s. Ross International Inc. of U.K. He submits that there is fair chance of the appellant-company having remitted to the foreign supplier well in advance of the contract through some third party.
6. We have considered the submissions made by both sides. For enhancing the assessable value of the imported goods, the adjudicating authority has heavily relied upon the report given by the U.S. Customs, wherein they have disclosed that Mr. Mirchandani of M/s. Ross International Inc., foreign supplier, was examined and he has accepted the payment of US $75,000.00 through the Collection Order on M/s. Habib American Bank, New York. However, we find that all these documents photocopies of which have been produced before us, are unsigned documents. As rightly argued by the learned Advocate that the photocopies of such unsigned documents cannot be held to be proper evidence, as laid down by the Hon'ble Supreme Court in the case of East Punjab Traders (supra). The authenticity of the photocopies of the documents is suspected when neither the originals have been produced nor the signatures of the officers making enquiries are appearing on the photocopies of original. We also note that the appellants have strongly contested that Revenue had given only the counterfoils of the U.K. Bank Remittance Order with their name written in hand. However, when the full Remittance Order was obtained by the appellants, it was revealed that the same was actually made by one M/s. Razorbill Ltd. of U.K. This fact, when brought to the notice of the adjudicating authority by the appellant-company who had not been rebutted the same. He, has, nowhere, given a finding that the said Remittance Order was not made by M/s. Razorbill Ltd., U.K., as contended by the appellant-company. He is only rejecting the said contention of the appellant-company on the ground that it is only a photocopy of the Credit Advice which has been obtained by the appellant-company. We find that it is the photocopies of the documents only which are being relied upon by the Customs also.
7. After examining the said complete document produced by the appellant-company on the ground that the name of the appellant-company, M/s. V.K. Impex is written by hand. We fully agree with the learned Advocate that appearance of such name on the document by hand will not show that the said Remittance Order has been made by the appellant-company, especially when the fact that the same was made by M/s. Razorbill Ltd., has not been rebutted by the Customs. We also note that the values as per the purported invoice raised by the foreign supplier and as per the Export Declaration made by him, are different. Further, even if the said Remittance by the Bank is taken into consideration, the value of the imports made by the appellant-company, comes to a different figure. As such, it cannot be said as to which of the values is the correct value, when all the three even in accordance with the evidences produced by the Customs, differed considerably. As such, we are constrained to observe that the evidences produced by the Revenue are liable to be rejected, in view of the observations made by us in the preceding paragraphs.
8. We, further, note that the appellants have produced on record the evidences showing importation of the contemporaneous imports at the same value at which the appellants had imported the goods. Such evidence produced by the appellant-company has been dismissed by the adjudicating authority by observing that. When the other concrete evidences are available on record, there is no scope to look into the other contemporaneous imports.
Having already held that the evidences produced by the Revenue are not authentic, the contemporaneous imports have to be taken into consideration.
Inasmuch as the Commissioner has not rebutted the appellants' contention that there were contemporaneous imports of identical goods, showing more or less the same assessable value, we are of the view that the value as declared by the appellant-company is entitled to be accepted. Accordingly, we set aside the impugned Order and allow the appeal with consequential reliefs to the appellants.