Customs, Excise and Gold Tribunal - Delhi
International Watch Trading Company vs Collector Of Customs on 29 September, 1988
Equivalent citations: 1989(39)ELT285(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. This is a Revision Application filed by the appellants against Order No. 323 of 1981, dated 15-7-1981, passed by the Central Board of Excise and Customs, New Delhi. On the setting up of the Tribunal, this has been transferred here and is being treated as an appeal before the Tribunal.
2. This is a case of import of 1682.5 gross main springs for wrist watches as against declared description of High Carbon Steel Strips.
3. We have heard Shri S.D. Nankani, advocate for the appellants and Shri A.S. Sunder Rajan, JDR, for the department.
4. The department's case is that as a result of an information received by the Directorate of Revenue Intelligence, the residential premises of both the partners of the appellant company were searched on 16-2-1979 and some incriminating documents were seized. Thereafter, the packages in question were examined. While two of the three packages were found to contain goods as declared viz. steel strips, the third package was found to contain main springs of wrist watches. In lieu of 183 Kgs. of steel strips as shown in the packing list, actually, there were only 38.5 Kgs. of strips and 1682.5 gross quantity of main springs.
5. Shri Nankani has emphasized the main point as made also before the lower authority that the supplier had made a mistake of shipping main springs, as they did not have strips. It is also said that the main springs imported are not co-relateable with the invoices. In fact, the two proforma invoices relied upon by the department for the purpose of ascertaining the value of the main springs are said to be of no relevance as they are of a different manufacturer and are unbreakable stainless white alloy main springs of calibres different from those imported.
6. The learned advocate especially made the point that the department has held that there was a deliberate attempt to import highly restricted goods by concealment, thereby deserving penal action under Section 112 of the Customs Act, 1962. This finding, it is submitted, is not based on any allegation of concealment in the Show Cause Notice. The main springs were not concealed in any false bottom or cavities.
7. So far as the question of valuation is concerned, Shri Nankani complains that the department made certain market enquiries, but failed to disclose the result thereof to the appellants. This shows that their action was not in good faith and fairness.
8. Responding, Shri A.S. Sunder Rajan, JDR submits that looking at the facts of the case, there can hardly be any doubt that the appellants had acted in deliberate violation of law. Action was taken by the department in accordance with intelligence received. Highly incriminating documents were seized from the residence of the partners. It is established that the importer went abroad and it was only shortly after his visit that the goods were despatched. It is also submitted that there was deliberate mis-declaration in respect of the goods imported, as the description correctly answered goods in only two packages.
9. We have carefully considered the facts of the case and the submissions made before us. We queried from the learned advocate repeatedly as to how he would satisfy us that the exports of the main springs alongwith the stainless steel strips were undertaken by the supplier on his own without consulting them. What is more, if this was a case of genuine supply, there was no reason why the packing slips should not have included the main springs that had been packedLalongwith the steel strips. All this would show that there was a deliberate attempt to clear the main springs as a part of the steel strips consignment.
10. We also asked Shri Nankani as to what was the concern shown by the appellants when they found that the suppliers had sent large quantities of main springs instead of strips. The residential premises of the partners of the firm were searched on 16-2-1979 and it is only on 16-3-1979 that a letter was sent to the suppliers asking them to explain. We considered the reply of the supplier dated 28-3-1979 also to be very strange and it hardly goes in favour of the appellants. It does not say that there was any mistake in sending the watch main springs. Ail that it says is that they had only 405 Kgs. of strips and that, therefore, they sent 145 Kgs. of watch main springs also. No supplier in his senses can make any supply and despatch goods without prior indent or orders. In his statement dated 15-3-1979, Shri Ehsan Abbas Hakim, one of the partners said that he was not even aware as to what instructions he had given to the suppliers. He also admitted that he had not written any letter to the suppliers protesting against wrong despatch of goods. We observe that it Is only after the Customs had recorded the partner's statement on 15-3-1979 that appellants realised that it would be necessary to ask the suppliers to explain in order to strengthen their claim that they were not involved in the illicit imports.
11. We also find that the documents recovered from the premises of the appellants, including a diary and the letters, are highly incriminating and there is no satisfactory explanation in regard to them.
12. Now, coming to the question of valuation, we find that the department has taken into consideration two proforma invoice of M/s. Fabrique De Ressorts Pour Montres. These two invoices have been held by the department to be relateable to the importer order of 14-12-1977. It is observed that when queried about this, Shri Hakim had stated that he did not remember anything about it and that he would state the facts later on. However, no further explanation was forthcoming. It is observed that the examination showed that the watch parts found were identifiable with some of those in the proforma invoices. Now, Shri Nankani submitted before us on the one hand that the invoices do not relate to the supplier of the goods and on the other hand, he made the point that the invoices are for new goods only and the valuation is not applicable to the goods imported. There is no submission made on the Collector's finding that there are markings on the boxes received by the appellants which shows the goods as being from M/s. Fabrique De Ressorts Pour Montres. On the other hand, as the Collector has rightly observed in his order, the correspondence with M/s. Favre & Cie is no clue to the valuation. Nor have the importers been able to establish their claim to any other correct valuation. It is also noted by the Collector that the total of the quantity in the two proforma invoices, when added together, amounted to 1600 gross, which was an approximate quantity found in Case No. 1, from which the impugned goods were recovered. In this background, the Collector's orders in regard to valuation have to be upheld.
13. Shri Nankani made two other points. Firstly, he stated that the letter from M/s. Favre & Cie dated 28-3-1979 was not withdrawn by the appellants. Their reaction when the letter produced before the Collector was only on account of the threat held out to them. It is submitted that there is no finding of the Collector that it is false. It should, therefore, be considered on its own merits, it is submitted. We find this submission very strange and wholly untenable. Appellants have not challenged the factual accuracy of what is recorded in regard to this letter of 28-3-1979 in the order of the Collector of Customs. It is quite clear that on production of the documents before him, the Collector had taken the view that the document was false. He also put it to the appellants that if they insisted on relying on the document, they should be prepared to face any action that the department might take, including prosecution for production of a false document before an officer of Customs. Appellant's advocate, after consulting the clients, it is recorded, did not insist on the acceptance of this letter as an evidence. Shri Nankani does not say that he had made any submissions against the observations of the Collector in this regard while in appeal before the Central Board of Excise & Customs. His contention that now this letter should be considered as not withdrawn, has, therefore, to be rejected.
14. The other point made is that the Collector of Customs, in his order, holding that there was a deliberate attempt to smuggle the main springs for wrist watches, has also held that this was done by concealing them in Case No. FC-1, which was not alleged in the Show Cause Notice. The substantive allegation was the attempt to smuggle the wrist watch parts and this has been examined in depth before the learned Collector has held that it is proved. In this process, the Collector has made an observation that the means adopted was by concealing such parts in Case No. FC-1. This will not vitiate his order.
15. In the circumstances, we see no reason to interfere with the order of the Central Board of Excise & Customs upholding the order of the Collector of Customs.
Appeal dismissed.