Custom, Excise & Service Tax Tribunal
M/S American Eye Light Pvt. Ltd vs Commissioner Of Customs (Imports) on 18 October, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/298, 307/11 Mum
Arising out of Order-in-Original No. 12/2011/CAC/CC (I)/SHH Gr. VI dated 28.02.2011 passed by the Commissioner of Customs (Imports), New Custom House, Mumbai.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Shri. P.R. Chandrasekharan, Member (Technical)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
M/s American Eye Light Pvt. Ltd.
Shri Hanif U. Kapadia
:
Appellant
Versus
Commissioner of Customs (Imports)
Mumbai
Respondent
Appearance Shri N.D. George, Advocate for appellant Ms D.M. Durando, Dy Commissioner (A.R.) for respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri. P.R. Chandrasekharan, Member (Technical) Date of Hearing : 18.10.2012 Date of Decision : 18.10.2012 ORDER NO.
Per : P.R. Chandrasekharan The appeals are directed against order-in-original No. 12/2011/CAC/CC (I)/SHH Gr. VI dated 28.02.2011 passed by the Commissioner of Customs (Imports), New Custom House, Mumbai.
2. The appellant M/s American Eye Light Pvt. Ltd., filed a Bill of Entry No.967320 dated 17.09.2010 for the import of a consignment containing mixed consumer goods. During the IInd check assessment, the invoice value declared at Rs.5,76,002/- appeared to be too low and hence, the value was enhanced by the assessment group to Rs.11,51,495.33 and the importer paid a total duty of Rs.3,10,126/- on the enhanced value. In the meanwhile, intelligence was received regarding the consignment suggesting mis-declaration as well as under-valuation. Therefore, the SIIB (I) of Mumbai customs undertook 100% examination of the consignment in the presence of two panchas and the importers representative. The consignment consisted of 853 cartons containing various goods such as Glitter pens, pen holders, tissue holders, empty water bottles of metal, chess game, erasers, stickers, empty pencil pouch, magic jelly, sun glasses, empty sunglass boxes, metal frames without glasses LED TV and so on. On examination, it was found that in respect of nine cartons the goods were to be other than those declared and the goods also contained plastic toys. Since the country of origin was from China, in terms of DGFT Notification No. 82/(RE-2008) 2004-2009 dated 02.03.2009, import of toys from China requires a certificate from the competent authority and in as much as the impugned goods did not have any such certificate, it appears that the toys were restricted for imports. Since the goods were of mixed nature and did not carry any specification like model No., MRP etc., it was difficult to ascertain value based on the contemporaneous imports and the importer appellant had also not produced any manufacturers invoice. Therefore, to determine the assessable value of the goods under import, a market survey was conducted in which the authorized representative of the importer, the CHA participated. On the basis of the market survey, after providing for the trade margins, taxes and importers margin of profit, the assessable value of the goods were arrived at Rs.58,70,164/- and the value of the toys were arrived at Rs.40,723/- and the differential duty liability on the goods under import was arrived at Rs.12,66,910/-. A show-cause notice dated 30.12.2010 was issued proposing to revise the assessable value to Rs.59,10,887/- and demanding differential duty of Rs.12,66,910/- apart from proposing imposition of penalty on the appellant under Section 112/114A of the Customs Act, and on the Director of the appellant firm, Shri. Hanif Kapadia under Section 112(a)/114AA of the Customs Act. The Notice was adjudicated by the impugned order and the enhancement in value and consequential differential duty demand was confirmed. The goods were confiscated with an option to redeem the same on payment of fine of Rs.15 lakhs. Toys valued at Rs.40,723/- were absolutely confiscated under Section 111(d) of the Customs Act. Penalty of Rs.12,66,910/- under Section 114A on the appellant importer apart from a penalty of Rs.10,000/- under Section 112(a) were imposed. Penalties of Rs.1 lakh and Rs.2 lakhs were imposed on Shri Hanif Kapadia, Director of the importing firm under Section 114AA and 112(a) ibid respectively. It is against this order the appellant is before us.
3. The learned Counsel for the appellant makes the following submissions.
3.1 In the instant case, the value was initially increased from Rs.5,67,002 to Rs.11,51,495.33 by the assessing group. Further loading done now to Rs.59,10,887/- is not sustainable in law. He relies on the judgement of this Tribunal in the case of Hitaishi Fine Kraft Indus. Pvt. Ltd. vs. Commissioner of Customs, West Bengal 2002 (148) ELT 364 (Tri. Kolkata) in support of the above contention. The learned Counsel further submits that in respect of one item, the value has been determined on the basis of value obtained in internet and such value indicated in internet are not reliable and relies on the decision of this Tribunal in the case of Aggarwal Distributors (P) Ltd. vs. Commissioner of Customs, New Delhi 2000 (117) ELT 49 (Tribunal). As regards the items which have been found to be toys, the learned Counsel submits that in respect of one of the items namely Connect 4, the said item is a game and not a toy as held by the Honble Apex Court in the case of Pleasantime Products vs. Commissioner of Central Excise, Mumbai 2009 (243) ELT 641 (S.C.). Therefore, absolute confiscation of the item is incorrect in law. In view of the above he pleads for setting aside the impugned order.
4. The learned A.R. appearing for the Revenue on the other hand contends that initially the assessment was done on IInd check basis. Thereafter, the goods were examined 100% in the presence of independent witnesses and it was found that there was mis-matching of the items found in the consignment and the import declaration. Since most of the goods were not having any brand name or MRP, market survey was done to ascertain the value of the imported goods wherein the authorized representative of the importer participated and after the market survey was conducted, the values were determined and the appellant was shown the results of the said survey. The appellant agreed with the value determined therein and also paid duty on the enhanced value willingly and without any protest. In these circumstances, the appellant cannot turn around and now say that there was no mis-declaration on their part or the value has been arrived at incorrectly.
4.1 As regards the confiscation of the toys, the learned A.R. submits that plastic toys imported from China require a certificate from an appropriate authority. In the absence of such certificate the imports are restricted and therefore, absolute confiscation is justified. In the light of these submissions she prays for upholding the order passed by the adjudicating authority.
5. We have carefully considered the rival submissions.
6. As regards the reliance placed by the learned Counsel in the case of Hitaishi Fine Kraft Indus Pvt. Ltd. and Aggarwal Distributors (P) Ltd. (cited (supra)) we find that the facts involved in the case before us are distinguishable and therefore, the ratio of these decisions cannot be applied. When the value was initially enhanced, it was done without seeing the goods. On examination of the goods, it was found that there was gross mis-declaration in respect of nature of the goods as also their value. In order to ascertain the value of the goods a market survey was conducted in which the authorized representative of the appellant was present and the appellant also admitted to the valuation done on the basis of market survey in a statement dated 21.10.2012 recorded under Section 108 of the Customs Act, 1962. Further the appellant paid the differential duty of Rs.12,66,919/- willingly without any protest. Once the appellant has admitted to under-valuation and mis-declaration of goods and also discharged the duty liability willingly, he cannot turn around and now say that the valuation done by the customs authorities is not sustainable in law. It is a well accepted legal principle that admitted facts need not be proved. In view of the above, we do not find merit in the argument adduced by the appellant and we uphold the determination of the value by the customs authorities at Rs.59,10,887/- and the confirmation of duty demand thereon at Rs.12,66,910/- As regards absolute confiscation of goods valued at Rs.40,723/-, during the hearing before us, the appellant had pleaded for allowing re-export of these goods. We find merit in this request. Accordingly, we allow re-export of toys valued at Rs.40,723/- in accordance with law.
6.1 As regards the quantum of fine and penalty imposed on the appellant, considering the assessable value of the goods at around Rs.60 lakhs, the redemption fine imposed of Rs.15 lakhs is on the higher side. If we take the cum duty price, the same will come to Rs.75 lakhs approximately. Therefore, we reduce the redemption fine from Rs.15 lakhs to 7.5 lakhs.
6.2 Regarding the equivalent penalty imposed on the importer under Section 114A, we do not find any reason to interfere with the same as it is clear case of mis-declaration on the part of the appellant. Therefore imposition of equivalent penalty under Section 114A is justified. In as much as we have upheld the imposition of penalty under Section 114A, we do not find any reason to impose a nominal penalty under Section 112(a) and accordingly we set aside the same.
6.3 In the facts of the case, penalties on the appellant firm and its director are not warranted. Accordingly we set aside the penalties imposed on the Director of the appellant firm under Sections 112(a) and 114AA.
7. The Appeals are disposed of in the above terms.
(Pronounced in open Court) (Ashok Jindal) Member (Judicial (P.R. Chandrasekharan) Member (Technical) nsk 8