Customs, Excise and Gold Tribunal - Tamil Nadu
Sheraton Overseas vs Commissioner Of Customs on 21 December, 2001
Equivalent citations: 2002(144)ELT432(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. Both these appeals arise from a common Order-in-Original No. 25/2001, dated 3-4-2001 by which the declared value in the Bill of Entry has been enhanced to Rs. 11,84,875/- and the differential duty of Rs. 2,59,065/- has been confirmed in terms of Section 28 of the Customs Act and also the goods were held to have been declared by undervaluing the same and hence the Commissioner of Customs (Airport) ordered for its confiscation under Section l11(m) of the Customs Act, 1962 , however, granting redemption on payment of fine of Rs. 5 lakhs. Penalty of Rs. 1 lakh has been imposed on Shri S.G. Govindarajulu, Proprietor of M/s. Sheraton Overseas, Chennai and Rs. 2 lakhs on Shri Dinesh Kumar, Proprietor of M/s. Utkal Impex under Section 112 (a) of the Customs Act.
2. The charges against the appellants are that on the basis of intelligence that they were undervaluing the ICs and Transistors, Bill of Entry No. 240432 was intercepted by the intelligence department of DRI wherein they had declared the goods at the value of Rs. 1,26,812/-. The goods were found to be branded components of brand names like Mosel, Dallas, NEC, Japan, Sony, Japan, etc. Statements were recorded from the above named persons. Shri S.G. Govindarajulu in his statement admitted that he was introduced by his friends to one Shri Dinesh Kumar and Dinesh Kumar wanted to import the goods in S.G. Govindarajulu Company's name for which Shri S.G. Govindarajulu was promised Rs. 10,000/- per consignment. Three consignments had already been imported by Dinesh Kumar in the name of M/s. Sheraton Overseas. Shri S.G. Govindarajulu admitted that he did not know the actual value of the import as Shri Dinesh Kumar negotiated the supply and financed the import.
3. Shri Dinesh Kumar of M/s. Utkal Impex, Mumbai admitted before the authorities that he only imported the goods in the name of M/s. Sheraton Overseas; that Shri Govindarajulu used to do the customs clearance formalities; that he did not have the Import-Export code number; that he did not have the manufacturer's price list for the goods under import; that he agreed to pay the differential duty on the basis of the actual value of the goods. He also agreed with the statement of Shri S.G. Govindarajulu. Shri Dinesh Kumar again appeared before the Investigating Officer and handed over a copy of the quotation of M/s. Bezto Overseas International, Hong Kong. He admitted that the goods imported by him were as per the quotation and agreed to pay the differential duty and paid an amount of Rs. 2,50,000/- towards the duty on the goods.
4. The department issued show cause notice as to why the value should not be enhanced on the basis of quotation submitted by Mr. Dinesh Kumar. The quotation was of M/s. Bezto Overseas International, Hong Kong submitted to M/s. ASM Enterprises, Mumbai. The show cause notice proposed to refix the value at Rs. 11,84,875/- and demanded the differential duty of Rs. 2,59,065/- and also proposed to confiscate the goods under Section 111(m) of the Customs Act, 1962 and imposed penalty on both the persons under Section 112(a) of the Customs Act, 1962.
5. Before the Commissioner, both the persons retracted their statements and the admissions made. They contended that they were forced by the authorities to admit to the quotation details and to give the admissions in writing. They contended that quotation cannot be a ground for enhancing the value and the department should produce evidence of contemporaneous import. They also pointed out from the quotation that it was dated 4-8-2000 submitted to M/s. ASM Enterprises, Mumbai but it was endorsed by Dinesh Kumar on 18-7-2000 which itself disclosed that the quotation was a concocted one. The quotation dated 4-8-2000 did not bear the back date of 18-7-2000 for having received by Dinesh Kumar. It was also pointed out that the party had been detained in the custody till the late hours of 17-8-2000 and statement recorded. The letter to the Dy. Director, DRI given by both the parties admitting the quotation and agreeing to pay is of next date i.e. 18-8-2000 which was given under duress and compulsion. Therefore, in reply to the show cause notice, they retracted the statements and the admissions and contended that quotation cannot be the basis for enhancing the value. They also explained that it was due to threat, coercion from the department that they admitted in their statement and given a letter also on 18-8-2000, the next date of recording the statement dated 17-8-2000 while they were in custody.
6. The Commissioner did not accept their plea in the impugned order. He has rejected the retraction as an after-thought' and has noted that the quotation can be accepted as they had admitted its authenticity and hence on that basis has enhanced the value of the goods and directed them to pay the differential duty and confiscated the goods.
7. We have heard Shri G.L. Rawal, Sr. Advocate along with Shri R. Parthasarathy, Advocate for appellants and Shri G. Sreekumar Menon, ld. SDR for the Revenue.
8. Ld. Senior Counsel submitted that it is a settled law that quotation cannot be accepted as an evidence for enhancing the value. He contended that the Commissioner's view that appellants had admitted in their statements and had given the quotation itself cannot be a ground for enhancement of the value. He pointed out to the circumstances under which the statement was recorded on 17-8-2000 and due to pressure they had to give in writing on 18-8-2000 that goods were purchased in terms of the quotation and that they were depositing the amounts. He pointed out to the quotation dated 4-8-2000 submitted by M/s. Bezto Overseas , Hongkong to M/s. ASM Enterprises, Mumbai that it was not received by the appellant Shri Dinesh Kumar as the signature of Dinesh Kumar on that is "submitted -signed on 18-7-2000 - DINESH KUMAR". The quotation itself has taken premature period. The signature of Dinesh Kumar on the quotation as 18-7-2000 cannot be a valid document which is dated as 4-8-2000. The document itself is tainted and cannot be accepted, even if there was an admission. He submitted that mere admissions are not sufficient to vitiate the genuineness of the quotation as the law is that production of contemporaneous imports from same country, with regard to same items should be produced by the Revenue and the bills of entry filed by other importers. Same has not been done. DRI closed the case after extracting the statement and proceeded on the basis of alleged quotation. He pointed out to the reply to SCN about the retraction of the statements as well as about the circumstances under the quotation was taken by the officers. They had clearly explained that both were tainted documents and mere admissions cannot be relied for confirming the demands. He pointed out that department ought to have investigated and produced separate corroborative evidence in the form of contemporaneous imports of the same item as held by the Apex Court in the case of Mirah Exports Pvt. Ltd., 1998 (98) E.L.T. 3; Eicher Tractors Ltd., 2000 (122) E.L.T. 321; Lakshmi Colour Lab, 1992 (62) E.L.T. 613; CC v. Nippon Bearings Pvt. Ltd., 1991 (55) E.L.T. 68. He submits that this case has been confirmed by the Apex Court reported in 1996 (82) E.L.T. 3. He also relied on the judgment of Sai Impex., 1992 (62) E.L.T. 616. He contended that admissions should be clear and conclusive and not tainted by any other circumstances only then, it can be accepted. In the present case, admission is not clear and it is obtained on the basis of coercion. He relied on the judgment rendered by the Apex Court in the case of Chikkam Koteswara Rao v. Chikkam Subbarao and Ors., AIR 1971 SC 1542. He relied on the judgment of the Apex Court rendered in the case of Narbada Prasad, A1R 1969 SC 395 which confirms the judgment rendered by the AIR 1936 Privy Counsel 253. He contended that the Apex Court in the case of K.I. Pavunny v. ACCE, Cochin, 1997 (90) E.L.T. 241 have clearly laid down that admissions should be corroborative for the purpose of linking the same to uphold the offence. He also relied on the judgment rendered by the Apex Court in the case of CCE v. East Punjab Traders -1997 (89) E.L.T. 11. He relied on the judgment of Hanumant Govind Nargundkar and Anr. v. State of Madya Pradesh reported in AIR 1952 SC 343 which lays down the preposition pertaining to circumstantial evidence. Even in case the conviction and circumstantial evidence, the evidence should be clear and consistent. The circumstance should be of conclusive in nature. He also relied on the judgment of Manindra Chandra Dey v. CEGAT, 1992 (58) E.L.T. 192 (Cal.) wherein law pertaining to the voluntary admission has been laid down.
9. Ld. SDR pointed out to the admissions made in the letter dated 18-8-2000 by both the appellants wherein they have stated that the exact value of imported goods were in terms of copy of quotation submitted by them and that they have agreed to adopt and accept the same value and willing to pay differential duty amount. He also referred to the statement recorded on 17-8-2000 admitting the value of the goods to be in terms of the quotation and therefore pointed out that subsequent retractions in reply dated 28-3-2001 to the show cause notice dated 27-12-2000 is belated and cannot be accepted. He sought for confirmation of the order impugned.
10. On a careful consideration of the submissions made by both sides, and on our perusal of the order, we notice that appellants indeed admitted in their statement dated 17-8-2000 that they had undervalued and the price was in terms of the quotation received from M/s. Bezto Overseas International, Hongkong. On the next date, i.e. on 18-8-2000, both the appellants have given in writing to the Dy. Director, DRI, Chennai the copy of the quotation dated 4-8-2000, admitting the same. However, these submissions and contents of the letter were retracted while replying to the show cause notice. Learned Commissioner has overruled their retractions and held the same to be "after-thought". The question that arises for consideration is as to whether the Tribunal can accept their retraction.
11. The quotation bears the date 4-8-2000 by which Shri Dinesh Kumar has initialed it and dated it as 18-7-2000. Ld. Counsel points out that this itself shows that the quotation was a 'bogus one' and cannot be accepted. He pointed out us through well laid down authorities of the Apex Court/Privy Council that admission is required to be examined. We have given our careful thought to this. It appears that DRI officers were satisfied with the admission made by them when they were in detention on 17-8-2000 and on appellants producing the quotation and giving a letter on 18-8-2000 and have closed the investigation. The corroboration required that the investigating authority ought to have seen as to whether this was a trick played by the appellants to deceive or misguide the DRI officials as the law well laid down is that quotation cannot be the basis for enhancing the value. Further, it is clearly laid down that prudence of proving undervaluation is on the Revenue. Revenue although have taken their statement and the quotation from the appellants but they ought to have seen about the appellant Dinesh Kumar having initialled on the quotation and dated as 18-7-2000 which clearly shows itself pre-dated to the date of quotation i.e. 4-8-2000 . The Investigating Officer ought to have applied his mind and seen that this could be taken as defence during the proceedings and should not have left the investigation half-way. Further, he should have gone through the quotation of contemporaneous import and filed Bills of Entry of other importers to find out the correctness of value of the goods. The lapse of the Investigating Officer is clear and has been brought out by the ld. Senior Counsel in terms of well laid down judgments which are cited before us. Even otherwise, the common sense and prudence require that the Investigating Authority ought not to have accepted their mere admission and their producing the quotation and should have insisted on the appellants producing the evidence or the authorities themselves ought to have known through various Custom Houses as to the value of the goods prevailing in the market. Therefore, subsequent retraction in the present case cannot be set aside as an 'after-thought', for the reason that fundamental rule for enhancing the value is evidence of contemporaneous import and not a mere quotation. Normally, quotations are not immediately acted upon but the parties negotiate further and arrive at an agreement which is reflected on the invoices. There is no such quotation of contemporaneous import produced. Therefore, the law on the transaction value to be the value in which the party negotiates and fix the price in terms of the final transaction and in terms of the invoices is the contemporaneous evidence as held by the Apex Court in Eicher Tractors Ltd., 2000 (122) E.L.T. 321 (S.C.); Basant Industries, 1996 (81) E.L.T. 195; Mirah Exports Pvt. Ltd. (supra); Padia Sales Corporation v. CC, 1993 (66) E.L.T. 35 (S.C.). Further, we notice that the judgments of the Tribunal in the case of Lakshmi Colour Lab.; CC v. Nippon Industries Ltd.; Sai Impex (supra) have held that quotation cannot be the basis for enhancing the value is required to be accepted. We also notice that the law with regard to admissions and corroborations and the judgments cited by the ld. Senior Counsel before us in the case of Chikkam Koteswara Rao v. Chikkam Subbarao and Ors. (supra) has clearly laid down that admission must be clear in their meaning and there should be no doubt or ambiguity about the alleged admission. The law itself has laid down that quotation cannot be the basis to enhance the value when it is not known the admission made in the present case was that and the letter and quotation have been given on the next day. However, the quotation itself bears the date which is prior to the date of quotation. Therefore, the law laid down by the Apex Court that admission should not have any doubt or ambiguity is required to be applied. In the present case, there is clear and the Investigating authorities have not completed their evidence and further Investigating authority have not produced further evidence of contemporaneous import. Hence, appellant's plea that the value cannot be enhanced on the basis of quotation is required to be accepted in the light of well laid down judgment of the Apex Court and hence applying the same, the impugned order is set aside and appeal allowed.