Custom, Excise & Service Tax Tribunal
Merico Enterprises vs Commissioner Of Central Excise & ... on 18 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/1341 TO 1349/05 C/CO-36 TO 44/06 [Arising out of Orders-in-Original No. 8/2005-AP.COMMISSIONER dated 30/5/05, No. 11/2005-AP. COMMISSIONER dated 3/6/2005, No. 7/2005-AP. COMMISSIONER dated 30/5/2005, No. 6/2005-AP. COMMISSIONER dated 30/5/2005,No. 9/2005-AP. COMMISSIONER dated 30/6/2005, No. 10/2005-AP. COMMISSIONER dated 30/6/2005, No. 4/2005-AP. COMMISSIONER dated 30/5/2005, No. 5/2005-AP. COMMISSIONER dated 30/5/2005 & No. 12/2005-AP. COMMISSIONER dated 9/6/2005, passed by the Commissioner of Customs] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) Honble Mr. Raju, 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 :
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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Merico Enterprises
Laxmi Enterprises
Bright Impex
Orient Impex
Ocean International
Newtech Corporation
Star Audio
Hari Om Electronics
Continental Traders
:
Appellant
VS
Commissioner of Central Excise & Customs, Goa
:
Respondent
Appearance
Shri. Shri. Jitu Motwani, Advocate for Newteck and Star audio, Shri. D.H. Nadkarni, Advocate for Laxmi Enterprise and Orient Impex, Shri. C.S. Birasdar, Advocate for Bright Impex and Hari Om Electronics, None for M/s. Merico and Continental traders.
Shri. Roopam Kapoor, Commissioner(A.R.) for the Respondent CORAM:
Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. Raju, Member (Technical) Date of hearing: 18/8/2016 Date of decision /2016 ORDER NO.
Per : Ramesh Nair In all these appeals the common fact of the case is that the appellant imported Automobile Speakers of various models of Pioneer Brand, Country of Origin of the said goods is China/Thailand/Japan. After filing the Bill of Entry, goods were examined under the first check examination procedure on the basis of import documents filed and, in physical examination, it was seen that the impugned goods (speakers) of Thailand, Malaysia, Korea, China, Japan and Mexico origin were supplied by dealers from Dubai, Hong Kong, Singapore. The value of the speaker were enhanced on the basis of contemporaneous import and allowed the clearance of the goods. Later on department has contended that market survey/investigation wherein it appear that there was gross mis-declaration and under invoicing of the goods imported by the appellant and that value of the speaker while assessing the same for payment of customs duty was also not approximate to their actual value. The price of the goods also checked from the internet which revealed the price as below:
Model Wholesale price Market price
1) TS-A-6955 U$39.69 US$ 66.15
2) TS-A-6985 U$57.15 US$ 81.00
3) TS-A-6995 U$67.50 US$ 98.55 Thereafter, inquires were conducted and quotation of the same goods were called for from M/s. Sun City Electronics, Dubai which was submitted by them vide their fax letter dated 17th June, 2002. As per quotation, the following wholesale prices were quoted.
(i) TS-A 6955 DHS 147.00 each paid(Wholesale)
(ii) TS-Z-6985(made in China) DHS 215.00 each pair-1000 pair
(iii) TS-A 6995(Made in China) DHS 230.00 each pair-100 pair On further checking of price on the official website of Brand owner M/s. Pioneer Corporation, Japan the following prices are available on website:
(a) TSA 6955 Price not available
(b) TSA 6965 US$ 90.00
(c) TSA 6975 US$ 110.00
(d) TSA 6985 US$ 140.00 the price of impugned
(e) TSA 6995 US$ 170.00 goods As per analysis of the quote in the proforma invoice and the price print out obtained from the website www.jackys.com following price were revealed.
Mode Model No. Country Qty.
Port Value per pair Value in US$ Internet TSA 6955
-
W/sale Dubai 147 Dhs 39.69 Internet TSA 6985 W/sale Dubai 213 Dhs 57.51 Quotation TSA 6985 Made In China 1000 Dubai 215 Dhs 58.05 Quotation TSA 6995 Made in China 1000 Dubai 230 Dhs 62.10 Quotation TSA 6995
-
1500Singapore S$ 96 53.64 Internet TSA 6995 W/sale Dubai 250 Dhs 67.50 The department further called for price details from the sole distributor M/s. Eastern Commercial Agencies, Dubai who confirmed the following prices of the impugned goods being sold in the international market. Model No. Country of origin Quality (in pair) FOB (US $ per pair) TS-A6955 Thailand 500 36.50 TS-A6985 China 500 47.50 TS-A6995 China 500 56.00 The Scrutiny of the technical literature visa-vis the value of the speaker quoted in various quotation of the traders, sole distributor and price downloaded from the websites as discussed in the preceding paras revealed that the price declared by importer and the price prevailed in the market are different. On the basis of aforesaid detailed investigation it appeared that appellant had mis-declared value for evading payment of appropriate amount of customs duty by willful suppression of facts. Accordingly various show cause notices were issued for demand of differential duty in term of proviso to sub-section (1) of Section 28 of the Act. In the adjudication the Adjudicating authority rejected the value declared by the appellants in the Bill of Entry and the value was enhanced, consequently differential duty of the enhanced value was confirmed under Section 28 (1) of the Customs Act, 1962. Interest under Section 28AB was demanded. Penalty under Section 111(m) in lieu of confiscation was imposed and also penalty under section 114A was imposed. Aggrieved by the impugned order, appellants are before us.
3. Shri. Jitu Motwani, Ld. Advocate for Newteck and Star audio, Shri. D.H. Nadkarni, Advocate for Laxmi Enterprise and Orient Impex, Shri. C.S. Birasdar, Advocate for Bright Impex and Hari Om Electronics, None for M/s. Merico and Continental traders. They made following submissions.
(a) The entire case of undervaluation was made out on the basis of quotation said to have been obtained from Dubai based dealer. The quotation is in the name of the officer and same is unsigned but the same was received by fax, therefore the authenticity of the said quotation itself doubtful.
(b) The quotation relied upon by the revenue was obtained six months before the import of the goods. The impugned goods being electronic goods, the price of the electronic goods can be reduced very fast, this is general trend of the market of the electronics goods therefore the six months old quotation cannot be relied upon when the goods imported six months later. All the goods not imported from Dubai but also from the Hong Kong and Singapore whereas for all the cases the reliance was placed on the quotation, said to have been obtained from Dubai.
(c) At the time of import of speaker the assessing authority disputed the value accordingly value was enhanced relying on the NIDB data of the identical goods, being imported by other party. Once the price of the goods enhanced on the basis of the NIDB data no further enhancement can be made. This issue has been settled in various decision as cited below.
(d) The Bill of Entry had been finally assessed at the time of clearances of the goods, the final assessment cannot be reopened until unless it is challenged by way of filing appeal before the appropriate forum.
(e) Quotation relied upon by the Revenue is in the name of Shri. Sharma and Shri. Colaco, who are departmental officers, the appellant sought for cross-examination of these officers but the same was denied. Further submit that Sole reliance for confirmation of demand was made on the quotation which in the name of aforesaid officers therefore the Adjudicating authority should have given the cross examination, however it was denied and therefore there is gross violation of principle of natural justice.
(f) As regard the penalty imposed in lieu of redemption fine. They submit that goods were not available for confiscation therefore penalty in lieu of confiscation of the goods is not sustainable. In support of submission, reliance is placed on following case laws.
(a) Commissioner Vs. Indu Nissan Oxo Chemical Industries [2015(324) ELT A30(Guj)]
(b) Commissioner of Customs, Goa Vs. Star Audio[2015(325) ELT 182(Tri. Mum)].
As Regard the appeal of Star Audio, Ld. Counsel Shri. Jitu Motwani, produced death certificate of the proprietor of M/s. Star Audio Shri. Inderpal Singh Kohli, accordingly submits that this appeal may be stand abated.
4. On the other hand, Shri. Roopam Kapoor, Ld. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned orders. He submits that Pioneer brand speaker are well-known product and it is sold worldwide. Retail sales price as well as wholesale price is available in public on the various website. In the present case the valuation was enhanced not only on the basis of quotation provided by Dubai based dealer/distributor but adjudicating authority has also verified the price from various sources and websites and thereafter ascertained the correct value of the goods. Therefore it is not the case where the value was enhanced arbitrarily and without any basis. He submits that there is no bar in enhancement of the value even when the price was once enhanced at the time of clearance of the goods. He submits that in the present case there is clear suppression of actual value of the goods and in investigation the actual price was revealed. In such situation since actual price of the goods was not made available before the customs authority at the time of the assessment, the department is free to enhance the value as and when fresh evidences are available to the department therefore even once the value was enhanced the subsequent enhancement of the value on the basis of the evidence made available by investigation is in order. He submits that as regard the submission of the appellant that goods are imported not only from Dubai, but also from Hong Kong and Singapore, he submits that in present case in respect of the goods, the country of origin is either China, Thailand, Japan and Maxico. Therefore the country from where the goods were supplied is immaterial. The product is established pioneer brand goods having particular specification, such goods are available more or less at the same price irrespective of country of supply therefore the country of supply of the goods is not significant. He further submits that under the same investigation having the same facts and evidences. This Tribunal in case of Mytri Enterprises Vs. Commissioner of Customs, Mumbai[2004(174) ELT 389(Tri. Mumbai)] the value of same pioneer brand speakers was enhanced on the basis of same quotation of traders of Dubai and prices available on the website. In the present case also same quotation and prices available on websites were relied upon therefore decision of Mytri Enterprises directly applicable to the facts of the present case. This judgment of the Tribunal has been upheld by the Honble Supreme Court as reported in [2015(323) ELT E71(SC)].
5. We have carefully considered the submissions made by both sides and perused the record.
6. We find that product in question is internationally renowned Pioneer brand automobile speaker. Investigating authorities have relied upon quotation given by the Dubai based dealer and various websites were also checked and it was found that the price declared by the appellant are substantially less i.e. almost < as compared to the value shown in the quotation and price available on the websites. In this case, it is not only single quotation which is basis of enhancement of the value but independent price of the imported goods are available on the websites. It is not the case of the appellants that prices shown on the website are fictitious. It was observed that in all the evidences relied upon by the Revenue there is consistency in the price mentioned in the quotation and the price available on the websites, not a single evidences was found which shows the price as declared by the appellant. The table showing prices mentioned in quotation, website and value adopted by Revenue is as follows:
Sl. No. Party Name Model Name Price Quotation (US$) Website (US$) Adopted (US$) Sun City Pioneer Electronic.com (suggested retail price) Jackys.com 1 M/s. Bright Impex TS-A6955-6x9-220 w US $ 9.00 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 9.50 58.05 140.0 57.51 58.05 TS-A6995-6x9-300 w US $ 10.00 62.10 170.0 67.50 62.10 2 M/s.Hari Om Electronics TS-A6955-6x9-220 w US $ 9.00 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 9.50 58.05 140.0 57.51 58.05 3 M/s.Ocean Intl.
TS-A6955-6x9-220 w US $ 15 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 15 58.05 140.0 57.51 58.05 TS-A6995-6x9-300 w US $ 15 62.10 170.0 67.50 62.10 4 M/s.Newtech Corpn.
TS-A6955-6x9-220 w US $ 9.00 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 9.50 58.05 140.0 57.51 58.05 TS-A6995-6x9-300 w US $ 10.00 62.10 170.0 67.50 62.10 5 M/s.Star Audio TS-A6955-6x9-220 w US $ 9.00 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 9.50 58.05 140.0 57.51 58.05 TS-A6995-6x9-300 w US $ 10.00 62.10 170.0 67.50 62.10 6 M/s. Orient Impex, Delhi TS-A6955-6x9-220 w US $ 9.00 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 9.50 58.05 140.0 57.51 58.05 TS-A6995-6x9-300 w US $ 10.00 62.10 170.0 67.50 62.10 7 M/s.Continental Traders TS-A6955-6x9-220 w US $ 9.00 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 9.50 58.05 140.0 57.51 58.05 TS-A6995-6x9-300 w US $ 10.00 62.10 170.0 67.50 62.10 8 M/s.Laxmi Enterprises TS-A6955-6x9-220 w US $ 10.20 37.80 N.A. 39.69 Sun City 37.80 TS-A6985-6x9-260 w US $ 10.40 58.05 140.0 57.51 58.05 TS-A6995-6x9-300 w US $ 10.60 62.10 170.0 67.50 62.10 As regard the submission of the Ld. Counsel that the price was enhanced at the time of the assessment of the Bill of Entry on the basis of contemporaneous import, we are of the clear view that at the time of assessment of Bill of Entry whatever material was available, proper officer relying those material assessed the Bill of Entry by enhancing value. However, at that time actual value of the goods in question was not known to the officers, it was revealed only after investigation. Therefore there is clear suppression of the value. If any material which was not brought before the assessing authority at the time of assessment of Bill of Entry, enhancement of value on basis of available evidences cannot attain finality. If any fresh evidence is unearthed at any point of time subsequent to the assessment of Bill of Entry and clearances of the goods, Revenue is within legal authority to issue show cause notice demanding differential duty under Section 28. Therefore irrespective of the position whether value once enhanced or otherwise, if any fresh evidences is available at the subsequent stage the demand of differential duty is permissible in the law. As regard the contention of the appellant that quotation from Dubai based trader were obtained six months prior to the filing of Bill of Entry and the same was available at the time of assessment, it is observed that investigation was being carried on by Bombay customs and the clearance in the impugned case were made from Goa. It is fact that assessing officer while assessing Bill of Entry and clearing the goods from Goa, evidences such as quotation, value available on website etc were not known to the assessing officer therefore the quotations obtained even prior to the assessment of Bill of Entry does not make any difference as the same was not available before the Customs Authority at Goa. Therefore submission of the appellant in this regard will be of no help as it is clear case of suppression of value. On going through the judgments in case of Mytri Enterprises(supra) it is observed that case of Mytri Enterprises and the present appellants are under common investigation. In the said case also the same quotation of Dubai based trader and value available on websites were relied upon and the enhancement of the value on that basis has been affirmed by the Tribunal. This Tribunal judgment was upheld by the Apex court, relevant paras of both the judgments are reproduced below:
Mytri Enterprises(supra)(Tri.)
4. M/s. Mytri Enterprises is a partnership firm. It has two partners S/Shri Sushil Kumar Agarwal and Jayant Bachata. The firm imported car speakers (declared them as load speakers) of three models, declared on uniform price of US $ 9 per pair totally valued at US $ 14,391 CIF and filed a bill of entry for their clearance. They were assessed to duty enhancing the value from US $ 9 to US $ 11.60 per pair in respect of one model, US $ 9 to 11.74 per pair in respect of another and US $ 9 to 11.81 per pair in respect of the third one. This revision of value is in accordance with a formula invented by the Commissioner of Customs, Mumbai. The formula is contained in a letter dt. 11-1-2003 by the Commissioner addressed to the Chief Commissioner. We append the letter to this order so that we dont have to reproduce its contents here. After the bill of entry was assessed the goods were examined by the shed appraiser in the presence of officers of C.I.U. Such an examination resulted in the discovery that the consignment consisted of three different models, of three different sizes and wattage. The model numbers are TS-A 6955, TS-A6985 and TS-A6995. The invoice doesnt speak of any TS though. The goods were seized on the ground that the importers mis-declared the value and material particulars. The goods were imported from a trader in Dubai. Apart from the brand, the sizes and the wattage no other technical details of each of the models are either given in the invoice or in the packing list. The department could know the exact specification of each of the models through a catalogue.
?8.The order of the Commissioner was assailed by the ld. Advocate Shri V.S. Nankani on the following grounds:
(a) The department failed to produce a single invoice where the prices of the same goods were found to be higher. He furnished details of contemporaneous imports, the prices declared, the assessable value accepted/loaded by the customs and argued that the appellants prices compared well with the ones declared by other importers.
(b) He referred to the letter addressed by the Commissioner of Customs Mumbai to the Chief Commissioner in regard to valuation of car audio speakers. In this letter the Custom House adopted a particular method of valuation of car speaker of both lesser and well known brands. The same method should have been adopted for determining the value of the appellants goods as well. In fact the method adopted in the said letter was brought to the notice of the Tribunal at Delhi in identical proceedings. The Tribunal accepted the contention that the same norms as stated in the letter should be adopted in the case of the appellants before them. The present appellants are put to a dis-advantage vis-a-vis other importers when a different norm is applied to their goods. The case of Techno Marketing v. CCE, Calcutta, Order No. 640/03 dt. 18-11-2003 [2004 (164) E.L.T. 113 (T)] was relied upon.
(c) The Commissioner erred in discarding the transaction value relying on some prices quoted in some obscure quotations engineered by the investigating officers themselves (S/Shri Sharma and Colaco). The case of Overseas International v. CCE, Chennai [2001 (127) E.L.T. 599 (T) = 2000 (41) RLT 101 (Tr.)] is relied upon to agree that quotations cannot overrule the prices shown in the invoice.
(d) Reliance on prices exhibited in the internet is erroneous. Aggarwal Distributors Pvt. Ltd. v. CCE, New Delhi [2000 (117) E.L.T. 49 (Tri.)] was relied upon.
(e) Cross examination of Shri Sharma and Shri Colaco was not allowed resulting in gross violation of principles of natural justice.
(f) Burden of proving under-valuation is on the department and it can only be discharged by production of affirmitive evidence and not on the basis of suspicion etc. The department failed to produce any worthwhile evidence. Puja Poly Plastics Pvt. Ltd. v. CCE, Calcutta [2001 (131) E.L.T. 200 (Tri.)] and Sounds N. Images v. CCE [2000 (117) E.L.T. 538 (S.C.)] were relied upon in support of the contention.
(g) Price quotations addressed to non-existing parties are not offers for sale under Section 14 of the Customs Act, Priti International v. CCE, Chennai [2001 (137) E.L.T. 184 (Tri.)] is relied upon.
(h) Penalties on both the partners of the firm should not have been imposed under Section 114A of the Customs Act, whereas the section provides for imposition of penalty on the importer who contravened the provisions of the Act.
9.The ld. JDR Shri R.K Pardesi strongly supported the? impugned order in so far as it related to confiscation of goods, rejection of transaction value and imposition of penalties on the partners of the firm. His grouse is confined to non-imposition of penalty on the firm as well.
10.In support of his contention that prices indicated in a? quotation can be relied upon to reject a declared price the ld. JDR found support in the case of Hind Industries v. Commissioner [1997 (90) E.L.T. 499 (Tri.)]. An appeal against this decision was dismissed by the Supreme Court] wherein the Tribunal held that an adjudicating authority can determine the value on the basis of the prices indicated in quotations after giving suitable allowance. In the present case a suitable allowance was given by the adjudicating authority. He also relied on the decision of the Tribunal in the case of Satellite Engineering Ltd. v. Union of India [1983 (14) E.L.T. 2177 (Bom.)] wherein the High Court held that non-disclosure of names of exporters who sent the quotations has not caused any hardship to the petitioners. He argued that in the present case the names of the exporters who sent the quotations were disclosed although the recipients of the quotations were not permitted to be cross-examined. No hardship is caused to the importers in such an event. ?11.The ld. JDR relied on the case of Poonam Plastic Industries v. CCE [1989 (39) E.L.T. 634 (Tri.)] wherein the Tribunal held that the department is not required to prove actual value with mathematical precision when transaction is veiled in secrecy. In the present case the prices declared are veiled in secrecy as the importer failed to disclose the actual value of each of the models of speakers, a fact which is known to him alone. ?12.He cited the case of Pan Asia Enterprises v. CCE, [1995 (79) E.L.T. 322 (Tri.) which is later upheld by the Supreme Court [1997 (94) E.L.T. A59 (S.C.)] and argued that when the imported goods were not supplied by the manufacturer and when the investigation revealed that higher prices were indicated in quotations, declared value could be rejected.
13.He argued that when goods of various models were? imported but uniform price for all the models declared irrespective of model and combination without any details, invoice price is not acceptable. In support of this contention he relied upon the case of Maya Enterprises v. CCE, Kandla [1994 (71) E.L.T. 817 (Tri.)]. In the present case the three models of speakers have different specifications but an uniform price is declared. Once the declared value is rejected on this ground the department can determine the assessable value on the basis of evidence, under Rule 8 of the Valuation Rules, in the absence of any other recourse available under Rules 5, 6, 7 of Valuation Rules. ?14.In regard to the letter dt. 11-1-2003 of the Commissioner, Mumbai addressed to the Chief Commissioner which according to the appellants formed the basis of Valuation of car speakers in earlier imports he argued that the circular clearly speaks of rejection of the basis stated therein if evidence of higher prices is brought out. The department is not bound to adopt the norms prescribed in the letter cited supra in all cases and particularly so when evidence of higher values is gathered. ?15.He distinguished the case of Aggarwal Distributors cited supra wherein the Tribunal held that internet prices cannot be relied upon to reject the transaction value. In the present case the internet price relied upon is a wholesale price unlike the ones in the above said case. In Aggarwals case there was no indication as to whether the internet price was wholesale price or a retail one. He averred that the impugned order he upheld in regard to enhancement of value of the imported goods, confiscation of the goods and imposition of penalties.
16.On the issue whether penalty can be imposed on the firm? as well on its partners the ld. JDR argued that a firm is an association of persons and is distinct from its partners. A penalty can be imposed both on the firm as well as on its partners as held by the Tribunal in several decisions. He also relied upon the Honble Supreme Court decisions in the case of Agarwal Trading Corporation & Ors. v. ACC, Calcutta [1983 (13) E.L.T. 1467 (S.C.)] wherein the Honble Court discussed the status of a partnership firm in the eyes of law. He relied upon the case of India Sea Food v. CCE, Cochin [1984 (16) E.L.T. 243 (Kerala)] wherein the Honble High Court of Kerala held that a penalty can be imposed on the importing firm as well as on its Managing partner if his complicity is established. In the present case the import was in the name of the firm and the partners did commit acts of omission and commission which rendered the goods liable to confiscation. He prayed that a suitable penalty may be ordered on the firm by modifying the order of the Commissioner to that extent.
17.We have considered the rival contentions and perused? the records.
18.The appellants have relied heavily on the decision of? the Tribunal at Delhi in its order No. 640/2003-NBA, dt. 18-11-2003 [2004 (164) E.L.T. 113 (T)] in which the Bench while allowing the appeal observed, we quote Since the value indicated in this letter (letter dt. 11-1-2003) of the Commissioner of Customs, Mumbai has been arrived at after considering the prices observed in the trade as well as from other sources and the prices are also indicated size-wise and brand-wise, the prices indicated in the circular should commend itself for adoption in cases of doubt. We have perused the said letter. The letter further reads thus However, if evidence of higher price is noticed or provided by agencies the aforementioned floor price (emphasis provided) will be revised. In the present case evidence of higher prices is gathered by the agency (CIU). The letter cited supra provides for revision/determination of price in case of fresh evidence indicating higher prices for car speakers. What the Commissioner did was exactly this. Again, we are not aware whether the imported goods in the case before the Delhi Bench are identical with the ones we are concerned with. Valuation Rules themselves do not provide for any floor prices that could be adopted while determining the value of imported goods. It is the transaction value or the value determined in accordance with the said rules that should commend itself for adoption and not those mentioned in some letter of some Commissioner irrespective of the fact that evidence of higher prices is brought to the notice of the department. In fact the basis of valuation of car speakers enunciated in the said letter can be easily challenged on the ground that it is not in accordance with Valuation Rules.
19.The letter under reference is nothing much to talk about. Determining prices of car speakers on the basis of their sizes and their out put ignoring other specifications such as the size of the woofer, midranges and Dom tweeter, frequency response etc., is to say the least appears, looks archaic. That perhaps is the reason while the department wished to reopen the past clearances in the light of evidence gathered by the department. And rightly so. Apart from the fact that Valuation Rules do not permit the customs authorities to revise declared prices by adopting the methods suggested in the said letter the method itself is irrational. It has no statutory backing. Further it provides escape clauses such as the ones mentioned elsewhere in this order. There is no gain saying the fact that the goods under import have different specifications even though a uniform price of 9 US $ per pair is declared. Any layman would know that the price of a speaker does not merely depend on its size and wattage.
20.Further it appears that the invoice itself is tailor? made to suit the method adopted in the Commissioners letter for determining the value of a speaker. The invoice gives the size wattage and the brand of the speakers while indicating a price slightly lower than the one the department would have ultimately adopted by applying the thumb rule mentioned in the letter. The packing list also does not give any further details of the speaker under import. It is only by referring to the catalogue the department came to know the technical details of each of the models under import. This itself can be construed as suppression of facts in order to evade duty.
21.We are in agreement with the decision of the Tribunal? in the case of Maya Enterprises wherein the Tribunal held that when uniform prices are declared irrespective of model and combination without giving further details, invoice value can be rejected. The Commissioner has rightly rejected the invoice value. The appellants do not seem to have any grouse on rejection of the declared price but seem to contest such revision because the prices ultimately determined were not in accordance with norms prescribed in the letter. We observe that the department is not bound to go by the letter and sprit of the Commissioners letter while determining the value of imported goods. This is particularly so when the department decided to reopen the cases of similar goods cleared in the past.
22.Rejection of the declared price is one thing? determination of value is another. It is therefore necessary to see whether the Commissioner re-determined the value of the impugned goods in accordance with the valuation rules. We proceed to do so. ?23.The evidence suggesting that the speakers command a much higher price than what is declared by the appellants is in the form of quotations, and prices indicated to the internet. The prices indicated both in the website and the quotations are wholesale prices. A lot of arguments were advanced against acceptance of the prices indicated in the quotations. It appears that the quotations themselves, though were given by traders in Dubai, were engineered by two over enthusiastic officers. We observe that so long as the quotations themselves are tendered as evidence, the appellant had opportunity to demolish them by producing evidence in their favour. They did not avail of the opportunity except asking for cross-examination of the officers concerned. We have the authority of the decision of the Tribunal in the case of Satellite Engineering Ltd. relied upon by the ld. JDR, which held that non-disclosure of intending importers and not producing them for cross-examination will not amount to violation of natural justice.
24.The Commissioner has also considered the prices? indicated in the internet, which are wholesale prices, to determine the prices at which the impugned goods are ordinarily sold in the course of international trade. At page 9 of the impugned order the Commissioner analyses as to how the prices indicated in the internet compare well with the ones shown in the quotations from other dealers in Dubai and the distributor of the same goods in that country. For each of the models indicated in the invoice the prices, on enquiry ranged as follows :-Serial No. 1 US $ 37.80 to 39.69; Serial No. 2 US $ 47.50 to 58.05 and Serial No. 3 US $ 53.64 to 67.50. In this range the lowest quotation except in the case of model No. TSA 6995 happened to be of the distributors only. Now, a product which costs as high as the ones mentioned above is sought to be imported at 9 US $ per pair. The reliability of such a price can be easily guessed. In a scale of 0 to 10 the invoice price could be given the bottom most mark in so far as its reliability is concerned.
25.The Commissioner arrived at the value of the impugned? goods on the basis of the lowest quotation offered by one of the dealers in Dubai and not the highest price given by other dealers. One cannot find fault with such a decision.
26.The ld. Advocate argued that not a single import at the? prices arrived at by the Commissioner was noticed during the period in question and therefore the quotation prices cannot form the basis for determining the value. We examined this contention carefully. One of the features of Indian International Trade is that our export prices always tend to be very high (rags are exported at such prices that even the richest living abroad would think twice before purchasing them similarly the export price of ball point pens would scare away any decent students) and the prices of imported goods tend to be abysmally low. No wonder then, that nobody imported the speakers declaring the real value during the period in question. And the letter of the Commissioner referred to earlier has not exactly served the cause of finding out the real value of the speakers. A few more of such letters would permanently discourage the importers from declaring the real value of the goods.
27.We have also considered the argument that just as a? single Swallow does not make a summer, a single quotation or a couple of them cannot form the basis for rejecting a declared price. We could have agreed with that preposition but for the fact that in the present case the Commissioner relied on not a just of couple of quotations but also on the internet prices, distributor prices etc. to reject the declared price. We feel that it is perfectly in order to do so. We do not find any infirmity in so far as the revision of the value.
28.We observe that the adjudicating officers do not? normally confiscate the goods and impose penalties on the importers while rejecting the transaction value. In the present case the Commissioner confiscated the goods and imposed penalties. We find that such an action is called for in the present case at least for two reasons. The value has been misdeclared so grossly that it attracts the charge of under-valuation. In other words it is not merely an issue where a transaction value is rejected. It is something more. And secondly an attempt to declare prices of all models at 9 US $ CIF per pair definitely constitutes mis-declaration of value. We hold therefore that the goods in question are liable to confiscation under Section 111(m) and persons concerned are liable for penal action under Section 114A of the Customs Act.
29.The Departments appeal is in regard to non-imposition? of penalty on the firm. The Commissioner argued that a firm is not a legal entity and therefore no penalty can be imposed on it. According to him a partnership firm is not a legal entity within the meaning of Section 3(42) of the General Clauses Act. The ld. JDR relied on the decision of the Honble Supreme Court in the case of Agarwal Trading Corporation & Ors. [1983 (13) E.L.T. 1467] and similar other pronouncement by the Tribunal on the issue of imposition of penalties on both the firm and its partners. This Tribunal also held that while penalty on both proprietor and the proprietary firm cannot be imposed, penalties can be imposed on the partnership firm and the partners simultaneously. We agree therefore that the Commissioners reference to General Clauses Act is not in accordance with the views expressed by judicial forums. However we refrain from imposing a further penalty on the firm in view of the penalties imposed by the Commissioner on both the partners. There does not seem to be any point in flogging any horse excessively.
30.The appeals of the importing firm and its partners are? rejected. The appeal of the Revenue allowed under the above terms. Above judgment upheld by Honble Supreme Court:
The Supreme Court Bench comprising Honble Mr. Justice A.K. Sikri and Honble Mr. Justice Rohinton Fali Nariman on 23-4-2015 dismissed the Civil Appeal Nos. 5773-5775 of 2004 filed by Mytri Enterprises against the CESTAT Final Order Nos. A/490-495/2004-WZB/C-II, dated 2-7-2004 as reported in 2004 (174) E.L.T. 389 (Tri.-Mumbai) (Mytri Enterprises v. Commissioner). While dismissing the appeals, the Supreme Court passed the following order :
We have heard the learned counsel for the parties at length and have also gone through the records. We are satisfied that the Custom Officer has rightly rejected the price of speakers imported by the appellant as declared in the Bill of Entry, applying Rule 10A of the Valuation Rules. We are also satisfied that in such an eventuality, the prices which are fixed is based on concurrent findings of facts. Therefore, we find no merit in these appeals which are, accordingly, dismissed. From the above judgments it can be observed that products are identical i.e. Pioneer brand speakers, the facts such as product specification, declared price, enhanced price, evidences such as quotation, price available on website etc. are identical therefore aforesaid judgment is directly applicable in the present case. Taking into consideration the overall facts and aforesaid judgment, we are of the view that lower authorities have rightly enhanced the value and confirmed the differential duty. Since the appellants deliberately suppressed the value by mis-declaring, the goods were liable for confiscation. Though the redemption fine was not imposed, for purpose of imposition of penalty, availability of the goods which was liable for confiscation is not necessary, therefore penalty was rightly imposed in lieu of confiscation. Since differential duty rightly confirmed under proviso to Section 28 (1) of the Customs Act, penalty imposed under Section 114A is inevitable. As per our above discussion and the settled legal position, the impugned orders are upheld and appeals are dismissed except Appeal No. C/1349/05 of Star Audio, which stands abated for the reason of demise of proprietor of the said firm. All the Cos filed by the Revenue also stand disposed of.
(Order pronounced in court ______________ ) Raju Member (Technical) Ramesh Nair Member (Judicial) sk 2 C/1341 TO 1349/05