Customs, Excise and Gold Tribunal - Delhi
Walia Enterprises vs Collector Of Customs And Central Excise on 8 October, 1987
Equivalent citations: 1987(14)ECC356, 1988ECR36(TRI.-DELHI), 1987(32)ELT774(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. In this case the facts are that the appellants imported 15,000 pcs. of Miniature Ball Bearings below 10 mm diameter, 608zz Italy from Singapore. In the relevant Bill of Entry filed by them they quoted the invoice price as being Singapore Dollar 3000 C.I.F. The bearings were of SKF make. According to the department the assessable value of the goods was not available with the Customs at Amritsar where the goods had been imported and they sought the information from Delhi Customs who intimated that the C.LF. value was Rs. 9.25 per piece based on the list price available with them for the years 1982 and 1985. Accordingly, the total C.I.F. value of the goods worked out to Rs. 1,38,750.00 as against Rs. 17,128.20 declared in the Bill of Entry. The matter was adjudicated by the Additional Collector of Customs, who, on further information obtained from Central Warehousing Corporation, New Delhi, held that the value of the bearings was Rs. 18.40 per piece bringing the total assessable value to Rs. 2,76,000/-and directed that duty was payable on this assessable value.
2. Heard Shri Harbans Singh, Advocate for the Appellants and Shri C.V. Durghayya, JDR for the department.
3. The learned Advocate has argued before us that the assessable value should be based on the declared invoice prices. In this case the department has alleged under valuation but they have not been able to prove the charge of under invoicing, the onus of which lies entirely on the department. In this connection Shri Harbans Singh cited the decision of this Bench in the case of M/s. Rakesh Press v. Collector of Customs, Bombay - 1985 E.C.R. 646 (Cegat). It is pointed out by the learned Advocate that the department issued a show cause notice on the basis of some price lists with them and ultimately, even, this basis was given up and the Order-in-Original has ordered the duty to be paid in terms of another price list. It is also urged that the department did not give the appellant an opportunity to have a look at the evidence on the basis of which the Order-in-original has been finally issued. It is submitted that the department could very well have referred to the assessable value of contemporaneous imports but they have not chosen to do so.
4. Responding, the JDR has stated that the assessable value determined as per the Order-in-original is based on information collected from the Central Warehousing Corporation, Delhi. He concedes, however, that the party was not given an opportunity to see the additional evidence relied upon or to offer his comments. Shri Durghayya submits that the matter could be remanded back so that the party is given an opportunity to be heard on the evidence made available by the Central Warehousing Corporation. As regards the Bill of Entry the learned JDR states that it did not contain the complete specification of the goods imported; not could the invoice be fully related to it and proved.
5. Shri Harbans Singh, Advocate strongly opposes remand of the case. He submits that the show cause notice itself has no legal basis and therefore the orders should be set aside.
6. We have carefully considered the facts of the case and the submissions made before us. We find that in this case a show cause notice was issued to the importers on 8th July, 1986 according to which the C.I.F. value of the miniature ball bearings imported was reported as per information available with the Customs to be Rs. 9.25 per piece. This information reportedly was obtained from Collector of Customs, Delhi. However, on 14th November, 1986 an amendment was issued to the show cause notice and it was alleged that the correct assessable value of the bearings was Rs. 18.40 per piece. There is no evidence whatsoever of any other effort having been made or information having been obtained to verify prices in respect of imports of goods of like kind quality. Clearly the Customs at Amritsar did not have any information on their own and they, rather mechanically issued the first show cause notice on the basis of some information stated to have been received from the Collector of Customs, Delhi and then they issued another show cause notice on the basis of some other information received from the Assistant Collector of Customs, Central Warehousing Corporation, New Delhi. The fact that the price reported by the Assistant Collector, Customs, CWC was nearly twice the price earlier intimated by Collector of Customs, Delhi did not make the Amritsar Customs pause and ponder as to the reasons for the sharp difference. Nor did they feel to called upon to make any further enquiry. There is no other evidence from the department's side based on prices of contemporaneous imports of similar goods.
7. The law is now well established that the burden of proving the charge of under valuation lies squarely on the department. Appellants have rightly relied on the decision of this Bench in the case of Orient Enterprises, New Delhi v. Collector of Customs, Cochin - 1986 (23) E.L.T. 507 (Trib.) and Babcock Venkateshwara Hatcheries (P) Ltd. v. Collector of Customs, Bombay - 1985 (20) E.L.T. 335 (Trib.). It has been held repeatedly by this Tribunal that where the charge of under invoicing is laid, against an importer, it is the duty of the authorities to make necessary investigation at the major ports with regard to the price at which goods of the like kind and quality were being imported. The charge of under invoicing has to be supported by evidence of prices of contemporaneous import of like kind goods. The onus of proving mis-declaration regarding the price mentioned in the Bill of Entry is on the Department and this can be discharged by the Department only on proving of proper facts, which would discredit the price mentioned in the Bill of Entry and not on the -basis of mere suspicion. It is, therefore, that on this ground alone the orders of the lower authorities merits to be set aside.
8. What amazes us, is that the show cause notice is this case alleges that the correct price of the imported bearings is Rs. 9.25 per piece whereas the order of the Additional Collector is based on the correct price being Rs. 18.40 per piece. The learned JDR has conceded that the order was passed without furnishing the additional evidence to the appellant and without giving any opportunity to show cause in respect of it. This further seriously undermines the legality of the order.
9. In the light of the foregoing discussion it has to be held that the department has not been able to establish that this is a case of under invoicing or that the correct price of the goods imported is anything other than that declared in the Bill of Entry. We hold accordingly.
10. Appeal allowed.
I.J. Rao, Member (T)
11. I have carefully gone through the order of my learned brothers. The ground on which the appeal is allowed is that the customs department did not prove under-valuation.
12. While I agree with the brothers' finding that customs did not prove under-valuation, I take note that the Collector while passing the order relied upon some evidence consisting an import at CWC, New Delhi. In fairness to the defence, he should have disclosed the evidence to them and they should have been given an opportunity to counter the same. This has not been done; the order cannot be sustained.
13. However, I feel that the omission on the part of the Collector should be allowed to be made good. While I agree that the order should be set-aside, I hold that the matter should be remanded to the Collector for fresh adjudication after disclosing to the appellants the relevant evidence relied on by the department and after giving a reasonable opportunity to them to counter the evidence.
14. I, therefore, allow their appeal by remand.