Customs, Excise and Gold Tribunal - Delhi
Magnum International Trading Co. Ltd. vs Commr. Of Cus. on 7 February, 2000
Equivalent citations: 2000(119)ELT696(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. M/s. Magnum International Trading Co. Ltd. have filed this appeal against the Order-in-Original, dated 25-3-1996 passed by the Commissioner of Customs, New Delhi.
2. Briefly stated the facts are that the Appellants filed a Bill of Entry No. 203011, dated 11-1-1995 for seeking clearance of Rolls Royce Car Model 1994 sent by M/s. Jack Barclay Ltd., London. The car was released on payment of duty based on the declaration filed by them regarding value and other particulars of car against Import licence No. P/K/05466 V, dated 30-11-1993. Subsequently the car was seized as the investigation revealed that the CIF Value should be Rs. 53,20,987/- instead of Rs. 43,95,712/- declared by the Appellants and that the Import Licence was short by Rs. 9,25,275/-. The Commissioner of Customs, under the impugned Order, demanded Customs duty amounting to Rs. 12,28,731/-, imposed penalty of Rs. 10 lakh and confiscated the car with an option to redeem the same on payment of a fine of Rs. 15 lakh, holding that as per certificate from the British Customs, the ex-factory price of the impugned car was £ 102527.20 and as per invoice dated 23-12-1994 issued by M/s. Jack Barclay, the price was £ 113035; that the Appellants had given a forged invoice and not a true invoice; that as per Tribunal's decision in Sanjay Chandi Ram v. C. C. Calcutta -1991 (52) E.L.T. 413, the actual CIF price could be debited to the licence provided it was a bonafide price.
3. Shri L.P. Asthana, learned Advocate, submitted that the invoice submit by the Appellants has been considered to be forged one by the Commissioner on the basis of an unsigned copy of an invoice dated, 23-12-1994 purported to have been issued by M/s. Jack Barclay; that the value has been enhanced on the basis of unsigned invoice which is no evidence at all; that a genuine invoice cannot be challenged on the basis of an unsigned invoice; that the reference number given in invoice issued by M/s. Jack Barclay to them, is different from that given on the unsigned invoice; that unsigned invoice is not authentic is also evident from the fact that for an international transaction no value added tax (VAT) is to be paid by the seller whereas in the unsigned invoice a VAT of $ 16,385 had been added. The learned Counsel, further, submitted that letter, dated 7-8-1995, from M/s. Rolls Royce Motor Cars, refers to a chasis No. which is different from the chasis No. quoted in some letters of enquiry of the U.K. Customs and as such it is not clear whether the price given by M/s. Rolls Royce Motor Cars is of the case in question or of another car . He also mentioned that in domestic trade in U.K., VAT which is about 17-18% is included in the sale price and if it is deducted from £ 1,02,427, the net price would be almost the same as declared by the Appellants; that generally export prices are lower than the domestic prices; The learned Advocate, further, mentioned that the Appellants had paid only £ 81500 to the supplier which is evident from the demand draft, dated 27-1-1995 (at page 19 of Appeal Papers), that on the basis of a fax message (at page 51 of the Appeal Papers) the Revenue is concluding that the payment of £ 1,08,670.50 has been made to M/s. Jack Barclay Ltd; that there is nothing to connect the Appellants with the said message; that according to letter, dated 22-8-1995 of High Commission of India, London, the invoice submitted by the importer was a proforma invoice; that the Department has to prove the charge of undervaluation as held by the Supreme Court in the case of Mirah Exports Pvt. Ltd. v. Collector of Customs -1998 (98) E.L.T. 3 (S.C.). He also contended that the Revenue had not taken a formal statement from M/s. Jack Barclay about the price at which impugned car was sold. He also relied upon the decision in the case of Collector of Customs v. East Punjab Traders- 1997 (89) E.L.T. 11 (S.C.) wherein it was held that authenticity of documents obtained by Customs not bearing any signature and not received from proper source is suspected. He finally submitted that under Rule 8 of the Customs Valuation Rules, manufacturer's price cannot be taken for the purpose of assessment.
3. Countering arguments, Shri S. Srivastava, learned DR submitted that the factual position is that there were two invoices; that the invoice submitted by the importer was a pro-forma invoice issued by a Mr. Stephen Folds, Sales man, as a guide to the 'breakdown' of prices; that the High Commission of India, London obtained a copy of the true invoice along with a copy of the bank transfer payment; that Mr. Choudhary of the Appellants was the purchaser; Mr. Kapur was the agent who paid a deposit of £ 5000 to secure the vehicle and if this amount is added to Telex Message the value comes to almost same as in the invoice. The learned DR reiterated the findings of the Commissioner as contained in the impugned Order.
4. We have considered the submissions of both the sides. The dispute in the appeal is about the valuation of one Rolls-Royce car imported by the Appellants. They have declared the value to be £ 81,500 whereas according to the Revenue, the supplies had sold the car for £ 1,13,035 and according to letter of the Manufacturer, the factory price of the car was £ 1,02,527.20 inclusive of accessories. The main argument on behalf of the Appellants is that the invoice submitted by the Revenue is unsigned one which cannot be relied upon. The Revenue has now brought on record a copy of High Commission of India's letter, dated 23-7-1999 which reads as under :
"Dear Mr. Hussain, Subject:- Import of Rolls Royce, Silver spur-Ill Please refer to your above reference on the subject cited above. Officers of HM Customs & Excise had again made enquiries with Jack Barclay Ltd. London. Clarification on the point raised by you is as under :-
1. The invoice of Jack Barclays was provided by them, and is a correct copy of the original. It has been initialed and signed by the salesman and the signature has been verified and recognised by the accountant and sales manager at Jack Barclay Ltd.
2. Jack Barclay Ltd. have confirmed that the bank statement does relate to the sale of this particular vehicle and that a Mr. Kapur was acting on behalf of the Indian client.
3. The amounts mentioned are different because Mr. Kapur paid a deposit of 5,000 to secure the vehicle, which was then ordered and adapted to his requirement hence boosting the final price to £ 113,035.00 which is the correct sale price of the vehicle.
With regards, Yours sincerely, Sd/-
(S.B. Singh)"
5. It is seen from this letter that M/s. Jack Barclay Ltd., had provided the invoice which a correct copy of the original. It is also mentioned that the invoice was initialled and signed by the salesman and the signature has been verified & recognised by the accountant and sales manager at Jack Barclay Ltd. In the light of these averments, there remains no doubt that the impugned car was sold at the price of £ 1,123,035 inclusive of value added tax of 16,835 which is to be deduced to arrive at the assessable value. As no discount has been indicated in the invoice, no deduction is to be made on that count. The demand of duty has to be worked out accordingly.
6. The learned counsel has submitted that for licencing purposes what is relevant is C.I.F. value and not the value under Section 14 of the Customs Act and, therefore, even if the value is enhanced for assessment purpose, C.I.F. value will remain the same for licence debiting purposes. He placed reliance on the decision in U.O.I. v. Glaxo Laboratories (I) Ltd -1984 (17) E.L.T. 284 (Bom) and Sneha Traders (P) Ltd v. C.C. -1992 (60) E.L.T. 43 (Cal.) whereas the Commissioner has relied upon the decision in Sanjay Chandiram's case, supra. We observe that the price of the car in question as per suppliers invoice is more than the price declared by the Appellants, the licence has to be produced for the entire value of the goods imported. The Commissioner has rightly observed that the price declared by the Appellant was not a bona fide price and as such the licence value was short by the actual value. The facts in the case of Glaxo Laboratories and Sneha Traders are quite different from the facts in the present matter and as such the ratio of these decisions will not be applicable in the present matter. In Glaxo Laboratories case the Bombay High Court observed that the prices quoted on the basis of a certain invoice may be the ruling prices at that time, but they are liable to change, since a licence covers some reasonable period of six months or a year. During this period of the licence the prices may go up. This is not so in the present matter. Accordingly the car in question was liable to confiscation. However, we felt that the redemption fine & penalty imposed is on higher side. We therefore, reduce the redemption fine to Rs. 5 lakhs and penalty from Rs. 10 lakh to 4 lakh.
This appeal is disposed of in above terms.