Customs, Excise and Gold Tribunal - Delhi
Rajnath Motors (P) Ltd. vs Commissioner Of Customs on 17 April, 2000
Equivalent citations: 2000(118)ELT598(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal filed by M/s. Rajnath Motors P. Ltd. is whether the tyres imported by them were freely importable without licence as tyres meant for truck and whether tyres were under valued.
2. Briefly stated the facts are that the Appellants filed a Bill of Entry 924527, dated 10-10-1995 for clearance of a consignment of 65 Bridgestone tyres of assorted sizes. In their letter dated 26-10-1995 the appellants declared that tyres of Rim size 15" were suitable for DCM Toyota Swaraj Mazda, Canter and Tyres of Rim sizes 15" and 16" were also used on light trucks, Tata 407 and vans of various make and other commercial vehciles. The Additional Commissioner, Customs, in the Adjudication order dated 19-12-1995, after referring to the Pattern Digest 94-95 of Bridgestone Brand of Tyres and the specification as observed from the inscription on the tyre as also on the text attached thereon, came to the conclusion that none of the tyres imported had been classified as bus or truck tyres in the catalogue of the manufacturers as submitted by the Appellant; that these are either Passenger car tyre or tyres for light trucks, vans and station wagons and as such were not freely importable under EXIM Policy. The Additional Commissioner also found that the Mail order catalogue prices, after allowing a deduction of 25%, were high between 2l/2 to 5 times of the declared prices; that even the freight for the impugned consignment was higher than the CIF price declared by the Appellants. The Additional Commissioner determined the valuation of the tyres on the basis of mail order catalogue prices and allowed a discount of 40%. He confiscated the tyres with an option to redeem the same on payment of fine of Rs. 1,00,000/-; imposed a penalty of Rs. 50,000/- on the Appellants, valued the goods on the basis of Mail order catalogue after allowing a deduction of 40%. On appeal, the Commissioner (Appeals) rejected the appeal, holding that the Bridgestone "Pattern Digest" and the "Goodyear Buyers Guide" show that truck tyres constitute a different category of tyres and specifications of truck tyres never figure in the Section where specification for tyres for light commercial vehicles are given; that there is a separate section for 'light commercial vehicle' and a separate section for 'bus and truck tyres' and in section dealing with truck tyres, there is no reference to tyres for light trucks or light commercial vehicles; that entry at Sr. No. 8 of the Exclusion list below para 156 of EXIM Policy clearly relates only to Tyres for buses, trucks and earth moving machinery' and as tyres for trucks are commercially recognised as a category distinct from light commercial vehicles tyres, tyres were imported in violation of Section 11 of the Customs Act read with Foreign Trade (Development and Regulation) Act and Export-Import Policy. Regarding Valuation, the Commissioner held that as the appellants failed to submit any evidence to establish that the invoice prices represented the prices at which goods were ordinarily sold and where the invoice falsely suggested that the goods imported were old/used tyres, by describing them as 'stocklot' and did not provide the unit price of the tyres, the Assessing Officer rightly disregarded the declared value and determined the value under the provisions of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988.
3. Shri K.K. Anand, learned Advocate, submitted that the tyres imported by the appellants could be used in sophisticated cars and commercial vans manufactured for use in developed countries like U.S.A., Japan and Germany; as far as India is concerned the use of such tyres were confined to trucks/buses etc.; that these tyres were meant to be used in light motor vehicles like Toyota, Mazda etc.; that light commercial vehicles are also included in the definition of truck; that the meaning of truck could not be restricted so as to take out from its purview the light commercial vehicles; that in the examination report these tyres have been noted as tyres meant for matadore; that Hongkong Corporation Ltd., Distributor of Bridgestone Tyres, in their letter dated 12-1-1996, has clearly clarified that the tyres made by Bridgestone are used as tyres for light trucks in developing countries like India, Burma, Pakistan, Africa etc. and they were supplying these tyres as light truck tyres to these markets. Learned Advocate further submitted that neither in the Customs Act nor in the Import Export Policy definition of truck has been given and accordingly in absence of any definition, Dictionary meaning has to be referred to; that according to Chambers Dictionary, Truck means/ "A motor vehicle of heavier construction than a car designed for the transportation of the commodities, or often a specific commodity; A lorry (Esp USA)"; that further Motor Vehicle Act also refers only to Heavy Goods Vehicle and Light Motor Vehicle; that according to Section 2(21) of Motor Vehicles Act "Light Motor Vehicle means, a transport vehicle or omni-bus the gross vehicle weight of either of which or a motor car or tractor or road roller the unladen weight of any of which does not exceed 7500 kgs." He further mentioned that when a general term is used it will include everything and the reliance was placed on the decision in the case of Commissioner of Sales Tax v. Agarwal & Co. -1983 (13) E.L.T. 116 (Bom.) and Indian Tool Mfg. Co. v. C.C.E., Pune, 1984 (18) E.L.T. 527, wherein it was held that while interpreting a general term used for describing a commodity in any fiscal legislation, general term so used covers that commodity or item or article in all its forms and varieties. Learned Advocate also mentioned that impugned tyres were purchased as a stock lot, the value declared by them was CIF value which includes freight; that the department could not discard the invoice price in absence of any evidence that it was not a correct price; that adopting retail consumer price inclusive of local taxes and charges could not be considered for arriving at the assessable value; that as they have purchased the goods in wholesale and the transaction value is available and there is no allegation of underhand dealings the Department is not right in adopting the price mentioned in Mail order. He relied upon the decision in the case of Collector of Customs, Chandigarh v. Hind Afgan Co., 1986 (23) E.L.T. 270 (Tribunal) wherein it was held that invoice prices are acceptable when there is no proof that the quoted prices in newspapers relates to comparable goods in international market. He also relied upon the decision in the case of Kailash Chander Jain v. Collector of Customs, Cochin, 1996 (86) E.L.T. 529 and Mirah Export Pvt. Ltd. v. Collector of Customs, 1998 (98) E.L.T. 3 (S.C.), wherein it was held by the Apex Court that the burden of proving a charge of undervaluation lies upon the Revenue and "ordinarily the Court should proceed on the basis that the apparent tenor of the agreement reflects the real state of affairs and what is to be examined is whether the Revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price." Finally he relied upon the Final Order No. 908/97-A, dated 20th May, 1997 in the case of Bhagwan Electro Photocopier v. C.C., New Delhi.
4. Countering the arguments Shri K. Shiv Kumar, learned DR submitted that neither Bill of Entry filed by the appellants nor the invoice brought by them mentioned the impugned goods as truck tyres; that in the invoice dated 18th August, 1995 issued by Malaysia Trading Corporation, the impugned goods were described as "car tyres (assorted sizes)". He further mentioned that the Pattern Digest 94/95 of Bridgestone mentioned four types of vehicles; that light commercial vehicle is different from truck and as such the imported tyres cannot be treated as truck tyres. He also emphasised that imported tyres can be used for passenger cars and as such they were not freely importable. Regarding value, he reiterated the findings of both the lower authorities and submitted that no individual price of the tyre was mentioned; only total price was indicated; that freight paid by them is substantial and therefore, it has to be included in the assessable value in absence of any invoice of the manufacturer produced by the appellants.
5. We have considered the submissions of both the sides. The adjudicating authority has proceeded on the basis that the sizes of the tyres imported by the appellants were not mentioned in the Pattern Digest of Bridgestone in the category of tyres meant for truck and bus and tyres mentioned at Sr. Nos. 4 to 7 and 9 are meant for passenger car whereas tyres mentioned at Sr. Nos. 1, 2, 3 & 8 are meant for light trucks, vans & station wagons. As far as tyres mentioned at Sr. Nos. 1, 2, 3, & 8 are concerned these are meant for light truck, vans, station wagon and it cannot be claimed that these are not truck tyres. The learned advocate has clearly brought out that the word truck has not been defined in the Customs Act, Import Export Policy and even in the Motor Vehicles Act. According to the Chambers Dictionary truck means, "A motor vehicle of heavier construction than a car designed for the transportation of the commodities, or often a specific commodity; a lorry (Esp USA)" and the contention of the appellants that these tyres were meant for use in Mazda, Toyota etc. has not been controverted. In view of this, these tyres at Sr. Nos. 1, 2, 3 & 8 are to be regarded as tyres meant for trucks. However, in respect of other Sr. Nos. 4 to 7 & 9 these tyres are meant for car as per the Pattern Digest of Bridgestone and the contention that these tyres will be used in light commercial vehicle in India will not make them truck tyres when they are known as car tyres. In respect of these tyres we agree with the decision of the lower authorities that they were not freely importable and these are liable for confiscation as imported in contravention of Import Export Policy. We observe from the invoice that the price of 65 tyres has been shown as Dollar 4000 CIF Delhi. The adjudicating authority has enhanced the assessable value taking into consideration the Mail order catalogue of M/s. Dunlop. As per Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules 1988 the transaction value of imported goods shall be the price actually paid or payable for the goods and it shall be accepted unless anyone of the situation mentioned in the proviso to Rule 4(2) is present. We observe that it is not the case of the Revenue that any of the situation mentioned in the said proviso is present in the present matter. In the absence of any of these situations the transaction value has to be accepted. We also observe that the appellants had purchased the impugned goods as a stock lot and the price of such goods cannot be compared with the prices mentioned in the Mail order catalogue that too of a different company manufacturing tyres. The Apex Court in Mirah Export Pvt. Ltd. (supra) has held that the burden is on the Revenue to prove the charge of undervaluation. In the present matter the only evidence that has been adduce in support of the charge of under valuation is the Mail order catalogue of Dunlop Company which, as observed earlier, is not comparable with the goods imported. The Tribunal also in the case of Kailash Chand Jain (supra) did not consider the lesser quantity as comparable goods for large consignment imported by the appellants therein. Accordingly, there is no reason to discard the transaction value. In the light of these findings we remand the matter to the adjudicating authority for determining the redemption fine and amount of penalty. The appeal is disposed of in the above terms.