Custom, Excise & Service Tax Tribunal
M/S.Manoj Kumar Sanjay Kumar vs C.C., New Delhi on 3 May, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Customs Appeal No.C/678/2008
[Arising out of Order in Original No.55/2008 dated 19.09.2008 passed by the Commissioner of Customs, New Delhi].
M/s.Manoj Kumar Sanjay Kumar Appellant
Vs.
C.C., New Delhi Respondent
Present for the Appellant : None
Present for the Respondent:Shri.P.K. Sharma, DR
Coram: Honble Mr.D.N.Panda, Judicial Member
Honble Mr.Manmohan Singh, Technical Member
Date of Hearing/Decision: 03.05.2013
FINAL ORDER NO. 56397/2013 DATED: 03/05/2013
PER: D.N.PANDA
10 containers imported under bill of entry No.635823 dated 08.10.2007 were found to be vegetable oil instead of declared description of vegetable fatty acid. Customs drew sample from the container No.TEXU 3337205 and sent the same to Shriram Laboratory for testing. The test report resulted with the conclusion that the goods to be vegetable oil. To further confirm, samples were also sent to CRCL for testing. Test result report of CRCL also was in the similar line without ruling out import vegetable oil. Appellant was confronted with the test report and was called upon to explain why valuation of the goods shall not be disturbed by upward revision.
2. Material facts noticed by investigation as depicted in para 23 of adjudication order were as under:-
(i) M/s Manoj Kumar Sanjay Kumar, the importer indulged in fraudulent trade and import of Fatty Acid and Vegetable Oil by mis-declaring the description as Vegetable Fatty Acid as well as its value.
(ii) Sh. Manoj Gupta, Prop. of M/s Manoj Kumar Sanjay Kumar, Delhi had finalized the contract of purchase, approved the quality and prices of the said goods so imported by his firm M/s Manoj Kumar Sanjay Kumar which confirmed that he was aware of the true character and description of the goods. It is evident that it was he who negotiated and contracted the description and value of the imported goods i.e. Fatty Acid and Vegetable Oil @ 410 USD PMT (CIF) and that on his direction his foreign supplier issued the invoices of less value of customs for clearance of goods imported by him with willful intent to evade customs duty. Facts above confirms that he had full knowledge of the actual prices and description of the goods but he illegally imported the said goods by way of mis-declaration of their correct description and actual value.
(iii) The value mis-declared by M/s Manoj Kumar Sanjay Kumar before the customs authorities as mentioned in the invoice which could not be treated as correct transaction value as stipulated under the law in view of the fact that at the relevant time, the prevailing value in the international market for the said goods, i.e. Palm Fatty Acid was much higher as published in monthly Export Price Bulletin of Palm Fatty Acid Distillate and issued by the Malayasian Palm Oil Board. Sh. Manoj Gupta (the Importer) also admitted the undervaluation of the goods in his statement dated 15/11/2008. The actual transaction value of the goods i.e. Palm Fatty Acid covered by Bill of Entry No. 635823 dt. 08/10.2007 are correctly determinable @ USD 528 PMT, as per the law as discussed supra. [Emphasis supplied]
3. When the appellant was examined his statement revealed that the imported consignment was not fatty acid but vegetable oil. Investigation found that one Shri Manoj Kumar was mastermind behind the import for fraudulent declaration of the description of the goods, so also undervaluation was the methodology adopted. Following allegations were accordingly made against the appellant.
(a) that Sh. Manoj Gupta was the mastermind behind the fraudulent import of Palm Fatty Acid on undervaluation and Crude Oil in the guise of Vegetable Fatty Acid through his firm M/s Manoj Kumar Sanjay Kumar by presenting fabricated import documents so as to manage the import of goods under valued and mis-declared them to evade customs duty.
(b) that Sh. Manoj Gupta, proprietor of M/s Manoj Kumar Sanjay Kumar fraudulently imported consignments of Fatty Acid and Crude Vegetable Oil (Palmolein) by suppressing their correct transaction value and description.
(c) that Sh. Manoj Gupta, prop. of M/s Manoj Kumar Sanjay Kumar in his voluntary statement dated 15/11/2007 admitted the under valuation of the subject goods;
(d) that on testing, the goods covered by Bill of Entry No. 635823 dt. 08.10.2007 were found to be Fatty Acid with rich contents of natural oil and Crude Oil which were attempted to be imported under the guise of Vegetable Fatty Acid with the sole intent to evade customs. It is further proved by the documentary evidence, and statement of Sh. Manoj Gupta that these goods were imported in contravention of section 46 of the Customs Act, 1962 and Bill of Entry (From) Regulations, 1976 read with sections 3 & 11 of Foreign Trade (Development & Regulation) Act, 1992; Rule 11 and rule 14 of the Foreign Trade (Regulation) Rules, 1993 and rule 3 of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order 1993, By way of mis-declaration of their description and actual transaction value with fraudulent and willful intention to evade duty. The said goods, therefore, appear to be liable to confiscation under section 111 (d) and (m) of the Customs Act, 1962;
(e) that the goods imported vide Bills of Entry No. 635823 dt. 08/10.2007 were declared as Vegetable Fatty Acid with fraudulent intention, which were on their test found to be Fatty Acid with rich natural oil and Crude Vegetable Oil;
(f) that the goods covered under said Bill of Entry No. 635823 dt. 08.10.2007 appear to be liable to confiscation under section 111 (d) and (m) of the Customs Act 1962, read with provision of section 3 & 11 of Foreign Trade (Development & regulation) Act, 1992 rule 11 & 14 of the foreign Trade (Regulation) Rules, 1993 and rule 3 of Foreign Trade (Exemption from Application of Rules in Certain Cases) Order 1993 being mis-declared in respect of their description and value with willful fraudulent intention to evade customs duty.
(h) that by adopting aforementioned fraudulent modus operandi, M/s Manoj Kumar Sanjay Kumar attempted to evade customs duty amounting to Rs.13,18,177/- leviable on such imports by way of willful mis-statement and suppression of facts in respect of description and value. Therefore, the said duty amounting to Rs.13,18,177/- attempted to be evaded appears to be liable to be demanded and confirmed, as per Annexure-A to the show cause notice, under section 28(1) of the Customs Act, 1962;
(i) that various acts of omission & commission of M/s Manoj Kumar Sanjay Kumar, as discussed hereinbefore, have rendered the goods imported vide Bill of Entry No. 635823 dt. 08/10.2007, liable to confiscation under Section 111 (d) & 111 (m) of the Customs, Act, 1962 which acts of omission & commission also amount to smuggling as defined under section 2(39) of Customs Act, 1962. It, thus, appears that M/s Manoi Kumar Sanjay Kumar is liable to be penalized under section 112 (a) & (b) of the Customs Act, 1962;
(j) that M/s Manoj Kumar Sanjay Kumar has not paid the full duty leviable on the goods imported by it, by resorting to wilfil misstatement and suppression of facts. It appears that M/s Manoj Kumar Sanjay Kumar is also liable to penalty under section 114A of the Customs Act, 1962;
(k) that Sh. Manoj Gupta, prop. of M/s Manoj Kumar Sanjay Kumar controlled and managed the said fraudulent import by suppressing and mis-declaring the correct description and transaction value of the said goods willfully unde4r-valued the imported goods, with the fraudulent intention to evade customs duty. He also admitted gross under-valuation of the goods at the time of their importation for evasion of custom duty. Sh. Manoj Gupta through and by his acts of omission and commission as discussed hereinbefore, rendered the goods imported under Bill of Entry 635823 dt. 08.10.2007, liable to confiscation under section 111 (d) & 111(m) of the Customs Act, 1962, Sh. Manoj Gupta was also concerned with carrying removing keeping, depositing, deposition, selling and dealing with the said imported goods which he knew and had reasons to believe that they were liable to confiscation under section 111 of the Customs Act, 1962. Accordingly, it appears that Sh. Manoj Gupta is also liable to penalty under section 112 (a) & (b) and/or 114A and 114AA of the Customs Act, 1962. [Emphasis supplied]
4. The appellant could not defend its case against the allegation made by customs as to the description of the goods as well as undervaluation. The test report remained un-rebutted. Accordingly, adjudication was made with the following consequence:-
(i) Goods imported under Bill of Entry No. 635823 dt. 08.10.2007 by M/s Manoj Kumar Sanjay Kumar, Hisar, under section 111 (d) and section 111(m) of the Customs Act, 1962 was confiscated. Since goods of nine containers were already been released provisionally and were not available for confiscation and goods of one container No.TEXU 3337205 were available with Customs. Total fine of Rs.5,00,000/- (Rupees five lakhs only) was imposed in lieu of confiscation. On payment of such fine, the goods imported in container No. TEXU 3337205 was ordered to be released to M/s Manoj Kumar Sanjay Kumar on further payment of the appropriate amount of total duty, including the differential duty as determined and demanded vide his order.
(ii) Declared unit price of USD 420 PMT of the goods imported by under Bill of Entry No. 635823 dated 8.10.2006 was rejected under section 14 of the Customs Act, 1962 read with rules 4 and 10A of the Customs Valuation (Determination of Prices of the Imported Goods) Rules 1988. Value of the goods was re-determined @ US$ 528 PMT under section 14 of the Customs, Act, 1962 read with rules 3(2) and 9 of the Rules ibid and section 18(2) of the Customs Act 1962 Act in respect of the goods in nine containers that was already cleared. He also re-determined the value of the Crude Palm Olein found in the 10th container of Tariff Value which was fixed at USD 481 PMT.
(iii) Differential customs duty of Rs.3,26,827/- was demanded under section 28 of the Customs Act, 1962, alongwith interest payable thereon in terms of the provisions of Section 28AB of the Customs Act, 1962.
(iv) Penalty of Rs.3,26,827/- was imposed on M/s Manoj Kumar Sanjay Kumar, Hisar under section 114A of the Customs Act, 1962.
(v) No penalty was imposed on Shri Manoj Gupta, proprietor of M/s Manoj Kumar Sanjay Kumar.
5. Appellant is not present today. The matter relates to 2008. Interim order was passed on 18.11.2001 waiving predeposit on the ground that goods worth Rs.3,26,827/- was lying with the department. Already 4 years have expired. It is not proper to keep the appeal pending to allow further benefit of interim order to the appellant who does not turn up to raise its defence.
6. Revenue was heard and grounds of appeal of the Appellant were perused. It is contention of Revenue that when the test report remained un-rebutted and contents of the test report as has been succinctly depicted in para 5 and 6 of adjudication order read with table under para 12 of the adjudication order established case of Customs that there was mis-declaration of the goods for which undervaluation made by the appellant was bound to be discarded. It was also pointed out that when admission of the appellant came to record proving mis-declaration made consciously, following standard guideline of Palm Oil Refiners Association of Malaysia, value of the goods was rightly determined on the basis of the quality of the goods. Adjudicating authority has not only based its decision on the confessional statement of the appellant to adjudicate but also based adjudication on several other factors like test report of the Shriram Institute, test report of CRCL, guidelines of Malaysia Institute and the fraudulent methodology followed by Appellant under the guidance of the master minded person Shri Manoj Gupta.
7. We have considered submissions of Revenue and also looked into the various allegations made in the show cause notice as well as test results came out from 2 different laboratories. It is undeniable that the goods were vegetable oil when the respective contents of the vegetable oil were present. It is also a fact on record that the appellants awareness as to the contents of the goods as vegetable oil is evident from record when the goods were edible in nature.
8. We have looked into para 29.3 of the adjudication order which clearly depicts the mind of ld. Adjudicating Authority as to the valuation on the basis of his finding in para 29.2 of the adjudication order showing application of the test result with the Palm Oil Refiners Association of Malaysia guidelines. He found that the parameters of the guidelines were very well present in the case as was evident from Shriram Institute Laboratory report.
9. Undervaluation was an established fact in the present appeal when the goods were mis-declared. The appellant having failed to establish the description of the declaration, that established undervaluation by nature of the goods. However, we looked into reasonability of valuation which we found to be proper, when the authority applied Rule 8 of the Customs Valuation Rules 1988. Therefore, the adjudication remained untouched by us for which, the appeal is dismissed.
[Dictated & Pronounced in the open Court].
(MANMOHAN SINGH) (D.N.PANDA) TECHNICAL MEMBER JUDICIAL MEMBER Anita 1 9 C/678/2008