Customs, Excise and Gold Tribunal - Mumbai
Jai Bhagwati Impex Pvt. Ltd. vs Commissioner Of Customs And Central ... on 7 November, 2001
Equivalent citations: 2002(145)ELT158(TRI-MUMBAI)
JUDGMENT J.H. Joglekar, Member (T)
1. The main issue in this appeal is the quantum of fine to be borne by the marble imported by the present appellants. The fact that the goods were restricted import and that the appellants did not possess a specific authority to import the same is not contested. One of the issue agitated is the quantum of fine. The other issue in agitation is the enhancement of the declared value.
2. The appellants imported rough marble blocks of Iranian origin of various colours. The net weight declared was 1941.34 MTs. The customs adopted the gross weight of 2078.26 MTs. The value declared was US$ 75/- PMT. This was enhanced by the Commissioner to US$ 85/- PMT. The show cause notice alleged that the value should have been US$ 85/- CIF "upon enquiries made with various Custom House". In paragraph 3.0 of his order the Commissioner reiterated the allegation. He also held that "similar cargo was cleared from the CSF Pune" during the relevant period on the proposed enhanced value. On this ground he justified the escalation of price.
3. In terms of the Custom [Valuation] Rules the transaction value has to be accepted. However the Customs have the power to not to accept the transaction value in terms of the authority vested under Rule 10A of the said rules. The rule, however, requires an exercise to be undertaken by the authorities in rejecting the transaction value. No such exercise was undertaken. There is no justification for rejection of the transaction value. The mere observation that similar goods were cleared at a marginally higher price does not authorise the Customs to enhance the value especially where the goods are such as to have a wide range of pricing depending upon the country of origin, colour and various other criteria. In these circumstances we hold that the ad-hoc increase in the prices was not justified.
4. In arriving at the margin of profit the Commissioner has gone by the market enquiries. He has also observed that the transactions in marble would have some undisclosed cash element which may decide the selling price. He also observed that the goods had range of colours and the color stones would carry a price higher than the marble of white colour. On these considerations he took the value of white marble as Rs. 1,1000/- PMT and colour stones as Rs. 1,2000/- PMT and black stones as Rs. 15,000/- PMT. We, however, find that in the absence of colourwise bifurcation the Commissioner would be hard to put to the estimated total market price that the goods were capable of fetching. He thereafter fixed fine roughly of 150% of the CIF value.
5. Counsel at the time of hearing submitted that these goods were released pending adjudication in November, 1998 and the goods were disposed off by the importers while the future proceedings were pending. He submits that the invoices showing the sale of these consignments were placed before the Commissioner. This is evident from his observation from paragraph 4.4 of the order. He submits that when the actual prices at which these very goods were sold was available the Commissioner was wrong in adopting a fictional price. We find merit in the submission. The Commissioner has not disputed the sale of the goods. He observed that invoices produced before him accounted for 60% of the total value. He also observed that the invoices do not show the colour of the marble. Counsel submits they are sold in mixed lots. The prima goods were sold at Rs. 9,700/- PMT and the goods having cracks, holes, etc., were sold at Rs. 4,700/- PMT. We have seen the invoices placed on record which account for a substantial quantity and have no reason to disbelieve the appellant when they say that the goods were sold at the same price. Counsel had filed a calculation sheet showing the average landing cost Rs. 7,710/- PMT and average selling price of rs. 9,398/-. Since this is the price at which the products were sold we find no difficulty in accepting this price as the point of calculation of the margin of profit. This margin comes to about 50% of the CIF price. We therefore reduce the fine prescribed from Rs. 1.05 crores to Rs. 35.5 lakhs. We also order proportionate reduction of penalty from Rs. 10 lakhs to Rs. 3.5 lakhs.
6. The appeal is disposed off in the above terms.