Custom, Excise & Service Tax Tribunal
Sunrise Enterprise vs Commissioner Of Customs (Import), ... on 15 June, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal Nos. C/308, 309 & 310/03 (Arising out of Order-in-Original CAO No. 12/2003/CAC/CC I/A.H. dated 30.1.2003 passed by Commissioner of Customs (Import), Mumbai.) For approval and signature: Honble Mr.P.G. Chacko, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
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1. Sunrise Enterprise
2. Arun Kumar Badgamia *
3. S.K. Maruti Appellant (Represented by: None for appellant 1st & 3rd. Appellant 2nd in person) Vs Commissioner of Customs (Import), Mumbai Respondent (Represented by: B.P. Pereira, JDR) CORAM:
Honble Mr.P.G. Chacko, Member (Judicial) Honble Mr. Sahab Singh, Member (Technical) Date of Hearing : 15.06.2011 Date of Decision: 15.06.2011 ORDER NO..
Per: P.G. Chacko
1. These appeals are directed against the Commissioners order confiscating certain goods imported in the name of M/s Sunrise Enterprises, imposing penalties on the appellants including M/s Sunrise Enterprises etc. There is no representation for M/s Sunrise Enterprises (appeal No. C/308/03), or the proprietor (Appeal No. C/310/03) today. However, they have filed written submissions with a request to consider the same and dispose of their appeals on merits. The covering letter for these written submissions specifically prays for dispensing with personal presence. The appellant in appeal (C/309/03) appears in person and reiterates the grounds of his appeal.
2. We have considered the submissions of Mr. Arun Kumar Badgamia (C/309/03) and the written submissions filed by the other appellants. We have also heard the learned JDR and considered his submissions.
3. A Bill of Entry was filed on 25.9.2002 by the CHA for M/s Sunrise Enterprises for clearance of a consignment consisting of Buckles, AAA Pencil Cells and Bazel Sets without movement, totally valued at USD 11,775 (CIF Mumbai), imported from Hong Kong and covered by suppliers invoice dated 26.8.2002. On first-check, it was found that the importer had not included in the Bill of Entry certain other goods viz, Metal Straps, Button Cells, Bazels with Straps and complete wristwatches which were found in 124 cartons. Subsequent 100% examination by SIIB revealed that the imported consignment consisted of the following goods:
(a) Belt Buckles
(b) AAA Pencil Cells (small size)
(c) Bazel Sets:
(i) Parts of Wrist Watches
(ii) Complete Watches
4. Bazel Cells and Buckles were declared in the Bill of Entry. Bazel sets alongwith parts of wristwatches such as straps, crowns, hands, glasses, dials etc were described in the Bill of Entry as Bazel sets without movement. 11041 pieces of complete wristwatches were not declared at all. Thus, the 100% examination of the goods disclosed misdeclaration of description and quantity of goods. SIIB also conducted investigations into suspected undervaluation of the goods. They compared the declared prices with those of identical/similar goods contemporaneously imported during April to September 2002 as disclosed by NIDB, whereupon the investigating agency found that the declared values were much lower than the contemporaneous import prices. As part of further investigations, statements of Shri S.K. Maruti, proprietor of M/s Sunrise Enterprises and Shri Arun Kumar Badgamia, whose name was mentioned by Shri. S.K. Maruti, were recorded under Section 108 of the Customs Act. Shri S.K. Maruti stated, inter alia, that Sunrise Enterprises was a firm setup by Shri. Arun Kumar Badgamia, that he (S.K. Maruti) was only signing documents as per instructions of Shri Arun Kumar Badgamia, that he did not have knowledge of any import or export, that he did not know the whereabouts of the goods, that the bank account for Sunrise Enterprises was opened and operated by Shri Arun Kumar Badgamia, that he was only signing cheques whenever instructed by Shri Arun Kumar Badgamia, that he was paid a salary of Rs 3000 per month by Shri Arun Kumar Badgamia. In his statement, Shri Arun Kumar Badgamia corroborated the version given by Shri S.K. Maruti. Further, when confronted with NIDB data of contemporaneous import prices, Shri Arun Kumar Badgamia accepted those higher prices as under:
(a) Assorted Belt Buckles : HKD 16 per dozen
(b) AAA Pencil cells (small size) : Rs.0.50 per piece
(c) Bezel Sets:
(i) Parts of Wrist Watches : Rs 15 per piece
(ii) Complete Watches : Rs 40 per piece
5. SIIB also found that similar consignments had been imported in the name of M/s Sunrise Enterprises through Nava Sheva around the same time and that the importer had accepted similar enhancements of value proposed by the department. On the basis of the results of investigations, the Customs authorities proposed to proceed against M/s Sunrise Enterprises and the aforenamed persons for alleged misdeclaration of description, quantity and value of the imported goods. At this juncture, the parties waived show-cause notice and requested for early adjudication. Accordingly, the learned Commissioner of Customs (Import) passed the impugned order after hearing them. The learned Commissioner confiscated 11041 pieces of complete wristwatches valued at Rs 4,46,056, in terms of Section 111 (l) of the Customs Act with option for redemption against fine of Rs 2 lakhs under Section 125 (1) of the Act. Confiscation of Bazel Cells valued at Rs 2,16,000/- was also ordered in terms of Section 111 (d) and (m) of the Act with option for re-export against payment of a fine of Rs 25,000/-. Penalties of Rs 50,000/- and Rs 25,000/- were imposed on Shri Arun Kumar Badgamia and Shri S.K. Maruti under Section 112 (a) and Section 112 (b) of the Act respectively. The present appeals are directed against the Commissioners order.
6. Shri Arun Kumar Badgamia submits that the penalty of Rs 50,000/- was imposed on him without any reason whatsoever. On a perusal of the impugned order, we have found no semblance of reason for the penalty on him. His appeal is liable to be allowed. It is ordered accordingly.
7. The Revenues case for penalty on Shri S.K. Maruti is no better inasmuch as the impugned order does not disclose any reason for the penalty of Rs 25,000/- imposed on him. His appeal is also allowed.
8. Insofar as the appeal of M/s Sunrise Enterprises (hereinafter called the assessee) is concerned, the situation is quite different. The oral evidence given by Shri SK. Maruti and Shri Arun Kumar Badgamia strikingly corroborates each other with the result that Shri Arun Kumar Badgamia stands projected as de facto importer. Shri Arun Kumar Badgamia, in his statement, categorically accepted the enhanced value of the various items imported in the name of M/s Sunrise Enterprises. Of course, there is a feeble submission to the effect that the proposed enhancements were accepted only to avoid delay of clearance of the goods considering the heavy detention charges and other expenses. This submission is unacceptable. Yet another submission made on behalf of the assessee is that a request for amending the Bill of Entry was made before the assessing authority after obtaining information from the foreign supplier about wrong shipment of wristwatches and that this request was not considered. It is also submitted that a computer printout showing contemporaneous import prices for similar/identical goods had also been furnished by the assessee but the same was also not considered. It appears from the records that these submissions have been made in passing without any serious purport. In any case, the appeal of the assessee is not accompanied by any copy of their application which is said to have been filed under Section 149 of the Customs Act. However, the written submissions are accompanied by a statement of comparative data (other importers) giving what is claimed to be contemporaneous import prices of Buckles and Bazel sets without movement. We find that this kind of material was not furnished or referred to by Shri Arun Kumar Badgamia at the time of giving confessional statement under Section 108 of the Customs Act. Once enhanced value was accepted under Section 108 of the Customs Act, no further proof was required for the Customs authorities to assess the goods, particularly as the confessional statement was never retracted. In this connection, a decision of the apex court cited by the learned JDR is relevant. In the case of Commissioner vs Systems and Components Pvt Ltd 2004 (165) ELT 136 (SC), the Honble Supreme had ruled thus: It is a basic and settled law that what is admitted need not be proved.
9. In view of this binding ruling of the apex court, the objections raised against loading of value of the imported goods, in the assessees appeal, are only liable to be rejected. The assessable value determined in the impugned order is unassailable in the aforesaid circumstances.
10. That 11041 pieces of wristwatches were not specifically disclosed in the Bill of Entry is indisputable. Such goods are liable to confiscation under Section 111 (l) of the Customs Act. As regards 8,64,000 pieces of AAA Pencil Cell, this item was declared in the Bill of Entry but its value was misdeclared. Further, the import of this item was in breach of the relevant provisions of the Exim Policy on account of the fact that these goods did not conform to BIS Standards. The written submissions filed by the assessee are silent on this aspect. Therefore, the confiscation ordered by the Commissioner in respect of the Pencil Cells under Section 111 (d) and (m) of the Customs Act cannot be interfered with. The Commissioner allowed option to re-export this item against payment of fine of Rs 25,000/- Considering the value of the Pencil Cells, we reduce the quantum of fine to Rs 20,000/-. However, in respect of the wristwatches numbering 11041, which were not disclosed in the Bill of Entry at all, a different standard needs to be adopted in the context of examining the legality and propriety of the quantum of fine determined by the adjudicating authority. The value of these goods is Rs 4,46,056/-. Considering the value of the goods and relevant facts and circumstances of the case, we are inclined to reduce the quantum of fine from Rs 2 lakhs to Rs 1.50 lakhs.
11. With aforesaid modifications in the impugned order, the assessees appeal is disposed of.
(Dictated in Court.) (Sahab Singh) Member (Technical) (P.G. Chacko) Member (Judicial) rk 8