Custom, Excise & Service Tax Tribunal
Amulakh Shah vs Nhava Sheva on 12 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/417 to 419/2012
[Arising out of Order-in-Original No. 82/2011-12-CC (I) dated 16/03/2012 passed by the Commissioner of Customs (Import), JNCH, Nhava Sheva.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri Ramesh Nair, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Sangeeta Metals (India)
Arvind Kalidas Shah
Amulakh Shah
Appellants
Vs
Commissioner of Customs (Import)
Nhava Sheva
Respondent
Appearance:
Shri V.M. Doiphode, Advocate for the appellants Shri A.K. Singh, Additional Commissioner (AR) for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Ramesh Nair, Member (Judicial) Date of hearing: 12/09/2014 Date of decision: 26/09/2014 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
There are 3 appeals which arise from Order-in-Original No. 82/2011-12-CC (I) dated 16-3-2012 passed by the Commissioner of Customs (Import), JNCH, Nhava Sheva. Vide the impugned order, the ld. Adjudicating authority has confirmed a customs duty demand of `1,40,41,018.42 along with interest thereon on M/s Sangeetha Metal (India), the importer, apart from imposing an equivalent amount of penalty. He has also imposed penalties of Rs.10 lakhs and Rs.5 lakhs on S/Shri. Arun Kalidas Shah, the partner of the importing firm and Amulakh Vardichand Shah of M/s Goodluck Metal Corporation, the Commission Agent, on the imports of 21 consignments of stainless steel coils/sheets imported from M/s. Dai Ichi, USA, by grossly mis-declaring the value of imports. Aggrieved of the same, the appellants are before us.
2. Brief facts relating to the case are as follows. M/s Sangeeta Metal (India) (Sangeeta in short) imported 21 consignments of stainless steel coils/sheets from M/s Dai Ichi, USA, during the period November 2005 to November, 2006. The goods originated from Finland and were directly supplied to the appellant in India. Of the 21 consignments, in respect of 13 consignments Sri. Amulakh Shah of Goodluck Metal Corporation was the Commission Agent. Evidence of undervaluation was retrieved from the computer of Goodluck Metal Corporation where Sri. Amulakh Shah was the partner. Evidence of undervaluation in respect of the balance 8 consignments was received from Antwerp Customs (port of loading) through the Indian Embassy at Brussels. These evidences indicated that the total amount of customs duty sought to be evaded worked out to ` 1,40,41,018.42. The fact of undervaluation was also admitted by Arun Kalidas Shah, the partner of the importing firm and Amulakh Vardichand Shah of M/s Goodluck Metal Corporation, the Commission Agent, in their statements recorded under Section 108 of the Customs Act. On conclusion of the investigation, a show cause notice dated 26/03/2009 was issued for recovery of escaped duty along with interest and also proposing to impose penalties. The said notice was adjudicated by the impugned order wherein the duty demand was confirmed and penalties imposed. Hence the appeal.
3. The ld. Counsel for the appellants made the following submissions:-
3.1. Contents of statements of Sri. Arvind Shah and Shri. Amulakh Shah and the content of the computer print outs are contrary to the export declarations obtained from Belgium Customs and do not tally with the value declared in the export declarations in respect of 7 consignments. Therefore, no reliance can be placed on the computer print outs and the statements. Further Sri. Arvind Shah had told the investigating agency that the values indicated in the computer print outs are under negotiation.
3.2. Though export declarations were obtained in 15 cases, only in respect of 8 consignments, the same has been adopted for redetermination of value. In respect of 7 cases, the export declarations have not been considered at all, thus adopting a contrary stand and evidence by way of export declarations should be considered as more authentic. If the value declared in the export declarations are adopted uniformly and allowance is given to the grade of the goods imported, the differential duty demand would come down to ` 22.94 lakhs approx. in respect of 13 B/Es.
3.3. Export declarations relied upon is only for the goods imported by the appellants but the corresponding invoices of M/s GLR International shows many grades and higher quantity. If due weightage is given for the difference in grades and if contemporaneous prices of imports are taken, the differential duty liability in respect of 8 consignments would be only `13.40 lakhs approx. as against the confirmed duty demand of ` 63.53 lakhs approx.
3.4. Though the investigating agency had obtained information from Belgium Customs in respect of 21 export consignments, the same had not been made use of in all cases. If the values declared in the export declarations are taken as the basis, the differential value would be ` 2.93 crore approx. and the duty liability would be only ` 84 lakhs approx. and not `1.41 crore as determined in the impugned order.
3.5. As there are variations in values between those given in the export declarations and the statements/computer print outs, the best method of valuation that should have been adopted is by way of contemporaneous imports as envisaged under Rule 5 of the Customs Valuation Rules, adopting the lowest contemporaneous value.
3.6. Wrong exchange rates have been adopted for computing the values and while calculating the differential duty demand, which were pointed out during the adjudication proceedings. However, the adjudicating authority has not considered these submissions. In respect of B/E no. 97728 dated 28/11/2006, the actual quantity imported is 16.130 MTs while the demand has been made taking the quantity as 22.920 MTs. Thus, there are many errors in the computation of duty demand. Therefore, the matter should be remanded back to the adjudicating authority for correct determination of duty demand taking into account the various submissions made by the appellant.
4. The ld. Addl. Commissioner (AR) appearing for the Revenue re-iterates the findings of the adjudicating authority. He submits that the computer print outs retrieved from the computer maintained by the Commission agent clearly shows the difference between the value declared in the B/Es filed by the appellant and the actual value of transaction, both container wise and consignment wise. These values have also been admitted to be the actual values for the transaction by the importer as well as the commission agent through whom the purchase orders were placed. Therefore, reliance has been placed on these documentary evidences in respect of 13 consignments. As regards the balance 8 consignments, as no data was available in the computer maintained by the appellant, reliance has been placed on the export declarations made at the port of loading which show huge variation in the export values declared by the foreign supplier and the import values declared before the customs authorities. Both the appellant and the commission agent have admitted to gross mis-declaration in value. In these set of circumstances, no fault can be attributed to the method of determination of differential value and differential duty by the adjudicating authority. Accordingly he pleads for upholding the impugned order and rejecting the appeal.
5. We have carefully considered the rival submissions. Our findings and conclusions are discussed in the ensuing paragraphs.
5.1. We have perused the computer print outs recovered from Goodluck Metal Corporation, the commission agent. In respect of 13 consignments covered by 13 B/Es, the actual transaction values are available purchase order/invoice wise and container wise for the supplies made by Dai Ichi, USA. The said printouts also contain the description and grade of the material supplied. These printouts were shown to Sri. Arun Kalidas Shah, partner of the importing firm, who admitted that the values shown therein are the actual transaction values, for each of the 13 B/Es. Thus the data contained in the computer printout has been corroborated by the importer. Sri. Amulakh Vardichand Shah of M/s Goodluck Metal Corporation, the Commission Agent for Dai Ichi, USA, has also admitted that the data contained in the computer printouts reflect the correct transaction values in respect of the imports made by M/s. Sangeeta. These statements have not been retracted at any point of time. These are the figures that have been adopted for the purpose of determination of actual value of imports and the differential duty liability of ` 76,87,658.55 in Annexure A to the show cause notice.
5.2. A confessional statement given before a Gazetted Officer of Customs under Section 108 of the Customs Act is a valid piece of evidence under the Indian Evidence Act, as held by the honble apex Court in Romesh Chandra Mehta vs. State of West Bengal [ 1970 AIR 940 SC] and a lot of other decisions. Further in K.I. Pavunny Vs. Asst. Collector of Central Excise [1997 (90) ELT 241 (SC)], the honble apex court held that In a criminal trial punishable under the provisions of the IPC, it is now well settled legal position that confession can form the sole basis for conviction. If it is retracted, it must first be tested whether confession is voluntary and truthful inculpating the accused in the commission of the crime. Confession is one of the species of admission dealt with under Sections 24 to 30 of the Evidence Act and Section 164 of the Code..
The honble Madras High Court in the case of Govindasamy Raghupathy [1998 (98) ELT 50 (Mad)] and the honble apex court in the case of Systems & Components [2004 (165) ELT 136 (SC)] have held that - It is a basic and settled law that what is admitted need not be proved. If we apply the ratio of these decisions to the facts of the present case, the transaction values admitted in the confessional statements of the importer and the commission agent can straightaway be adopted for determination of the value which escaped the assessment and for the demand of differential duty liability. The argument of the appellant that the values contained in the export declarations made before Antwerp Customs should have been taken as the basis for determination of transaction value is not tenable for the reason the actual transaction value is available in the documents retrieved which has also been admitted by the appellant. Therefore, we do not find any infirmity in the adoption of values reflected in the computer printouts and the confessional statements as the basis for demand of differential duty in respect of the 13 B/Es.
5.3. In respect of 8 bills of entry, since no details were available regarding the actual transaction value, the revenue has adopted the values declared in the export declarations made at the port of export. This Tribunal in a number of decisions such as Weston Components Ltd. [2000 (118) ELT 199], RJS Studios [2000 (118) ELT 350] and Orson Electronics [1996 (82) ELT 499] has held that if export declarations filed at the port of export indicate a higher price for the goods than what is declared by the importer, the transaction value declared by the importer can be rejected and assessment can be made on the basis of values declared in the export declarations at the port of export. Further in his statement tendered under section 108 of the Customs Act, Sri. Arun Kalidas Shah, partner of the importing firm, has admitted that the values shown in the export declarations are the correct values for the transaction. Therefore, no fault can be found if the assessable value is redetermined on the basis of values declared in the export declarations and the duty liability determined accordingly. Thus the differential duty liability of ` 63,53,349.87 in respect of the 8 B/Es specified in Annexure B to the show cause notice is clearly sustainable in law and we hold accordingly.
5.4. As regards the argument of the appellant that the grades declared in the export declarations vary from those indicated in the invoices supplied by Dai Ichi and therefore, adjustments should be made for the variation in grades, this argument is bereft of logic. It is not in dispute that the goods were loaded at Antwerp in containers which were consigned directly to India. It is not the case of the appellant that these containers were opened anywhere in between before their arrival in India or the goods were replaced. The port declarations at Antwerp not only contains the value of the goods supplied but also the description (both quantity and grade) of the goods supplied. If the export declarations can be adopted for determination of value, they can also be relied upon for the description of the goods supplied also. In other words, what the appellant received was goods of the grade specified in the export declarations. Thus the inference is that the appellant mis-declared the grade of the goods also in the B/Es filed before the Indian Customs. If duty evasion can be resorted to by mis-declaration of value, the same can be done by mis-declaring the grades of the goods received. The appellant having admitted to evasion of duty cannot take the plea that he indulged in mis-declaration of only the value and not quality of the goods. Therefore, the question of making any adjustment in the assessable value on the basis of variation in the grades or any other ground will not arise at all. Accordingly, we reject this ground taken by the appellant. Another argument has been made that the rates of exchange adopted in some cases are wrong. This argument also does not sustain for the reason that the show cause notice (in the annexures) itself gives the details of the notifications on the basis of which the exchange rate is calculated. We find that these were the relevant notifications in force at the time of imports and hence no discrepancy can be attributed to the duty calculations.
5.5. The last issue for consideration is with regard to imposition of penalties. As the appellant has indulged in mis-declaration of values in respect of a number of consignments making the goods liable to confiscation under Section 111(m), the provisions of Section 114A are attracted and therefore, imposition of equivalent amount of penalty is justified. Considering the significant amount of duty evaded and the role of the partner Shri. Arun Kalidas Shah in mis-declaration of value, imposition of penalty is justified and the amount of penalty imposed of Rs.10 lakhs cannot be said to be excessive. Imposition of penalty on Shri. Amulakh Vardichand Shah of M/s Goodluck Metal Corporation, the Commission Agent, is also justified in view of his active involvement in the mis-declaration of values leading to evasion of duty and consequential liability to confiscation of goods. It is a settled position in law that it is liability to confiscation and not actual confiscation which attracts penalty. The decision of the honble Madras High Court in Dadha Pharma Pvt. Ltd. [2000 (126) ELT 535 (Mad)] refers. Since in the present case, the goods are held liable to confiscation under section 111(m) of the Customs Act, imposition of penalties on the above persons cannot be found fault with.
6. In view of the factual and legal analysis as discussed above, we do not find any infirmity in the impugned order. Accordingly we dismiss the appeals as devoid of merits.
(Operative part of the order pronounced in the Court on 26 /09/2014) (Dictated in Court) (Ramesh Nair) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 12