Custom, Excise & Service Tax Tribunal
M/S. Martwin Electronics vs Commissioner Of Central Excise & S.T., ... on 23 September, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : C/153,154/2007, C/180/2007 (Arising out of OIO-10/COMMR/OA/06 dated 14.12.2006 passed by Commissioner Central Excise, Service Tax & Customs, Ahmedabad) M/s. Martwin Electronics : Appellant (s) Shri Chandrakant K. Zangda M/s. Rachana Electronics VERSUS Commissioner of Central Excise & S.T., Ahmedabad : Respondent (s)
Represented by :
For Appellant (s) : Shri Ravinder Jain, Consultant For Respondent (s) : Shri Alok Srivastava, Authorised Representative For approval and signature :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical) 1 Whether Press Reporter 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? 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 CORAM :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical) Date of Hearing : 27.07.2015 Date of Decision : 23.09.2015 ORDER No. A/11335-11337/2015 dated 23.09.2015 Per : Mr. P.M. Saleem;
The appellants herein have filed three appeals against the same order-in-original No. 10/COMMR/OA/06 dated 14.12.2006 passed by the Commissioner of Customs, Ahmedabad. Hence, all the three appeals are taken up together for disposal.
2. The reported facts of the case are that, on an intelligence that M/s. Martwin Electronics, situated at 366, 2nd Floor, Ahmed Mansion, Lamington Road, Mumbai indulged in undervaluation of electronic components imported from Hong Kong, the officers of DRI, Mumbai searched the common office-cum-residence premises of M/s. Martwin Electronics and M/s. Rachna Electronics (appellants herein) on 07.7.1995. Investigations were also conducted at Hong Kong with regard to the exports made by M/s. Batshita International Limited (supplier) of the appellants. Shri Chandrakant Zangda Proprietor of M/s. Martwin Electronics and M/s. Rachna Electronics, on 04.12.2005 in the statement recorded under Section 108 of the Customs Act, 1962, deposed that in respect of the imports made by him, no purchase orders had been given in writing and the orders were given on telephone only and that he paid the amounts in 6 to 8 months from the import. He further stated that the imports were made by him through Air Cargo Complex, Ahmedabad and Custom House, Mumbai.
3. The subject matter involved in the present appeals revolve around the import of ICs, Diodes, Transistors, Transducers, Thyristrers, Triac, Diac, Capacitors etc. at Ahmedabad Air Cargo complex during the period from November 1993 to July 1994, covered by 16 Bills of Entry as detailed in the Annexure A to the show cause notice dated 06.11.1998. It is alleged in the show cause notice that the appellants had undervalued the impugned goods in as much as the value shown in the corresponding export declarations filed by the supplier before the Hong Kong Customs authorities are much higher than those reflected in the invoices submitted by the importers in India. During the course of investigation, the appellants have not been able to explain the huge difference between the two values i.e., declared value of Rs 13,36,230.05 vis-`-vis export declarations value of Rs 88,26,462.14. The matter was adjudicated by the Commissioner vide OIO No. 10/Commissioner/2000 dated 26.09.2000 wherein, he confirmed the demand of duty of Rs. 71,15,105/-along with interest and held the goods liable to confiscation. He also imposed penalty of equivalent amount of duty of Rs. 71,15,105/-, under Section 114A read with 112 of the Customs Act, 1962. A personal penalty of Rs. 25,00,000/- was also imposed on Shri Chandrakant Zangda, Proprietor/ Partner of the appellant Companies, under Section 112(a) and (b) of the Customs Act, 1962.
4. Aggrieved by the said order, the appellants filed appeal before the Tribunal. The Tribunal set-aside the impugned order and remanded the matter vide order No. A/364-366/2006-CII CSTB dated 05.05.2006 with the following observations Having been granted only one date of hearing, which the appellant sought adjournment on account of compelling reason, cannot be called as grant of effective opportunity to the appellants to defend himself. As such, we are constrained to set-aside the impugned order on this short ground itself and remand the matter to the Commissioner for fresh adjudication.
5. In de-novo proceedings, the Commissioner vide the impugned order confirmed the demand of duty on the appellants along with interest. The impugned goods were held liable for confiscation. Equivalent amount of penalty was also imposed on the appellant companies and penalty of Rs. 25 Lakhs was imposed on Shri Chandrakant Zangda, under Section 112(a) and (b) of the Customs Act, 1962.
6. Heard both sides. The contention of the learned Consultant is that the department has built up its case on the basis of export declarations filed by the suppliers of the goods M/s. Batshita International Limited. He submits that the enquiry reports obtained from the Customs at Hongkong and the export declarations are inadmissible as evidence. Learned Consultant further submits that these declarations are photocopies and they are not signed by the authorised signatory, and that there are many discrepancies between the export declarations and in the invoices etc. He also relied upon case laws of the Honble Apex Court and the Tribunal. On the other hand, the learned Authorised Representative for the Revenue strongly rebutted the contentions of the learned Consultant and submits that export declarations were admissible under the provisions of Section 139(ii) of the Customs Act, 1962. He further submits that the export declarations were obtained through official channels from the Customs and Excise Department of Hong Kong under proper signature and seal of the concerned authorities. He also submits that these declarations are signed by the merchandiser and the exporters and they are legal documents binding on the exporters and appellants who imported the said goods under the said documents. He also refuted the contention of the learned Consultant that there are many discrepancies between the export declarations and the invoices. He submits that the export declarations contain numerous data and almost the entire particulars matches with the invoices, except in a few cases wherein there are small discrepancies which have been examined in detail by the adjudicating authority.
7. We find that adjudicating authority has extensively dealt with the appellants contention of admissibility of the export declarations and the question of discrepancies raised by the appellants. For better appreciation, the same is reproduced below:-
36 The importer has argued that department had solely relied on the extraneous documents and drawn attention to the infirmities in the export declarations like that they are copies of the export declarations; that they did not bear attestation of/authentication by the customs authorities; that many declaration show country of origin as India; that in many cases export declarations have been prepared later to be the date of dispatch. I have seen the copies of the declarations, and though these are the copies of the export declarations, the Hong Kong Customs authorities vide their letter dated 19.04.96, have acknowledged that they had forwarded these declarations, which in a way, attests to the veracity of the declarations. Some declarations do show India as Country of origin but at the same time these declarations also show India as the Country of destination too. This could have been shown by a mistake. However, since all other details in the export declaration tally with the details in the Invoice, this simple technical mistake does not make significant difference. As regards the importers argument that thee declarations had been prepared later to the date of dispatch, it could be so because, it were required by the laws of the country, where they were filed. Further in this context this may also be relevant to mention that in all these cases the declarations in fact bear a specific date which is either same as that of dispatch or just one or two days later. Therefore, it can be inferred that the date of declaration are very much relevant to the actual date of dispatch of export of impugned goods from Hong Kong.
37 Similarly, I have also examined other discrepancies pointed out by the Importer and I observe that they are not very substantive and are of very technical nature. For example in one case it has been pointed out with reference to the Invoice no. BIL 3303440 dated 10.01.94 that the quantity mentioned in Invoice is 5,00,000 pcs. Whereas in Export declaration it is 2,50,000 pcs. However, on perusal of the relevant export declaration dated 13.01.94, it is noticed that the quantity is mentioned as 2,50,000 PRS i.e. Pairs, and therefore obviously 2,50,000 Pairs would make 5,00,000 pcs. The submissions made by the importer/notice in their reply therefore do not represent the truth as there is no discrepancy in the Invoice and Export declaration as has been made out by the noticee. Similarly, in another case with reference to Invoice no. BIL 3303441 dated 10.01.94, it has been pointed out that export declaration shows Rachana Electronics as consignee while Invoice shows Martwin Electronics. They have also submitted that export declaration is not signed by the authorized person However, on perusal of the relevant export declaration it is seen that this is signed. As regards change in the name of consignee, it is observed that postal address of both the firms is same i.e. 366, Ahmed Mansion, Lamington Road, Mumbai-400007 and that Shri C.K. Zangda was looking after the business of both the firms, and therefore it was not going to make any material difference whether goods were consigned in the name of M/s Rachana Electronics or M/s Martwin Electronics. Thus, the discrepancies pointer out by the importer appear insignificant and merely technical in nature and hence are not relevant to the basic issue involved in the S.C.N. which is undervaluation of the goods imported by the naticees and which is clearly established by the export declaration.
38. It is further noticed that the Importer/noticee, on their part, have not come pu with any evidence to show that the value declared by them was indeed the correct transaction value of the goods imported. In this regard, it will be pertinent to point out that Shri C.K. Zangda, the proprietor of the Importer, in his statement dated 04.12.1995, had categorically admitted that no purchase order had been given to them in writing and that he had placed order(s) on phone only; that M/s Batshita international Ltd. was sending quotations for goods but no correspondence was maintained by him. It is quite surprising, because in the International market, one would expect that when the goods are being imported, the Importer would protect himself by entering into proper correspondence as well as Purchase/Sale Agreement with the Supplier of the goods, in order to safeguard his own interests, in the event of any dispute with the supplier. However, in the present case, though lakhs of rupees worth goods were imported, there was no documents relating to enquiry, offer presentation, acceptance etc. maintained by the Importer.
8. It is observed that the export declaration contains data including Exporter name, Consignee name, Departure date, Transport mode, Vessel/ Aircraft name, Port of discharge, Airway Bill No., Destination country, Destination country code, Marks and Nos., Container No., No. and kind of packages, description of goods, Country of origin, Country code, Quantity, Unit of quantity, FOB Value, Declarations, Signatorys name, Signature at designation, date etc. These details, except a few particulars in a few documents as mentioned in earlier paras, tally with the invoices.
9. Section 139 of Customs Act, 1962 which is reproduced below for better appreciation, reads as follows:-
Section 139. Presumption as to documents in certain cases. - Where any document
(i) is produced by any person or has been seized from the custody or control of any person, in either case under this Act or under any other law, or
(ii) has been received from any place outside India in the course of investigation of any offence alleged to have been committed by any person under this Act, and such document is tendered by the prosecution in evidence against him or against him and any other person who is tried jointly with him, the court shall
(a) presume, unless the contrary is proved, that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person's handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested;
(b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence;
(c) in a case falling under clause (i) also presume, unless the contrary is proved, the truth of the contents of such document].
It is observed that the Export Declarations are obtained from the Customs and Excise Department, Hong Kong under the cover of their letter on letter head and signature, through Commission for India (High Commission/Embassy) in Hong Kong. It is also stated by Hong Kong Customs that they have no objection for the said 25 Export declarations to be used as evidence in judicial proceedings in India. It is also seen that the Export Declarations are signed by Thomas Chan, Merchandiser and Fradu Wang, Accountant on behalf of the Batshita International Limited. It also contains a declaration that he is the exporter and the particulars given in the declaration are accurate and complete. In view the facts and circumstances of this particular case, we find that these Export Declarations are admissible as evidence, and we hold so.
10. The learned Consultant for the appellants has relied upon few case laws. In the case of Collector of Customs vs. East Punjab Traders 1997 (89) ELT (SC), we find that the facts are different from the case in hand. In that case, the Honble Supreme Court noted that the documents were photocopies and did not bear the signatures of either exporter or the Custom officer. In fact, they did not have any signature whatsoever. Therefore, the authenticity of these documents is suspected and it is not possible to presume that the originals are duly signed. The Honble Supreme Court also noted that on one of these copies of the alleged declarations appear seal of Customs at Kobe and the name of vessel is shown to be Raya Fortune but itinerary of that vessel collected at the instance of the Indian Customs show the said vessel never touched Kobe which raises a serious doubt as to how far the documents are authentic. In the second case relied upon by the appellant namely, Commissioner of Customs, Calcutta vs. South India Television (P) Limited 2007 (214) ELT 3 (SC), the contentions were that the Xerox copies did not bear seal and signatures of the Customs officials in Hong Kong; that the authenticity of declaration was doubtful and the declarations were not correct reproduction of the original and that the said documents was not to be used in any legal proceedings. Further, in the said case, there were instances that other importers had imported identical goods at identical rates from the same supplier (namely M/s. Pearl Industrial Company, Hong Kong) during the aforesaid period and the department had accepted those rates. These evidences were not rebutted, in the said case. The third case cited by the learned Consultant, viz., Hanuman Trading Corporation vs. Commissioner of Customs, Calcutta 2002 (148) ELT 431 (Tri.) is on the issue of under valuation, related person and imports against value based advance licenses. In the fourth case cited, namely Truwoods Private Limited vs. Commissioner of Customs, Visakhapatnam 2005 (186) ELT 135 (Tri. Del.), the appellant submitted manufacturers invoices, packing list and other material including evidence relating to contemporaneous exports in support of price declared by them. The Commissioner (Appeals) himself had observed in the order in that case that evidence of contemporaneous imports is equally tilted on both sides.
11. The case laws cited by the appellants are clearly distinguishable from the facts emerging in the present case. A perusal of the show cause notice dated 06.5.1998 reveals that appellants have not produced any evidence to substantiate that the invoice value declared by them are correct by way of showing value of contemporaneous imports etc. On the other hand, we find that the Department has brought in evidences such as the export declarations along with the declarations certifying its accuracy, obtained through official channels under the signature and letter head of Customs department, Hong Kong who has also certified that they have no objection of its use as evidence in judicial proceeding in India. Therefore, we find that the Revenue has brought in sufficient evidences to establish huge under valuation. The appellants have failed to bring any evidence on record to substantiate that the value declared by them is correct, even though the Commissioner of Customs in the earlier order-in-original dated 26.09.2000 in the first round of litigation, had categorically held that the department had discharged the burden of proof by way of giving declaration received from the Hong Kong, Customs. No evidence whatsoever in support of the price declared by the suppliers has been brought on record by the appellants at the time of adjudication, or de-novo adjudication or till now.
12. In the light of the above analysis and the facts and circumstances of the instant case, we find no reason to interfere with the impugned order-in-original. Accordingly, we uphold the same. The three appeals filed by the appellants are rejected.
(Pronounced in the Court on : 23.09.2015)
(P.K. Das) (P.M. Saleem)
Member (Judicial) Member (Technical)
..KL
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