Customs, Excise and Gold Tribunal - Delhi
Truwoods Pvt. Ltd. And Shri Sanjiv ... vs Commissioner Of Customs on 3 February, 2005
Equivalent citations: 2005(100)ECC62
ORDER V.K. Agrawal, Member (T)
1. These are eight appeals, filed by M/s Truwoods Pvt. Ltd. and Shri Sanjiv Agarwal against four Orders-in-Original passed by the Commissioner of Customs by which the assessable value of the goods imported by them has been enhanced and demand of differential customs duty has been confirmed besides imposing penalties on both the Appellants.
2. Shri Krishna Kant, learned Advocate mentioned that M/s. Truwoods Pvt. Ltd., Appellant No. 1, have imported 'wood veneers' of different thicknesses from M/s. Pargan Singapore (Pvt.) Ltd., Singapore during 1999 and 2000; that in respect of two Bills of Entry Nos. 100622 dated 28.9.99 and 100594 dated 21.10.99, the import of wood veneers was made by them by purchasing the goods from M/s. NCC Trading Co., Arunachal Pradesh, on high sees sale basis; that they filed declarations in terms of Rule 10(1) of the Customs Valuation (Determination of Price of Imported Goods) Rules, alongwith Bill of Lading, Invoice Packing List, Certificate of Origin, Sales Contract/Proforma Invoice, etc.; that the goods imported by them were assessed to duty and after examination of the goods, the clearance was allowed; that subsequently a doubt was entertained by the Department about the genuineness of the declared price by alleging that the unit price of wood veneer had been given in US $ per cubic metre whereas generally only logs are sold in cubic metres (M3) and not veneers which are sold in square metre (M2); that on being asked, they submitted the original manufacturer's invoice and packing list which were received by them through their supplier; that the Customs Officers searched their premises on 16.5.2001 but no incriminating document was recovered by the officers; that the statement of Shri Sanjiv Agarwal, Chief Executive was also recorded.
2.2 He, further, mentioned that the Department is alleged to have obtained the export document under which the impugned goods were supplied by the manufacturers to M/s. Paragan Singapore who in turn supplied the goods to the Appellants; that the Department has thereafter alleged that the value declared by them in the various Bills of Entry does not represent the true transaction value in terms of Rule 4 of the Customs Valuation Rules; that after issuing the show cause notices, the Commissioner, has passed the impugned four Orders without taking into account the written reply alongwith supporting documents filed by the Appellants.
3. The learned Advocate submitted that the invoice price declared by the Appellants was based on the contract price and/or based on the price indicated in the manufacturer's invoice and it was the negotiated price for the impugned goods; that the invoice value is the transaction value under Rule 4(1) of the Customs Valuation Rules which is to be accepted except in the four circumstances mentioned in Sub-rule (2) which are not applicable in the present matters. He relied upon the judgment in Eicher Tractors Ltd. v. CC, 2000 (72) ECC 673 (SC): 2000 (122) ELT 322 (SC). He, further submitted that documents relating to export obtained by the Department from the Italian Customs Authorities were unsigned and unattested photocopies which has no evidentiary value; that even the originals of these documents have not been produced so as to test the veracity of the same; that as the documents obtained by the Department do not bear any seguatires (sic, signatures) whatsoever, the authenticity of these documents is suspect and it is not legal to place reliance on photocopies of copies of documents; that in these circumstances, the presumption under Section 139 of the Customs Act could not be raised. He relied upon the decision in the case of Md. Abdul Halim v. CC, Calcutta, 2001 (130) ELT 842 (Tri) wherein the Tribunal found that the objection of the Appellants, that the export declaration of the supplier are merely photocopies which are neither attested nor bear the signatures nor the originals of the same have been produced so as to test the veracity of the same, carry much weight. The Tribunal has relied upon the judgment of the Supreme Court in the case of Collector of Customs, Bombay v. East Punjab Traders, 2002 (79) ECC 469 (SC) : 1997 (89) ELT 11 (SC) wherein the Supreme Court has held, when documents obtained from foreign sources, were photocopies not bearing the signature either of the exporter, the forwarding agent the stevedore or the Customs Officer, as under:
"In these circumstances, the presumption to be raised under Section 139 (ii) of the Customs Act could not be raised because the documents did not bear any signature, did not come from proper custody and it is difficult to understand why the Indian Customs did not interact with the Japan Customs and obtain authentic copies of the document from the latter."
4.1 The learned Advocate mentioned that Section 78 of the Indian Evidence Act contains the provisions regarding providing of public documents; that Sub-section (6) of Section 78 of the Evidence Act provides that "public documents of any other class in a foreign country" may be proved "by the original, or by a copy certified by the legal keeper thereof With a Certificate under the seal of a Notary Public, or of an Indian Counsel or diplomatic agent, that the copy is duly certified by the officer having the legal custody of the original,, and upon proof of the character of the document according to the law of the foreign country". He further mentioned that Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948, empowers, every diplomatic and Consular Officer in any foreign country to administer any oath and take any affidavit and also do any notarial act which any notary public may do within a State. The learned Advocate contended that thus there is a set procedure for getting the documents from foreign country which has not been followed in the present matters. He also contended that even the Commissioner himself is not sure about the documents as he has mentioned in his findings that "the documents relating to export obtained from the Italian Customs authorities placed before me are purported to be issued by the original manufacturer M/s. F L L I Zenghere, Italy". The learned Advocate mentioned that the fact is that these documents have been filed by the freight forwarder and not by the supplier of the goods; that nowhere the name of the Appellant has been mentioned anywhere in these documents; that the documents relied upon by the Department are neither primary evidence nor secondary evidence and the veracity/authenticity/genuineness thereof is not established and therefore are not admissible in law. He relied upon the following decisions:
(i) V.K. Impex v. CC (Port), Kolkata, 2002 (141) ELT 564 (Tri);
(ii) Rajendra Sanghvi v. CC, Mumbai, 2001 (130) ELT 638 (Tri);
(iii) South India Television (P) Ltd. v. CC, Calcutta, 2001 (136) ELT 243 (Tri)
(iv) Taito Watch Manufacturing Industries v. CC, Jaipur, 2004 (173) ELT 17 (Tri)
(v) Sai Impex v. CC, 1992 (62) ELT 616 (Tri) 4.2 Finally the learned Advocate mentioned that there is no allegation in the show cause notice that the manufacturer's invoices submitted by the Appellants are either fabricated or bogus; that moreover the Commissioner has himself come to the conclusion that "the following are in favour of the party":
(i) They have a signed invoice from the US supplier purported to have been issued to M/s. Paragun Singapore Pvt. Ltd.
(ii) They have a genuine insurance cover issued 10 days before the departure of the ship from the point of loading which the department has not questioned to be incorrect.
(iii) The contemporaneous evidences are equally titled on both sides.
(iv) The imports are also sometimes denominated in CBM." He contended that the Department has not put forward any concrete data or proof to substantiate their allegation that the invoices submitted by the Appellants are not genuine; that there is no basis whatsoever to reject these manufacturer's invoices; that no differential duty is payable by them nor any penalty is imposable on any of the Appellants.
5. Countering the arguments, Mrs. Krishna A. Mishra, learned Senior Departmental Representative, submitted that the documents relied upon by the Department are not public documents as are dealt with in Section 78 of the Indian Evidence Act; that only the Customs authorities can get these documents through proper channel; that the Department obtained these documents from the Italian Customs authorities through the Directorate of Revenue Intelligence through the High Commission of India, London; that there is a vast difference noticed between the value as per documents relating to export and the invoice price as per the manufacturer's invoice submitted by the appellants; that the argument of the Appellants that the documents are not authenticated is not tenable since the source of the documents obtained are the records of the Italian Customs Authorities and they have been obtained from the agency authorized by the Government of India to conduct intelligence work overseas, that is the Directorate of Revenue Intelligence (DRI); that DRI has stated that they had received the documents from Central Commando of Financial Police, Italy; that all the documents also bear the seals of Italian Customs; that these documents contain details which are identical to the documents presented at the time of import by the Appellants; that the matching of details clearly bring out the fact that the documents acquired officially by the Department represent the impugned goods imported by the Appellants. She relied upon the decision in the case of Magraj Patodia v. R. K. Birla, AIR 1971 SC 1295 wherein the Supreme Court has held that the fact that a document was procured by improper or even illegal means will not be a bar to its admissibility if it is relevant and its genuineness is proved. "But while examining the proof given as to its genuineness the circumstances under which it came to be produced into Court have to be taken into consideration." She also relied upon the decision in the case of Ram Khazana Electronics v. CC, Air Cargo, Jaipur, 2003 (156) ELT 122 (Tri) wherein the Tribunal has found that the Commissioner was fully justified in enhancing the assessable value on the basis of export declarations obtained by the DRI from their counterpart through legal and diplomatic channel and as the entries in the said declarations tally with the name of the Party, airway bill number and description of the goods though there was difference in Tariff classification. Reliance has also been placed on the decision in the case of Diary Den (India) Pvt. Ltd. v. CC, Mumbai, 2003 (54) RLT 692 (CEGAT) wherein the Tribunal has held that "the fact that the precise Authority of the Indian Government to whom this document was handed over by the Italian Customs has not been established should not by itself be a bar against considering it to be authentic."
6. The learned Senior Departmental Representative also submitted that the ratio of the decision in East Punjab Traders is not applicable to the present matters since the documents were not obtained from the records of the competent Authority namely the Customs at the port of exportation; that it is thus established that the Appellants have wilfully mis-declared the value of the impugned goods and have submitted the documents in which the actual value of the goods had been suppressed for assessment purposes. Finally, the learned Senior Departmental Representative relied upon various decisions, some of which are:
(i) CC, Jaipur v. Indian Watch Parts Mfg, 2004 (171) ELT 141
(ii) Craft Studio v. CCE, Jaipur 2004 (163) ELT 109
(iii) Weston Components Ltd. v. CC, New Delhi, 2000 (118) ELT 199
(iv) R.J.S. Studios (P) Ltd. v. CC, Delhi, 2000 (118) ELT 350
7. In reply, the learned Advocate mentioned that the documents evidencing receipt from Italian Customs were not mentioned in the show cause notices and were not part of the relied upon documents; that accordingly these documents cannot be introduced through filing of Cross Objection; that Revenue cannot supplement its case by filing Cross Objection, that it has been held by the Supreme Court in J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. CCE, 1998 (60) ECC 254 (SC): 1998 (99) ELT 8 (SC) that "it is one thing to say that Respondent can, in an Appeal filed by the opposite party, re-canvass for reversal of a finding reached against him in the judgment (the operative part of which the Respondent is now supporting), and it a different thing to permit the respondents to put forth absolutely new grounds for it." He also relied upon the decision in Suity Exports Ltd. v. CCE, Kolkata-III, 2003 (156) ELT 616 (Tri) wherein the Tribunal has held that the purpose of filing cross objection is not to make a prayer for upholding the Order which is in favour of the Revenue. Reliance has also been placed on the decision in CCE, Ahmedabad v. Texel Plastic Ltd., 1999 (114) ELT 344 (Tri) wherein the Tribunal has held that "Cross-objections filed by the Respondents herein are not maintainable because they get complete relief by the lower authorities vide the impugned order. Therefore, the cross objections are also dismissed."
8. We have considered the submissions of both the sides. The case of the Revenue is that the impugned goods manufactured in Italy and USA were supplied to M/s Paragan Singapore who in turn had sold the goods to the Appellants and that the value of the goods declared by the Manufacturer in the Export Declaration filed by them with their respective Customs Authorities was higher than the price at which M/s. Paragan Singapore has sold the goods to the Appellants or mentioned in the Manufacturer's invoice subsequently produced by the Appellants. On the other hand, the Appellants have contended that the value was declared by them on the basis of contract price and they have submitted the manufacturer's invoices and packing list and other material in support of the price declared by them. They have also emphasised the fact that the documents procured by the Revenue do not bear any signatures and are photocopies which are not even attested and accordingly the assessable value cannot be enhanced on the basis of such documents. Both the learned Advocate and learned Senior Departmental Representative have referred to various decisions of the Tribunal in support of their submissions. We observe that the learned Advocate has rightly contended that the original copies of the Export Declarations filed by the manufactures have not been furnished by the Revenue to the Appellants and there is nothing on record to show that the price declared therein is correct as no statement of the manufacturers concerned has been given to the Appellants or brought on record. In the case of V.K. Impex, supra, the Tribunal did not uphold the Order enhancing the value of the imported goods on the basis of photocopies of the unsigned documents though as per the report given by the U S Customs, foreign supplier had accepted the payment in US dollars, by holding that 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." The Tribunal also observed in V. K. Impex case that "the Appellants have produced on record the evidences showing importation of the contemporaneous imports at the same value at which the Appellant had imported the goods." In the present matters also the Appellants have submitted the contemporaneous imports which show that the prices at which they have imported the goods are not abnormal but are consistent with the prices of the contemporaneous imports. In fact the Commissioner himself has mentioned in one of the impugned Order that the contemporaneous evidences are equally titled on both sides. There is no challenge of this finding in the impugned Adjudication Order by the Revenue. Once the Commissioner finds that the contemporaneous evidences support the prices declared by the Appellants, the said evidence cannot be discarded and the value cannot be enhanced on the basis of other evidence. We also note that the Adjudicating Authority has also mentioned in the said impugned Order that the Appellants have a genuine insurance cover issued ten days before the departure of the ship from the point of loading which the Department had not questioned to be incorrect and that the foreign supplier had a signed invoice from the US supplier. We find substantial force in the submissions of the learned Advocate that the Reverue has not brought any concrete material to prove that the invoices submitted by them are not genuine. The sole basis for enhancing the assessable value is the export declarations obtained by the Revenue from Italian Customs/US Customs of which original copies have not been brought on record. In a similar facts, the Appellate Tribunal has held in the case of South India Television (P) Ltd. p. CC, 2001 (136) ELT 243 (Tri) as under:
"....we find that the only basis for enhancing the assessable value of the imported goods is the export declaration furnished by the importers/suppliers at Hong Kong. The Appellants have strongly contended that it is the photocopies of the said declaration and the signature bearing on them do not reflect upon the Authority of the persons signing them and as such the same cannot be made the basis for rejecting the transaction value. As against this, the Commissioner has observed that the said export declarations have been obtained through Hong Kong Customs and as such he has rejected the Appellants' contention that this export declaration being only Xerox copies cannot be considered as authenticated documents. We agree with the submissions: of the Appellants that these Xerox copies of the said documents, even though procured by the Hong Kong Customs and forwarded to the Commission for India in Hong Kong which in turn has forwarded them to India, will not make then genuine documents. This was so held by the Tribunal in the case of Indian Optics Pvt. Ltd. v. Commissioner of Customs, New Delhi, 2000 (123) ELT 1022 (Tri): 2000 (123) ELT 381 (CEGAT)".
9. The Tribunal in South India Television case has also found force in the Appellants' submission that there is a possibility of the export declaration price being on the higher in Order to claim higher export incentive and in such circumstances, the transaction value has to be accepted. Shri Sanjeev Agarwal, Chief Executive of the appellant Company, has clearly deposed in his statement dated 16.5.2001, that there might be a possibility of some kind of export/import benefits or adjustment in taxation in those countries. The Revenue also does not seem to have checked up the genuineness of the manufacturers' invoice from the Customs/Revenue Authorities of the respective countries or from the manufacturers themselves. No basis has been mentioned in the Report received from USA for reporting that the invoice submitted by the Appellants was tempered with. The Supreme Court in the case of East Punjab Traders, supra, besides the fact of source of obtaining the document, has held that the presumption under Section 139 (ii) of the Customs Act cannot be raised because the document did not bear any signature. The Court has held as under:
"In Order to raise the Presumption under the said Provision; the basic facts had to be laid. Even though they bear a serial number and stamp of Japan Customs, the fact remains that they are copies of copies and indisputably bear no signatures of the exporter, the forwarding agent, the stevedore or the Customs Officer, no signature at all or any of them." In the present matters also the documents are unsigned. The Revenue, after finding in Order-in-Original No. 19/2003 that the contemporaneous evidences are equally titled on both the sides, cannot disregard the transaction value. In the case of Ramkhazana Electronic, relied upon by the learned Senior Departmental Representative, the judgment of the Apex Court in East Punjab Traders regarding unsigned nature of the document was not cited before the Tribunal. In Diary Den case, the photocopies of the documents had been attested by the customs officer who signed the report of the Italian Customs whereas in the present matters the export declarations are unsigned and unattested one. In CC, Jaipur v. Indian Watch Parts MFG., relied upon by the learned Senior Departmental Representative, the transaction value was not accepted as the manufacturer's invoice or other documents to support value shown in import invoices were not produced and comparable import price was found to be closer to export declaration than price declared in import invoices. Similarly in R.J.S. Studio case, the Appellants mis-declared the origin of goods and no agreement or any document was produced by them to prima facie show that the price declared by them was the one which was agreed upon on negotiation before importing the goods. In Craft Studio case, the investigation was conducted by the Hong Kong Authorities which had clearly brought out the modus operandi adopted by the Appellant therein and its supplier and the payment of undeclared portion of the value of the goods on telegraphic transfer brought out the deliberate nature of the offence. Thus the decisions relied upon by the learned Senior Departmental Representative are not applicable to the facts of the present matters. We, therefore, set aside all the impugned orders and allow all the appeals with consequential relief, if any.