Custom, Excise & Service Tax Tribunal
Cc, Chennai-I vs M/S. Novel Digital Electronics on 26 October, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/279/2005
(Arising out of Order-in-Appeal C.Cus.No. 916/2004 dated 27.12.2004 passed by the Commissioner of Customs (Appeals), Chennai).
CC, Chennai-I : Appellant
Vs.
M/s. Novel Digital Electronics : Respondent
Appearance Ms. Indira Sisupal, AC (AR), for the Appellant Shri B. Satish Sundar, Adv., for the Respondent CORAM Honble Shri R. Periasami, Technical Member Honble Shri P. K. Choudhary, Judicial Member Date of Hearing: 26.10.2015 Date of Pronouncement:
FINAL ORDER No. 40215 / 2016 Per P. K. Choudhary The brief facts of the case are that M/S Novel Digital Electronics, the respondent herein had filed a Bill of Entry No.518662 dated. 08-08-2002, which consisted of cables and connectors. The said bill was assessed on second check under DEPB scheme after accepting the declared value. Later, the Officers of the Directorate of Revenue Intelligence, Chennai, were in receipt of intelligence that the respondent had filed the said bill of entry by misdeclaring the goods in terms of the required specifications and their description. On examination it was found that the imported goods were wiretek brand cables and connectors for computers, and the respondents have only declared two items namely cables and connectors and had deliberately not declared / suppressed the brand name/ length of the cables, specifications etc. The investigation further revealed that Shri Dinesh D. Bajaj, proprietor of the respondent firm, had given in his voluntary statement dated 20-08-2003, 23-09-2003 and 08-10-2003 wherein he had stated that it was under his instructions that the overseas supplier, had not given any specifications in the import documents with a view to pay lesser duty. The duty of Rs.5,06,222/- including the duty amount of Rs.98,184/- was discharged by the respondent.
2. A show cause was issued to the proprietor Shri Dinesh D. Bajaj as to why, (i) the values declared in respect of the goods imported under Bill of Entry No. 518662/8.8.03 should not be rejected;
(ii) the total assessable value, should not be determined as Rs. 9,96,496/- under Rule 8 of the Customs Valuation Rules, 1988 read with Section 14(1) of the Customs Act, 1962;
(iii) the total duty of Rs. 5,11,282/- in respect of Bill of Entry No. 518662 dated 8.8.2003, should not be levied and the total differential duty of Rs. 4,13,158/- should not be demanded under Section 28 (1) of Customs Act, 1962.
(iv) the amount of Rs. 5,06,222/- already paid by the said NDE should not be adjusted against the total liability
(v) the entire goods covered under the said Bill of Entry totally valued at Rs. 9,96,496/-(CIF) should not be confiscated under Section 111 (m) of the Customs Act, 1962; and
(vi) a penalty should not be imposed on him under Section 112(a) of the Customs Act, 1962. In response to the said notice, the proprietor had denied the allegations in the show cause notice. The allegation that the respondent had filed Bill of Entry by misdeclaring/not declaring the full description and other required specifications was emphatically denied. The further allegation that there has been evasion of payment of duty was denied by stating that the said allegations were unsustainable as they were decided without specifying what has not been declared/ what are the specifications have not been made known; that there was no material even of probative value to sustain the allegation of misdeclaration of value and of the goods; that the goods declared in the Bill of Entry was, what was found during the course of examination and merely by not declaring the part number or the length of cables would not amount to misdeclaration/non-declaration; that there was no special relationship, that the proposal to adopt Rule 8 of the Customs Valuation Rules, 1988, to enhance the value was unsustainable. It was also contended that the goods were not liable for confiscation nor was penalty imposable in the said case.
3. After affording an opportunity of hearing, the adjudicating authority held that during the course of investigations, the proprietor had categorically accepted that he had not declared the actual specification with a view to pay lesser amount of duty and it was under his instructions that the supplier had not given any specifications in the import document. The proprietor had worked out the actual amount payable and had paid the differential duty during the course of investigation itself. If the value declared in the subject goods were true, it would have been objected to by the proprietor. There is a vast difference between simply saying plastic cables and connectors and wiretek brand cables. In this subject case also Shri Dinesh D. Bajaj agreed for the enhancement without any protest and paid the differential duty. In his various statements also he stated that he only asked the supplier not to declare the brand, model, etc., with a view to pay lesser duty. Again in this case, a fair opportunity was given to him to come out with his own value to be paid to the overseas supplier and the same was accepted by the investigating agency. Consequently, the adjudicating authority had rejected the value declared in the Bill of Entry and had re-determined the value as Rs.9,96,496/-. The differential duty of Rs.4,13,158/- was appropriated against the amount of Rs.5,06,222/-. The goods were confiscated under section 111(m) of the Customs Act, 1962 with an option to redeem the goods on payment of a fine of Rs.1,00,000/- U/S 125 of the said Act. A penalty of Rs. 75,000/- was imposed U/S 112(a) of the Customs Act, 1962. Being aggrieved with the Order-in-Original an appeal was filed before the Commissioner (Appeals). The authority had framed the following two issues to be decided:
a) Status of statement which was used as a basis for rejecting the declared value and determining the value.
b) The methodology of valuation The Commissioner (Appeals) had held that the respondent herein had sought to retract his earlier statement in their reply to the show cause notice and during the personal hearing. The case of Vikas Spinners Vs CC 2000(128) E L T 143 (T) was held to be inapplicable as the duty was paid by the respondent herein even before the issuance of show cause notice. The value was ordered to be loaded only in the Order-in-Original which was issued after due course of law and there was nothing on record to suggest that the respondent had paid the duty without issue of show cause notice or after foregoing the option of personal hearing. This itself would suggest that they would have paid the duty under protest. Further reliance was placed on the Tribunal ruling in the case of Nina Chaka Pvt. Ltd Vs. CC, New Delhi 2004(163) ELT 464 and had consequently set aside the Order-in-Original. Being aggrieved by the Order-in-Appeal, the Department had filed the instant appeal on the following grounds:
a. That the goods were declared by their generic descriptions only without any brand name, specifications and other details. The proprietor of the importing firm in his voluntary statement dated 20.08.2003, 23.08.2003 and 08.10.2003, under Section 108 of the Customs Act, 1962 stated that he had instructed his overseas supplier not to give any specifications in the import documents, viz., Bill of Lading, Invoice, and the Packing list and that he had mis-declared the actual specifications with a view to pay lesser amount of duty.
b. That the Honble Tribunal in the case of Prasant Glass Works (P) Ltd., Vs. Collector 1996 (87) ELT 518 (Tri.) has held that the proposition that the transaction value as shown in the invoice has some sanctity and the burden is on the Department to collect evidence to show that the invoice value is not genuine or below ordinary price in International Trade at the time and place of import cannot be applied to cases of import where the description is substantially inadequate, incomplete or erroneous and in such cases, the question of accepting transaction value does not arise. The Tribunal in the above case further indicated that the Bill of Entry must refer to description of the goods and the description is complete and adequate if it refers to the correct specification, brand name and other particulars.
c. That the value to be attached to invoice price may depend on a variety of circumstances. Inadequate, incomplete or incorrect or misleading description may affect the reliability of the invoice price.
d. That customs authorities do not inspect and examine all the goods imported and conduct only sample checks. Incorrect, inadequate or incomplete description in cases where the goods are not inspected and checked may mislead customs officers.
e. That the declared value is not acceptable on account of non-disclosure of the brand and specifications by the importer and hence there is only the question of finding out the ordinary price in International Trade at the time and place of import, for which any reasonably reliable method can be followed.
And for the above stated reasons, it was prayed that the O-in-A may be set aside and the original authoritys order be restored.
4. Heard both sides and on perusal of the records we find that the respondent assessee had declared the consignment as cables and connectors but had failed to mention that the impugned goods were wiretek brand connectors and cables for computers. We further find that the imported goods as per records were of thousand meters running length and cables packed in 20 cartons which were of 100 meters running length. On market enquiries it was ascertained that three sets of values of similar goods were also ascertained which are quoted in the Order-in-Original. It was further ascertained that there was a comparison with the market values of similar goods and the value declared by the respondent herein was on the lesser side. We find that there has been a voluntary statement in which the prop had accepted that he had not declared the actual specifications with a view to pay lesser amount of duty and it was only under his instructions that the supplier had not given any specifications in the import documents. The Ld Counsel for the respondent had stated that on receipt of the show cause notice there was a denial on the allegation of misdeclaration of value and the goods. We find that the retraction was not made in the instant case and in the rebuttal to the allegations contained in the show cause notice, there was an allegation of error in the investigation and the whole evidence was very vague. This, to say the least, is a clear after thought. The Supreme Court judgment in the case of case of K. I. Pavunny Vs A C (HQ) CEX , Cochin reported in 1997 (90) ELT 241 (S.C.) relied upon by the AR. Para 25 is reproduced below.
25.?It would thus be seen that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or to make the same basis for conviction of the accused. The practice and prudence require that the Court could examine the evidence adduced by the prosecution to find out whether there are any other facts and circumstances to corroborate the retracted confession. It is not necessary that there should be corroboration from independent evidence adduced by the prosecution to corroborate each detail contained in the confessional statement. The Court is required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise. If the Court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. If the Court on examination of the evidence finds that the retracted confession is true, that part of the inculpatory portion could be relied upon to base conviction. However, the prudence and practice require that Court would seek assurance getting corroboration from other evidence adduced by the prosecution. The learned counsel relying on the judgment of the Tribunal in the case of Nina Chaka Pvt. Ltd. Vs. C. Cus (Supra) would not apply to the facts of the present case as there was no acceptance of misdeclaration and or misdescription of value and goods in that case.
5. In view of the aforesaid reasons, the finding of misdeclaration of value and misdescription of the goods are sustained. Consequently, the impugned order in appeal is set aside and the order of the adjudicating authority is restored. Accordingly, the appeal filed by the revenue is allowed.
(Pronounced in open court on ___________)
(P.K. CHOUDHARY) (R. PERIASAMI)
Judicial Member Tehnical Member
BB
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