Customs, Excise and Gold Tribunal - Mumbai
Actis Technologies Pvt. Ltd. vs Commissioner Of Customs on 25 May, 2005
Equivalent citations: 2005(189)ELT121(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. Appellants are a company who had imported various brands of multimedia projectors and the Director of the Company. The present appeal relates to the consignment of EPSON Multimedia Projector BMP 7300 FM 7500 & EMP 7200 Models, in one, one & two pieces respectively, whose declared values have been impugned. The imports were from Singapore, The BE was assessed on 3-8-91 and goods cleared on payment of duty, 1.2 Based on certain information, the imports were enquired and a notice dated 4-2-2000 calling upon the appellants as to why -
(i) FOB unit price of EMP 7200, EMP 7300 & EMP 7500 model projectors should not be taken as USD 6200. 9114 & 6200 per piece respectively and differential duty demands on value reworked be not made under Section 28 of the Central Excise (sic) [Customs] Act, 1962.
(ii) Imported goods not be confiscated under Sections 111(d) & 111(m).
(iii) Penalty not be imposed under Section 112(d) on the appellants.
1.3 The notice alleged that the appellants are the sole dealer of EPSON Singapore Pvt. Ltd. in India & based on a third party import by C-DAC-Pune for Model EMP 7200 rejected the proposal values for all the models under import.
2.1 After hearing both sides and considering the materials it is found -
(a) The import by C-DAC was with warranty while the present imports are without warranty. The supplier of the goods in Singapore vide their letter dated 14-12-99 have informed the department -
(i) General Engineering & Spares is authorised dealer effective 1st June, 1998.
(ii) There is no difference in price offer. As already mentioned vide our letter dated 10-11-1999 in Annexure-I, we have price offer with warranty and price offer without warranty to the dealer. In all direct imports to Indian customers, the price offer is with warranty. The difference in price is due to the warranty cost, service cost, documentation and operational costs involved by EPSON Singapore Pvt. Ltd.
(iii) The machine sold to General Engineering & Spares, is without warranty. However, against specific request, we consider warranty supply. Copies of invoices enclosed.
(iv) In the case of all direct import General Engineering & Spares, Mumbai, we will give the commission to them. It only the US$ 8,407.20 and not US$ 8,497.20 as mentioned in your letter is towards the commission as per details enclosed.
(v) No other dealers in India for Multimedia Projects.
Thus there are two class of buyers from Singapore supplier i.e. with warranty and without warranty; which explains the difference Warranty cost, if not incurred and charged by the shipper abroad cannot be added. It cannot be basis of comparison to imports made direct by third parties as in this case.
(b) The quantity imported by a sole dealer and a solitary import on warranty by a third party importer cannot be compared.
(c) Warranty given and costs thereof cannot be mere 'eye wash' as is held by the ld. Commissioner in the findings to arrive at in paragraph 25 of the impugned order. Warranty is a known commercial cost and the entire 'middle tier' in a sale supply chain exist on margins which are including this costs of transfer of warranty liabilities. The Customs Commissioner while arriving at valuations in the course of international trade cannot close his eyes to a commercial necessity and call an explanation of differences in value due to warranty to be an 'eye wash'.
(d) That dealers and that also sole dealers in India will get the goods less than the Consumer prices or retail buyers price as in this case of C-DAC. Such reduction in prices due to discount called by various means when loaded with overseas sellers of liability of warranty are to be permitted in view of the explanation brought on record in the investigations by obtaining the clarification from the Singapore suppliers. That the present appellant were given the differential as their profit advantage and they have not been burdened with the warranty/& quantity in sales effected to than as sole dealers. We find no merits in the order of the Commissioner in arriving at undervaluation, misdeclaration and thereafter on confiscation and penal liability in the facts of this case as we cannot share the findings on undervaluation.
(e) The appellants have relied upon the order of Commissioner (Sahar), Air Cargo, Mumbai on similar imports, where the charges after examining the correspondence with M/s. EPSON in the undervaluation charge, in a similar notice were not upheld. We find no reasons not to appreciate the finding of CC (Sahar) in their case & to, find no reason to uphold the finding in the order impugned. It is to be set aside.
3. Appeals are therefore allowed after setting aside the impugned order.
(Pronounced in Court)