Customs, Excise and Gold Tribunal - Delhi
Sawhney Export House (P) Ltd. vs Collector Of Customs on 13 March, 1992
Equivalent citations: 1992(60)ELT327(TRI-DEL)
ORDER G.A. Brahma Deva, Member (J)
1. Appeal Nos. C/1236/89-A ant C/2047/89-A are filed by M/s. Sawhney Export House (P) Ltd., New Delhi and Appea No. C/1264/89-A is filed by M/s. Sawhney Brothers, New Delhi. Since these are con nected matters and issues involved are common, they are clubbed together and are being disposed of by this common order.
2. The appellants imported 'Hooks and Loops' and 'Self Adhesive Tape' in ap peal Nos. 1236 and 2047 and appeal No. 1264 refers to importation of hooks and loop: only. The appellants imported hooks and loops from Taiwan. The value declared in the invoice for 25 mm hook and loop was at US $ 0.195 per twice metre. 70,400 T.M. vide Bill of Entry No. 106434 dated 26-11-1988,80,000 T.M. against Bill of Entry No. 10341! dated 30-3-1988 and 80,000 T.M. against Bill of Entry No. 106721 dated 19-12-1988 wen respectively imported by the appellants. The appellants also imported Self Adhesivi Tapes about 21800 pieces at the rate of US $ 0.395 per piece as per invoice. The Addi tional Collector has enhanced the value of hooks and loops for 25 mm size from the declared value of US $ 0.195 per pair metre to US $ 0.25 and in respect of 38 mm size from US $ 0.30 per pair metre to US $ 0.40 per pair metre. He also enhanced the value of Self Adhesive Tape imported by the appellants from the declared value of US $ 0.39; per piece to US $ 0.48 per piece. Accordingly, he raised the demand in three cases and ordered for confiscation of the said goods by giving option to redeem the goods on pay ment of redemption fine as set out in the respective impugned orders but without im posing any penalty on the Importer on the ground that there are no mala fides. Feeling aggrieved by the said orders on the point of valuation and redemption fine, the appel lants have come before the Tribunal by way of these three appeals.
3. Shri T.S. Sawhney, Managing Director of M/s. Sawhney Export House (P) Ltd., as well as Managing Partner of the firm Sawhney Bros, appeared in person and ad dressed the arguments on behalf of the appellants. He also filed detailed written sub missions. Department was duly represented by Shri Prabhat Kumar, learned JDR.
4. Shri Sawhney submitted that these two items, i.e., Hooks and Loops and Sel Adhesive Tapes imported from one and the same Manufacturer Exporter from Taiwai against running orders. These are not independent and isolated transactions but con tinue to be the part of the running contract. Manufacturer started new product which i of low standard quality with brand name 'Chico'. On recommendation of the known Im porter the order was placed for supply of more than 4 lac T.M. with the manufacture supplier in the month of August 87 which is considered off season against proforma in voice No. 1221 & 1225 dated 20-8-1987. He also booked for about 1,20,000 pcs. of Sel Adhesive Tapes against proforma invoice 134 dated 10-5-1988. He furnished the detail against running orders and clearance of the goods by the Department which are as fol lows :-
HOOKS & LOOPS:
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B/ENo. Date of No. of Days Size & Date Release. Taken.
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101350 26-12-87 36 days 20 MM 20-11-87 25 MM 102042 29-3-88 78 days 20 MM 11-01-88 25 MM 103419 11-10-88 195 days 25 MM 30-3-88
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106434 19-01-89 54 days 25 MM 26-11-88 38 MM 106721 9-5-89 142 days 25 MM 19-12-88 002784 31-01-89 22 days 25 MM 9-1-89 (Bom.) SELF ADHESIVE TAPE: 106720 8-4-89 - 1/2" 19-12-88 106433 19-01-89 54 days 2" 26-11-88
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Qty. Inv. Rate. Enhanced Value. R.F.
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26000 TM 0.165 70000 TM 0.195 76800 TM 0.165 16000 TM 0.195 80000TM 0.195 0.225 15000/- 48000TM 0.195 0.25 7000/- 22400 TM 0.30 0.40 80000 TM 0.195 0.25 12000/- ------------ 419200 TM ------------ 152000 TM 0.20 7500 1.65 dozen p. dzn. 21816 0.395 0.48 4000/- pcs. ------------ 111816 PCS. ------------
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He said that first import was made in November, 87 which was assessed and cleared by Customs Department taking 36 days accepting the declared value. Second shipment was referred to SIB to take considerable time and got cleared without enhancing the value by taking 78 days time. The items in question were cleared not only after inordinate delay but with enhanced value without any justification. He contended that Department is erred in relying upon the quotations of M/s. Hermanos Kaybee (HK) Ltd., Taiwan and M/s. M.S. Arora & Co., Jallandhar, Traders in determining the value of Hooks & Loops without disclosing these quotations to the party before concluding the proceedings. Such quotations cannot be relied upon as the quotation was neither a actual price nor issued by the Manufacturer/Exporter. The prices were quoted by the Traders for a small quantity. On the other hand, the appellants' import is directly from the Manufacturer/Exporter and that too for a larger quantity. He said that similarly department erred in relying upon invoice of M/s. Asia Chemical Corporation, Taiwan in determining the value of Adhesive tapes.
5. He also contended that value cannot be based on extraneous evidence in the absence of positive proof of under-valuation either with clandestine dealing or of clandestine remittance, particularly after amendment of Section 14 of the Customs Act. He said that transaction value refers to price actually paid or payable for the goods when sold for export to India and in this case invoice value is the transaction value as the transaction was genuine and neither excess consideration has been passed on to the supplier, nor there is allegation in the Show Cause Notice to that effect.
6. Shri Prabhat Kumar while countering the arguments submitted that since there has been a difference in between the invoice price and prices of similar imports the Department was justified in relying upon the invoices/quotation while determining the value of the goods at the time of importation. He said that under Section 14(1) of the Act, the value of the goods shall be deemed to be the price at which such goods or like goods are ordinarily sold or offered for sale at the time and place of importation in the course of International Trade. The concept of deemed value continues to be force even after amendment. Addition of Valuation Rules in LA to Section 14 of the Act will not take away the concept of deemed value but provides for determination of value as per procedure prescribed in the said rules subject to the provisions of Section 14(1) of the Act. He said that both the Section and Rules should be read harmoniously and even if there is any discrepancy in between the Act and the Rules, rules cannot over-ride the provisions of Section. He contended that since the words 'subject to the provisions of Sub-section (i)' have been used in amended Section 1A of Section 14, it is more clear that it is subject to the conditions of Section 14 and meaning of 'subject to' has to be understood as satisfaction of the conditions as it was held in the judicial pronouncements. He referred to the number of decisions in support of his contention.
7. On a careful consideration of the arguments advanced on both sides and on perusal of the records, we feel that we can dispose of these cases on the limited issue whether sufficient evidence was brought on record to arrive at the value while rejecting invoice value/transaction value without going into a number of controversies. In the view we have taken we do not feel it necessary to go into number of issues raised by both sides particularly with reference to concept of deemed value in genuine transaction before or after amendment of Section 14 of the Customs Act. It is well settled principles of law that burden lies on the Department to prove under-valuation. Under-valuation must be proved with corroborated evidence. It is not the case of the Department that there has been underhand dealing between the parties or that the price charged by the supplier is not fully commercial one. The contention of the Department is that concept of deemed value remains unchanged even after amendment and, accordingly, the value for the purpose of assessment of duty would be the deemed value as provided for under the said Section even if the invoice price is proved to be true price as agreed between the parties, for it is the International Market price which is the 'value' for the purpose of customs duty. In that case Department should come out with evidence of comparable quantities of the same product of the Country of the same origin have been imported at relevant point of time. In the instant case the Department is mainly relying upon the price list issued by M/s. Hermanos Kaybee (HK) Ltd., Taiwan, dated 7-3-1988 wherein the price of 25 mm and 38 mm size of Hooks and Loops was indicated as US $ 0.25 and US $ 0.40 per pair metre (CIF Bombay) while determining the value of Hooks & Loops. We find that this is not an invoice but a price list. Apart from the time gap and issued by other than manufacturer/Exporter, we find that this quotation refers to 10,000 Meter as against huge quantity of more than 4 lacs Twin Metres supplied by the Exporter and this price list cannot be taken as basis to arrive the value as it was rightly argued by the appellants. Similarly, the Department is relying upon the invoice of Asia Chemical Corporation dated 28-2-1987 of a smaller quantity while determining the importation of larger quantity as per bill of entry dated 26-11-1988. In fact in the covering letter addressed to Departmental Representative it was clearly mentioned "that no import of adhesive tape of the specifications mentioned in the telex is noticed in this Customs House during the year 1988. However, an import invoice dated 28-2-1987 in respect of the above item was in the possession of the Assessing Officer. The same is enclosed for ready reference". Under these circumstances, we do not find any justification in taking the invoice dated 28-2-1987 as basis to arrive at the value of the imports in question. The charge of underinvoicing has to be supported by evidence of prices of contemporaneous imports of like kind goods. Considering the circumstances existing in this case, we order that in the absence of any evidence to support the enhancement of the value, the invoice value should be accepted.
8. During the course of arguments Shri Sawhney argued that issue relating to classification of the products in question also is required to be determined by the Tribunal as they were not correctly classified at the time of clearance. We are not inclined to go into that issue at this stage in view of the fact that this was neither an issue in the Show Cause Notice nor raised at any time during the adjudication proceedings before the Adjudicating Authority as it was rightly pointed out by the D.R. Further his requisition for grant of interest at the rate of 18% on the refund amount, if any, from the date of filing the appeal till the repayment also cannot be considered by the. Tribunal as there is neither such provision in the Statute nor Tribunal can grant such relief being a creature of the very Statute.
9. Thus, these three appeals are disposed of the above terms.