Custom, Excise & Service Tax Tribunal
M/S. Djp International vs C.C.(Icd), New Delhi on 1 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066.
Date of Hearing: 01.07.2015
For Approval &Signature :
Honble Honble Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No.C/656/2010-CU[DB]
[Arising out of Order-in-Appeal No.CC(A)/CUS/ICD/130/10, dated 28.09.2010 passed by the C.C.(Appeals), New Delhi]
M/s. DJP International Appellant
Vs.
C.C.(ICD), New Delhi Respondent
Appearance Shri Sanjay Kumar, Advocate - for the appellant Shri BB Sharma, DR - for the respondent CORAM: Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) Final Order No.52361/2015, dated 01.07.2015 Per Mr. R.K. Singh :
Appeal has been filed against Order-in-Appeal dated 20.09.2010 with upheld the Order-in-Original dated 02.03.2010 in terms of which the following order was passed:-
(i) I reject the assessable value declared by the importer under Rule 12 of the Customs Valuation (Determination of Price of the Imported Goods) Rules, 2007 and re-determine the assessable value of the goods imported vide Bill of Entry No.859631, dated 22.12.2009 as Rs.5,10,665/- in respect of the goods Ferrite Magnets under Section 14 of the Customs Act, 1962 read with Rule 8 of the Customs Valuation (Determination of Price of the Imported Goods) Rules, 2007.
(ii) I order to confiscate the goods, seized on 11.01.2010 and provisionally released on 18.01.2010 on execution of Bond and payment of differential customs duty for the said seized goods and for the past consignments also. However, I give an option to the importer to redeem the same on redemption fine of Rs.2,00,000/- (Rupees Two Lakhs only) under Section 125 of the Customs Act, 1962.
(iii) I demand and order to recover the differential duty amounting to Rs.2,37,003/- evaded by M/s. DJP International, New Delhi under Section 28 (proviso clause) of Customs Act, 1962 and further order to appropriate the said amount of Rs.2,37,003/- already deposited by the importer vide TR-6 challan no.5607 dt. 18.01.10 towards payment of differential duty.
(iv) I impose a penalty of Rs.50,000/- (Rupees Fifty Thousand only) under section 112 and 114A of the Customs Act, 1962 on M/s DJP International, New Delhi. Since, the firm is proprietorship firm and penalty has already been imposed on the firm, I refrain from imposing penalty on the Proprietor.
(v) I demand and order to recover the interest on applicable rates under section 28AB of the Customs Act, 1962.
2. The facts briefly stated are that the appellant imported ferrite magnets (parts of speakers), Paper Cone, Epoxy, Resin, etc. against Bill of Entry No.859681 dated 22.12.2009 classifying them under Customs Tariff Head 8505. On examination, it was found that the wieght of the consignment was under-declared by about 9 tonnes. This fact was confirmed in the Panchnama. Statement Mr. Arbind Kumar, proprietor of appellant not only voluntarily accepted the fact of mis-declaration of weight but also admitted that the goods were undervalued to the extent of 20%. He further admitted that he had imported 28 such consignments in the past and undervalued them to the extent of 8% to 10%. He expressed his agreement with the content of the Panchnama and also accepted the contents of the chart of its imports in the past under 28 Bills of Entry showing the differential duty arising as a result of enhancement of value by 10%. He also categorically agreed to voluntarily pay the differential duty in respect of all the consignments along with redemption fine and penalty. He requested that the Show Cause Notice may not be issued and he did not want any personal hearing.
3. The appellant has essentially contended that (i) the difference in weight does not have any bearing on the valuation of goods, (ii) the valuation done by the adjudicating authority is against the express mandate of Valuation (Determination of Price of Imported Goods) Rules, 2007; a couple of judgements were cited in this regard which are referred to in the following paras (iii) the statement was recorded in the compelling circumstances (iv) the order was issued in violation of the principles of natural justice and (v) the redemption fine imposed is excessive and no penalties is imposable.
4. The Revenue contended that having voluntarily admitted the short levy and having also paid the same and having requested for not being issued a Show Cause Notice, it is not open to the appellant to claim that the principles of natural Justice had been violated and that the valuation has not been done in accordance with the provisions of law.
5. We have considered the contentions of both sides. We find that as per the Panchnama drawn on 11.01.2010 the under declaration of weight by about 9 tonnes is clearly established. The proprietor of the appellant himself admitted that the weight was under-declared and that the goods imported vide Bill of Entry No. 859681 dated 22.12.2009 were undervalued to the extent of 20%. He also voluntarily admitted that in case of past similar consignments the undervaluation was to the extent of 8% to 10%. Not only that when the chart containing the details of all the 29 Bills of Entry along with the details of duty short paid computed on the basis of treating that the goods as undervalued by 10% was shown to the proprietor of the appellant, he agreed with the same and categorically added that he was ready to pay differential customs duty, fine and penalty. He also made a specific request that the Show Cause Notice may not be issued and he did not want any personal hearing. In these circumstances, to question the adjudication order on the ground that the principles of natural Justice had been violated is totally untenable. Principles of natural justice (nobody should be condemned unheard) essentially require that the person charged should be given an opportunity of being heard, but the said person has all the rights not to avail of the opportunity of being heard and/or voluntarily forego the same. Further, having voluntarily accepted the valuation and having expressly forgone the requirement of Show Cause Notice and personal hearing, it is not open to the appellant to question the valuation at this stage and also by voluntarily admitting undervaluation and the short levy as per the chart which has been reproduced in the primary adjudication order, the value adopted for computing the short levy became the true transaction value declared by the proprietor of the appellant himself. The Supreme Court judgements in the case Eicher Tractors Ltd. Vs. C.C., Mumbai [2000 (122 ) ELT 321 (SC)] and CC, Calcutta Vs.South India Television [2007 (214) ELT 3 (SC)] cited by the appellant do not come to his rescue. In those judgements, the Supreme Court held that the valuation has to be determined in accordance with the Customs Valuation Rules, 1988. This legal position is well settled but the legal requirement to do so arises only when there is a lis or dispute about valuation. In the present case there was no lis; the proprietor of the appellant having admitted to the valuation and having forgone the requirement of a show cause notice or personal hearing. It is pertinent to mention here that the said voluntary statement of the proprietor was never retracted and even during the proceedings before Commissioner (Appeals) the plea that the statement was taken under duress was not taken. In the case of Vikas Spinners Vs. CC, Lucknow [2001 (128) 143 (TRI Del],CESTAT, dealing with a similar situation, held as under:-
7.In our view in? the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per Kg. but the same was not accepted and loaded to US $ 0.50 per Kg. This loading in the value was done in consultation with Shri Gautam Sinha, the Representative and Special Attorney of the appellants who even signed an affirmation accepting the loaded value of the goods on the back of the Bill of Entry dated 7-5-1999. After loading of the value, the appellants produced the special import licence and paid the duty on the goods accordingly of Rs. 4,22,008/- on 19-5-1990. Having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection they are legally estopped from taking somersault and to deny the correctness of the same. There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods. The ratio of the law laid down by the Apex Court in Sounds N. Images, (supra) is not at all attracted to the case of the appellants. The benefit of this ratio could be taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly. (emphasis added)
6. Thus, while the appellants contentions about valuation and differential duty are totally untenable, we do observe that redemption fine of Rs. 2 Lacs has been imposed on the goods imported vide Bill of Entry No. 859681 on which the differential duty works out to only Rs.13,103/- computed on the basis of undervaluation of 10%. As the redemption fine as a general principle has a nexus with the margin of profit and the goods were otherwise freely importable, we find the redemption fine to be excessive in the wake of the facts that the duty evaded due to undervaluation was only Rs.13,103/-. We are of the view that given the level of undervaluation (just 10%) and the amount of duty sought to be evaded (Rs.13,103/-), redemption fine of Rs.20,000/- is reasonable. However as penalty has been imposed in view of the duty evaded on imports under all the 29 Bills of Entry, the penalty of Rs.50,000/- cannot be said to be unreasonable warranting appellate intervention.
7. In the light of the foregoing discussion the appeal is partly allowed only to the extent of reducing the redemption fine from Rs. 2 Lacs to Rs.20,000/-.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) SSK -2-