Custom, Excise & Service Tax Tribunal
Sound Of Music vs New Delhi(Prev) on 1 May, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH,
COURT NO. I
CUSTOMS APPEAL NO. 2654 OF 2012
[Arising out of the Order-in-Original No. 20/SU/Commr./2012 dated
29/05/2012 passed by The Commissioner of Customs (Preventive), New
Delhi.]
M/s Sound of Music ......Appellant
N-61, Greater Kailash - I,
New Delhi - 110 048.
Versus
Commissioner of Customs, ....Respondent
(Preventive), New Customs House, Near IGI Airport, New Delhi - 110 037 WITH CUSTOMS APPEAL NO. 2655 OF 2012 [Arising out of the Order-in-Original No. 20/SU/Commr./2012 dated 29/05/2012 passed by The Commissioner of Customs (Preventive), New Delhi.] M/s Ali Trading Exposition, ......Appellant N-61, Greater Kailash - I, New Delhi - 110 048.
Versus Commissioner of Customs, ....Respondent (Preventive), New Customs House, Near IGI Airport, New Delhi - 110 037 AND CUSTOMS APPEAL NO. 2656 OF 2012 [Arising out of the Order-in-Original No. 20/SU/Commr./2012 dated 29/05/2012 passed by The Commissioner of Customs (Preventive), New Delhi.] M/s Lexicon Infosys ......Appellant N-61, Greater Kailash - I, New Delhi - 110 048.
Versus Commissioner of Customs, ....Respondent (Preventive), New Customs House, Near IGI Airport, New Delhi - 110 037 2 CUS/2654-2656 OF 2012 APPEARANCE:
None for the appellant.
Shri Shashi Kant Sharma, Authorized Representative for the Department CORAM:
HON'BLE JUSTICE MR. DILIP GUPTA, PRESIDENT HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) FINAL ORDER NO. 50737-50739/2025 DATE OF HEARING/DECISION : 01.05.2025 P.V. SUBBA RAO The order dated 29.05.2012 passed by the Commissioner of Customs (Preventive), New Delhi1 is assailed by M/s Sound of Music, M/s Ali Trading Exposition and M/s Lexicon Infosys2 in these three appeals. These appeals were initially filed without making the pre-deposit but with stay applications. The appellants were asked by order dated 05.08.2013 to deposit the duty and penalty within 60 days and report compliance. Since, the appellants had not reported compliance these appeals were dismissed by Final Order dated 23.05.2014. The appellants filed Restoration Applications, which were dismissed on 09.11.2015 as none appeared.
Thereafter, the appellants again filed applications for restoration of appeals in 2016 which were allowed by order dated 28.11.2018 and the appeals were restored to their
1. impugned order
2. appellant 3 CUS/2654-2656 OF 2012 original number and were directed to be listed in due course. Thereafter, the appellants stopped appearing. When the matter was listed on 03.03.2025 a request for adjournment was received on medical grounds and therefore, these appeals were adjourned to today. It was also indicated in the order dated 03.03.2025 that since the appeals pertain to the year 2012 today shall be the last opportunity.
2. When the matter was called today, none appeared on behalf of the appellants nor is there any written communication. We have heard learned Authorized Representative for Revenue and perused the records.
3. Receiving intelligence that the appellants were evading duty by undervaluation of the transaction value and of the retail sale price, the Directorate of Revenue Intelligence3 started investigation. Searches were conducted and statements were recorded and it was found that the appellants had declared a much lower retail sale price in the Bills of Entry but actually sold the goods at much higher price. For instance, in Bill of Entry No. 695535 dated 18.05.2004 imported Plasma TV P-63XHA was declared to be of RSP as Rs. 3.60 lakhs but the same was actually sold for Rs. 10.95 lakhs. Several such mis-declarations of Retail Sale Price were noticed. E-mails were also found wherein the appellant had requested the overseas suppliers that a lower value be shown in the invoices
3. DRI 4 CUS/2654-2656 OF 2012 "for customs purpose". For instance, in an E-mail dated 29.12.2003 to one Mr. Jivani of the exporter by Mr. Hamid, the owner of the appellant firms requested for an invoice for 1/4 th of the actual value for customs purpose. Subsequently, Mr. Jivani had, thereafter, sent two invoices - one for Euro 13,155 (actual price) and another for EURO 2,790 (which was used for filing the Bill of Entry). After detailed investigation, the show cause notice proposed to recover duty along with interest and impose penalties. The proposals in the show cause notice were confirmed by order dated 14.10.2008 by the Commissioner of Customs (Preventive).
4. The appellant filed an appeal before this Tribunal on the ground that "Principles of Natural Justice" were not followed by the Commissioner. By an order dated 25.04.2011, this Tribunal directed the appellants to collect the Relied Upon Documents (RUDS) within a period of two months. Thereafter, the appellants were required to file their replies within 45 days before the Commissioner and the Commissioner was required to pass a reasoned order. The appellants did not collect the RUDs within two months i.e., by 23.07.2011, despite the Department sending repeated reminders. Finally, the appellants collected the documents only on 20.01.2012. They submitted an interim reply on 03.03.2012 and sought further time and more documents. The Advocate of the appellant was informed by the Department on phone on 03.04.2012 to come to office and collect the documents. This was followed up by 5 CUS/2654-2656 OF 2012 two letters dated 12.04.2012 and 27.04.2012, but they did not collect the documents. Personal hearings were fixed by the Commissioner on 15.03.2012, 09.05.29012 and 16.05.2012 and nobody appeared for personal hearing or made any written or oral submission. Therefore, the Commissioner examined the records of the case and the documents available and passed the impugned order. The operative part of the order is as follows :-
(i) "I confiscate the goods valued at Rs. 47,83,064/- (Rupees Forty seven thousand eight three thousand sixty four only) seized on 12.1.05, as detailed in para 1 above under Section III(d) and Section III (m) read with Section 118 of the Customs Act, 1962. However, I give an option to the party to redeem the same within 30 days after paying Rs. 20 lakhs (Rupees Twenty lakhs only) as redemption fine under Section 125 of the Customs Act, 1962. In view of Section 125 (2) of the Customs Act, 1962, customs duty amounting to Rs.
9,99,513/- (Rupees Nine lakhs ninety nine thousand five hundred and thirteen only) is required to be paid by the party in additional to the redemption fine at the time of redemption.
(ii) I confirm demand of Rs. 1,48,68,043/- (One crore forty eight lakhs sixty eight thousand forty three only) against M/s Sound of Music, N-61, Greater Kailash-I, New Delhi, under Section 28 of the Customs Act, 1962 as detailed in para 22 above. In ivew of Para 51E (i) of the SCN dated 11.7.05, I order that the amount of Rs. 14.50 lakhs voluntarily paid by M/s Sound of Music stands appropriated towards the confirmed dues against the party.
(iii) I confirm a demand of Rs. 5,40,481/- (Rupees Five lakhs forty thousand four hundred eighty one only) against M/s Ali Trading Exposition, N-61, Greater Kailash-I, New Delhi, under Section 28 of the Customs Act, 1962 as detailed in para 22 above.
6 CUS/2654-2656 OF 2012
(iv) I confirm a demand of Rs. 45,34,381/- (Rupees forty five lakhs thirty four thousand three hundred eighty one only) against M/s Lexicon Infosys, Near Amar Singh College, Wazir Bagh, Srinagar, J&K, under Section 28 of the Customs Act, 1962 as detailed in para 22 above.
(v) I impose a penalty of Rs. 1,48,68,043/- (One crore forty eight lakhs sixty eight thousand forty three only) against M/s Sound of Music, N-61, Greater Kailash-I, New Delhi, under Section 114A of the Customs Act, 1962.
(vi) Interest at appropriate rate is also required to be paid under Section 28AB of the CA, 1962.
(vii) I impose a penalty of Rs. 10 lakhs against Mr. Faisal Hamid, Proprietor of M/s Sound of Music, N-61, Greater Kailash-I, New Delhi, M/s Ali Trading Exposition, N-61, Greater Kailash- I, New Delhi and M/s Lexicon Infosys, earlier situated at Near Amar Singh College, Wazir Bagh, Srinagar, J&K, new address N-61, Greater Kailash-I, Windsor Mansion (Basement) New Delhi - 110 048 under Section 112 of the Customs Act, 1962".
5. In these appeals the grounds taken by the appellants are as follows :-
(i) The conclusion drawn by the Adjudicating Authority is perverse and no such conclusion could have been drawn;
(ii) The appellant has been denied Principles of Natural Justice as the order was passed without giving an opportunity to rebut and without cross-examination of the witnesses;
(iii) The RUDs and materials obtained from foreign sources by customs authorities are photocopies and 7 CUS/2654-2656 OF 2012 do not bear the signature of the exporter or the customs officers ;
(iv) The order is bad in law ; and
(v) The Adjudicating Authority had not applied his mind.
6. Learned authorized representative for the Revenue submits that all the requisite documents on which the show cause notice relied, were provided to the appellants. However, the appellants appeared before this Tribunal in the first round of litigation and again sought the RUDs. In the remand proceedings, every effort was made to supply them the documents, but the appellants did not collect the documents within the time stipulated by the Tribunal. After repeated reminders, the appellants collected the RUDs, but did not submit their replies within 45 days from that time, as directed by this Tribunal. They submitted an interim reply and sought some additional documents. Learned counsel was informed on phone as well as twice in writing to come and collect the required documents, but nobody collected the documents.
7. Three personal hearings were fixed, but neither did not anybody appear for personal hearing and nor has any written reply been filed. Under these circumstances, the Commissioner passed the impugned order which is fair and proper and calls for no interference.
8 CUS/2654-2656 OF 2012
8. We have considered the submissions in the appeal and the submissions of the learned authorized representative and perused the records.
9. We are in full agreement with learned authorized representative that in the first round of litigation when the appellants submitted that they had not received the RUDs, they were specifically given a time of two months to collect the documents and a time of 45 days thereafter to file the reply before the Commissioner. Despite repeated letters from the Department, the appellants had not collected the documents until 20.01.2012 i.e., almost seven months after the CESTAT's order. Instead of filing a reply thereafter, the appellant filed an interim reply and asked for more documents. The appellant's counsel was informed on phone and through letters to collect the documents, but they neither collected the additional documents which they wanted nor filed any reply. Three personal hearings were fixed on 15.03.2012, 09.05.2012 and 16.05.2012 by the Commissioner, but no submissions were made and none appeared.
10. We also note that the appellant's attitude remained the same thereafter. They filed these appeals before this Tribunal, but did not make the pre-deposit as directed. When the appeals were dismissed, they filed applications for restoration. The applications were allowed the appeals were restored on 28.11.2018. Thereafter, the appellants have not been 9 CUS/2654-2656 OF 2012 appearing before this Tribunal at all. On 03.03.2025, the appellants sent a letter seeking adjournment on medical ground, which was allowed and the matter was adjourned to today. None appeared today nor have any submissions been made.
11. Under these circumstances, the only proper course for us is to decide the matter on merits. This is one of the rare cases in which the Department has made efforts to collect actual direct evidence of under valuation. The appellants obtained two types of invoices for the same goods. The basic Customs Duty was payable on the disputed goods on the transaction value. In order to evade payment of basic Customs Duty, the appellants had requested the overseas supplier to send invoices for fraction of the actual transaction value "for customs purposes" and submitted those documents along with the Bills of entry. Thus, they evaded payment of basic Customs Duty. The officers of DRI along with their overseas network of officers obtained the invoices of actual value and accordingly the demands were made in the show cause notice and confirmed in the impugned order.
12. The second under valuation was mis-declaration of the Retail Sale Prices. The Additional Duty of Customs is payable on certain goods based on the Retail Sale Price of the goods with abatement. The appellant had declared a lower Retail Sale Price in its Bill of Entry and documents and evaded additional 10 CUS/2654-2656 OF 2012 duty of customs, but actually sold the goods at much higher price. Records of this undervaluation were found during investigation and were confirmed in the statements of the Proprietors of the appellants recorded during investigation.
13. In view of the above, we find that confirmed demand of duty evaded by the appellants is correct. Confiscation of goods under section 111 of the Customs Act for the mis-declaration and imposition of redemption fine in lieu thereof were also correct and proper for the reason. The penalties imposed under section 114A and 112 also call for no interference.
14. In view of the above, the impugned order is upheld and all appeals are dismissed.
(Order dictated and pronounced in open court.) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) PK