Customs, Excise and Gold Tribunal - Delhi
Aggarwal Distributors (P) Ltd. vs Commr. Of Customs on 28 January, 1999
Equivalent citations: 2000(117)ELT49(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Briefly stated facts of the case are as follows :
1.1 The appellants herein filed Bill of Entry dated 3-10-1997 for clearance of Vivitar Lenses for camera valued at Rs. 2,35,463.47 (CIF) in the EDI system of New Custom House, New Delhi. The appellants submitted invoice dated 25-9-1997 showing the supplier as M/s. Vivitar (Asia) Ltd., Hong Kong. Goods appeared to be undervalued to the Customs authorities and of doubtful country of origin. Accordingly, first appraisement was given and samples of the items were called for verification of the declarations made by the appellants. After examination of the goods in shed, inspection of the samples and catalogues accompanying each item it revealed that the goods were of Japanese origin, as per markings on the lenses. Further the lenses were found to have two different types suitable for Nikon and Pentax.
1.2 The appellants vide their letter dated 7-10-1997 stated that they were not related to the supplier of goods and insisted that the declared value in the above invoice was genuine and correct. The appellants vide their further letter dated 9-10-1997 stated that the country of origin was Japan and it was by mistake that they had written the same as Hong Kong in the Bill of Entry. The appellant also submitted a fax copy of the price list of the supplier and certified the same to be true. A show cause notice was issued to the appellants on 20-11-1997 with grounds of undervaluation, as alleged.
1.3 Or adjudication, the adjudicating authority has essentially relied on the basis of prices allegedly disclosed on internet in respect of Vivitar lenses. These were considered by the adjudicating held out by the branch of the Manufacturers, Vivitar, Japan from their regional office in U.S.A. The Collector has, however, given a 25% discount on the aforesaid internet prices in order to account for the difference in freight from Japan to U.S.A. as well as overhead expenses 1.4 In view of the aforesaid enhancement in value of the goods, the Commissioner of Customs has held the goods as liable to confiscation under Section lll(m) of the Customs Act as having been grossly under declared in value. Consequently, he has confiscated the goods but has given an option to the appellants to redeem the same on payment of fine of Rs. 5,00,000/-. He has also imposed a penalty of Rs. 10,00,000/- on the appellants. Hence, this appeal before the Tribunal.
2. Learned Advocate Shri G.L. Rawal, drawing attention to the internet prices on which the Commissioner has based himself and a photocopy of which has been reproduced at page 30 of the Paper Book, states that ex-facie the said document showing the prices is not at all signed by anyone. It cannot, therefore, be relied for the purpose of taking any guidance from the said list. He also points out that it is apparent from the said document that the person who has displayed the list allegedly on the internet is also dealing in lenses not only of Vivitar but also of other companies when the list states as under :
"E-mail us (wholesale (c)shore.net) with your Vivitar or other lens needs. Include your zip code (US) or country (non-US) for a complete quote."
[Emphasis supplied by the Advocate] No manufacturer, he submits, will advertise goods for other persons as the aforesaid document indicates. This last sentence in the document, as extracted above, he submits, clearly shows that the document displayed on the internet cannot be the one displayed by the regional office of Vivitar. Apart from these apparent anomalies in the document, he points out that immediately after receipt of the show cause notice the appellants entered into correspondence with Vivitar (Asia) Ltd. Hong Kong, with reference to the said document relied on by the Customs authorities. The said correspondence is available at pages 51 to 55. At page 51 is a letter from the appellants to Vivitar (Asia) Ltd. the suppliers to investigate regarding the document concerned giving the internet code and the document. The correspondence from Vivitar(Asia) Ltd. indicates that no such document is available and they also stated that Vivitar (Asia) Ltd. have no dealer pricing shown on Vivitar U.S.A. Internet site. There are only recommended retail prices with Digital-Imaging products but they serve no purpose in dealer pricing in the States nor in any branches throughout the world. Regional branch offices have different pricing strategies. They also indicated that sighting of Vivitar product prices is probably through the web sites operated by other dealers/distributors structurally unrelated to Vivitar whatsoever. But it appears, submits the learned Advocate, that the Commissioner has totally ignored this correspondence brought on record by the appellants in the course of adjudication proceedings. He submits that in the face of the said evidence and on the apparent inspection of the documents relied upon by the Revenue no reliance can be placed in so far as the prices of imported goods are concerned. In support of this proposition, the learned Advocate relied on the judgement of Apex Court in the case of C.C.E. v. East Punjab Traders, [1987 (89) E.L.T. 11] wherein unsigned fax copy was declared to be of no evidentiary value by the Apex Court.
2.2 Learned Advocate further submits that neither the internet price nor the so-called baggage prices, referred to in the show cause notice and in the impugned order for the purpose of comparing with the prices declared by the appellants, indicate as to what quantity of goods can be purchased and what quality of goods on the said prices are available. The baggage prices, as alleged to be compiled by the Custom House, Bombay at Sahara International Airport do not indicate whether the prices relate to auto lenses or manual lenses and whether it is retail prices or whether it is relatable to prices for goods traded in wholesale and if so in what quantities. As regards the argument regarding the quantities, he makes a similar plea for not relying on the internet prices as referred to in the impugned order because [even there in the said document] the quantity for which the said price is valid is not indicated in the said document.
2.3 As against the aforesaid evidence of the department which is not worthy of being relied upon according to the learned Advocate, the appellant had given a fax copy of the suppliers' price list duly certified by the appellants and which has not been challenged by the Revenue as being non-genuine. He also submits that the appellants also showed to the adjudicating authority in the course of adjudication proceedings the manufacturer's price list from whose marketing branch at Hong Kong the appellants have imported the goods. He, therefore, submits that these prices declared cannot be discarded as not being the genuine transaction value in the absence of any other credible evidence regarding prices of contemporary imports of identical goods at the time and place of importation. For this proposition, learned Advocate relies on the following judgments :
(1) 1996 (81) E.L.T. 195 (S.C.), Para 3 Basant Industries (2) 1998 (98) E.L.T. 3 Paras 10 & 11 Meera Exports (3) 1998 (101) E.L.T. 172 Para 4 G.K. & Sons v. C.C.E., Calcutta.
He also draws attention to Rule 8 of the Customs Valuation Rules which specifically lays down in Sub-Rule (2) that no value shall be determined under the provisions of these Rules on the basis of :
"(i) the prices of the goods on the domestic market of the country of exportaion;"
(ii) the price of the goods for the export to a country other than India."
He, therefore, submits that in view of this rule the price of Vivitar lenses on the basis of internet document, as mentioned prevailing in U.S.A. possibly in the domestic market cannot be applied for the purpose of determination of value of the imported goods.
2.4 Lastly he submits that after the issue of the show cause notice the Customs authorities raided the residential-cum-office premises of the appellants nothing incriminating was found as is apparent from the panchnama, dated 26-11-1997. This also indicates that the show cause notice issued by the Revenue was apparently on no good evidence and even after the raiding of the premises no evidence at all was found by the Revenue authorities to incriminate the appellants. He, therefore, submits that the entire case made by the Revenue is totally without substance.
He, therefore, prays for setting aside the impugned order and allowing the appeal with consequential relief to the appellants.
3. The learned JDR, Shri K. Shiv Kumar for the Revenue reiterates the findings of the adjudicating authority who, as earlier stated, has essentially relied on the so-called internet prices, as mentioned above.
4. We have carefully considered the pleas advanced from both sides. We agree with the submission of the learned Advocate that department's reliance on the document displayed on the internet is totally misplaced for the reasons advanced by the learned Advocate, as mentioned above, namely :
(1) The document is unsigned.
(2) It is not known as to who has introduced the said document on the internet, and (3) What is the nature of price indicated in the said document, whether it is a retail price or a wholesale price.
In short, the document displayed on the internet is not worthy of reliance. It is doubtful whether this document can at all be taken as the "computer print out" fulfilling the conditions of Sub-section (2) of Section 138C of the Customs Act. It cannot be considered to be "computer print out" merely because it has been displayed on internet. Similarly, the baggage price relied on in the show cause notice has no evidentiary value for import of goods in the course of international trade. Further, as is rightly pointed out by the learned Advocate, these prices are merely the assertion of the customs authorities in the show cause notice without any documentary evidence in support of that assertion.
5.1 As against the unreliability of evidence produced by the Revenue, the Revenue authorities has not commented upon the manufacturer's price list given by the appellants as duly certified by them. There is no reason to disbelieve the same.
5.2 In the aforesaid facts and circumstances, the adjudicating authority has totally misdirected itself to discard the value declared by the appellants. Consequently, we set aside the impugned order and allow the appeal with resultant relief to the appellants.
Operative part of the order already pronounced.