TMI Blog2011 (11) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... named as Siddharth Area Ltd., Flat No. 13L, 25, Gopala Towers, Rejendra Place, New Delhi (hereinafter referred to as SPL) with Shri Dinesh Aggarwal as its Director, M/s. Mono Acrylic Manufacturing Co. Ltd., Khasra No. 53, Gurudwara Road, Siraspur, Delhi (hereinafter referred to as MAML) with Shri Manish Agrawal as its Director, M/s. Global Enterprises, A-72, Swarup Nagar, Delhi (hereinafter referred to as GE) with Shri Sudhir Kumar Gupta as its proprietor and M/s. Gaitri Exports, 89-90, Industrial Area, Phase-I, Panchkula, Haryana (hereinafter referred to as GAE) with Mrs. Gaitri Devi as its Proprietor, and whose husband Shri Ashok Singla was running this firm, were, during the period of dispute i.e. from February, 1999 to October, 2001, engaged in import of Polycarbonate sheets. The polycarbonate sheets imported were opal white colour meant for signage/advertising industry. 1.1.1 During the period from January, 2001 to October, 2001, SPL imported 52 consignments of opal white polycarbonate sheets from Korea at declared price of US $ 1055 per M.T. out of which while 18 consignments had been purchased directly from the manufacturers in Korea (13 from M/s. Sehwa Polytech Co. Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he declared value and examination of the goods. 1.2 The officers of Directorate General of Revenue Intelligence, New Delhi, on receiving an intelligence that SPL, MAML, GE GAE are evading huge amount of Customs duty by misdeclaring the description of polycarbonate sheets being imported by them as having been made out of recycled polycarbonate waste and thereby under declaring the value, searched their office as well as godown premises and also the premises of M/s. Shubh Plastics, Goregaon (West), Mumbai, the consignment agent for SPL, MAML GE and of - (i) M/s. Hanuman Graphics Pvt. Ltd., Goregaon, Mumbai, and (ii) M/s. Laxmi Sales Corporation, Goregaon (West), Mumbai, the dealers, who were purchasing the polycarbonate sheets from M/s. GAE. Certain stock of imported polycarbonate sheets found in the godown of SPL, MAML, GE and GAE and also in the godown of the consignment agents/dealers - M/s. Shubh Plastics, M/s. Laxmi Sales Corporation and M/s. Hanuman Graphics was placed under seizure. From the office premises of SPL, a bunch of the certificates issued by M/s. Sehwa Polytech Co. Ltd., Korea certifying that the polycarbonate sheets supplied by them have been manufactured ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marketed by SPL, MAML, GE and GAE, are made out of virgin polymer material and the sheets of this type and quality cannot be made out of this recycled material, that the price of virgin raw material varies from 2 U.S. $ to 3.5 U.S. $ per kg. and the polymer sheets of virgin material are available in the international market at prices ranging from 4 U.S. $ to 6 U.S. $ per kg., that it is not possible to make such sheets out of 100% scrap/waste, that the approximate cost of converting polycarbonate waste/scrap into polycarbonate sheets is about U.S. $ 0.50 to U.S. $ 1 per kg., that price of polycarbonate scrap in international market, as available on internet, is about 0.58 U.S. $ per pound which would be about 1.2 U.S. $ per kg. and, that thus, even if polycarbonate sheets are made 100% out of recycled waste their cost would be around 1.75 U.S. $ to 2.2 U.S. $ per kg. Inquiry was made with Shri Vinay Kumar, Director - M/s. Vergola India Ltd., Mumbai, an importer of polycarbonate sheets, who stated that they are importing polycarbonate sheets made out of virgin material from Israel and that during period from April, 2000 to December, 2000 they have imported polycarbonate sheets from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consignments imported by SPL, MAML/GE and GAE were sent to IIT, Delhi and CIPET, Chennai. CIPET, Chennai under letter dated 1-8-2002 and IIT, Delhi letter dated 30-7-2002 reported that the samples drawn from the consignments (non-certified) and the samples sent to them as certified samples appeared to be similar and appeared to have been made from similar material. 1.2.3 Consulate (Eco.), Consulate General of India, Hong Kong on a reference from the investigating officers sent two reports dated 5-7-2002 and 7-8-2002 in this matter. In the report dated 5-7-2002, it was reported that information regarding prices of polycarbonate sheets for export from Korea to India during January, 2001 to December, 2001 has been obtained from Korean Customs and that average export price during this period was U.S. $ 3577 per MT. This report also gave the total export quantity of the Polycarbonate Sheets from Korea to India during January and December, 2001 period as 965.199 MT and its total value as 35,52,685 U.S. $ and on this basis, the average export price per MT came to U.S. $ 3577. The second report dated 7-8-2002 gave the same information for the years 1999, 2000, 2001 and 2002, as down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A of Customs Act, 1962; and (d) imposition of penalty under Section 112(b) of the Customs Act, 1962 on Shri Dinesh Agarwal, Director SPL; Shri Manish Agarwal, Director of MAML; Shri Ashok Singla, husband of the proprietor of GAE; Shri Sudhir Gupta, Proprietor of GE, Shri Anand Bhandari, Partner of M/s. Shubh Plastics, Shri Ram Kishore Mandhana, Partner of M/s. Laxmi Sales Corporation and Shri Bharat Kumar M. Rathi and Shri Abhishek Lohia, Director and Manager respectively of M/s. Hanuman Graphics, Mumbai under Section 112(b) of Customs Act, 1962. 1.2.5 The Commissioner of Customs (Adjudication), New Delhi vide Order-in-Original No. 3/GS/CC/DRI/NCH/2006, dated 31-7-2006 in the case against M/s. SPL - (a) ordered enhancement of assessable value from U.S. $ 1055 per M.T. to U.S. $ 3580 per M.T. and confirmed duty demand of ₹ 8,92,88,587/- against SPL under proviso to Section 28(1) of Customs Act, 1962 along with interest on this duty at the applicable rate under Section 28AB of Customs Act, 1962; (b) imposed personal penalty of ₹ 8,92,88,587/- on SPL under Section 114A of Customs Act, 1962; (c) confiscated the seized goods with option to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Laxmi Sales Corporation. 1.2.8 Against the above orders of the Commissioner, SPL and its Director Shri Dinesh Agarwal, MAML and its Director Shri Manish Agarwal, Global Enterprises along with its proprietor, Shri Sudhir Kumar Gupta - and GAE along with Shri Ashok Singla, the person in-charge of this company, filed appeals to this Tribunal. The appeals of SPL and its Director Shri Dinesh Agarwal were allowed by the Tribunal vide Order-in-Appeal Nos. 334-335/2007-Cus., dated 19-6-2007 on the grounds that - (a) since SPL in all the bills of entry had declared the goods as Polycarbonate sheets and not as polycarbonate sheets made out of recycled material and since the SPL s correspondence with M/s. Sehwa Polytech Ltd. in June, 2000 (which is reproduced in the Tribunal s order) indicated that the sheets being supplied by M/s. Sehwa Polytech Ltd. were, indeed, made out of recycled waste/scrap, the finding of the adjudicating authority that the consignments were misdeclared as regard their description is not sustainable; and (b) the allegation of the misdeclaration of value is based on the allegation of the misdeclaration of description and when the charge of misd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and the Hon ble Supreme Court vide its order dated 16-9-2008 set aside the Tribunal s orders and remanded the matter to the Tribunal for de novo decision with regard to the question of misdeclaration as well as the question of undervaluation. In this regard, observations of Hon ble Supreme Court are reproduced below :- At this stage we may state that in all these cases the point which arises for determination is that whether P.C. sheets imported by the noticees were made out of re-cycled or re-generated polycarbonate? This point has not been discussed or analysed in detail by the Tribunal which is the final fact finding authority. After noticing the arguments advanced on both sides, the Tribunal merely states that there is no evidence either on the point of misdescription or value and it straightaway comes to the conclusion that the findings given by the Commissioner are unsustainable. In our view, the impugned judgment of the Tribunal is perfunctory. It does not analyse the evidence on record. Whether the Adjudicating Authority was right or wrong is not being answered by us? Our objection is directed only to the way in which the Tribunal has disposed of the appeals filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s presumption that the officers had finalized the B/E after examining all the necessary records, thoroughly examining the goods and getting the same tested, if necessary. (3) The test report dated 30-7-2002 of IIT, New Delhi and dated 1-8-2002 of CIPET, Chennai reporting that the samples drawn from the imported consignments and the standard sample, provided by the Department, on tests, appear to have been made of similar material, are of no evidence value as - (a) the so called standard sample along with manufacturer s certificate certifying the same to be made out of virgin polycarbonate resin, have been obtained through Indian Consulate in Dubai from one M/s. Afro Textiles, behind the back of the appellants and without disclosing as to how the material, from which the sample had been given to the Indian Consulate, had been acquired by them; (b) when the appellants checked up with M/s. Sehwa Polytech and M/s. Bayer Sewon, both the manufacturers have denied having any dealer like M/s. Afro Textiles in Dubai, have denied having issued any certificate and have denied having supplied any polycarbonate sheets to any dealer in Dubai and in this regard they have is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India of all the goods falling under SH 3920 61 00 during the years 2000 and 2001. SH 3920 61 00, in addition to polycarbonate sheets, covers polycarbonate film, foils, strips, plates, etc. Moreover polycarbonate sheets are of a large number of varieties - transparent, optical quality, bullet proof, double walled, etc., with very wide variation in price. Moreover the information about total quantity and value of the goods of SH 3920 61 00 exported from South Korea to India during 2000 and 2001 is unreliable as it is not known as to how this information has been compiled. The cross-examination of Shri T. Joyaraman, Consul (Eco.) who had submitted these reports was not allowed. (9) Cost of production of opal white polycarbonate sheets by M/s. GE plastics in India is not comparable with the cost of production of the imported sheets. Moreover as per explanatory notes to Rule 7A of the Customs Valuation Rules, it is the cost of production of the goods being valued which is to be adopted, not any other cost. (10) The bills of entry pertaining to contemporaneous imports of polycarbonate sheets are of import of other varieties multiwall and polygal (clear) sheets and that too fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.T. and in case of GAE the same was loaded from the declared price of U.S. $ 600 per M.T. to U.S. $ 1040 per M.T., the import price of polycarbonate resin during the period of dispute was in the range of U.S. $ 2093 - 2114 per M.T. Even in domestic market the sale price of polycarbonate resin during 1999 and 2000 was ₹ 147 - ₹ 192 per kg. Therefore, the declared CIF price of U.S. $ 1040 - 1055 per M.T. for the polycarbonate sheets does not represent the true transaction value. (3) The appellants throughout the investigation, did not cooperate with the investigating officers. When they failed to bring the sample of raw material from the manufacturers, the Department, through Indian Consulate in Dubai located a dealer - M/s. Afro Textiles and the samples of opal white polycarbonate sheets of Hitech and Polyglass brand along with the manufacturer s certificate certifying the same to be made out of virgin polymers were obtained. In the tests conducted by CIPET, Chennai and IIT, Delhi, various properties of the samples procured from M/s. Afro Textiles, Dubai were compared with those properties of the samples drawn from the consignments imported by the appellants and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re made out of recycled waste, had been fabricated by SPL and therefore no reliance can be placed on the same. Similarly the manufacturer s certificates recovered from SPL certifying that the polycarbonate sheets supplied have been made out of recycled waste, are not reliable. (8) In view of the above evidence of undervaluation and misdeclaration of description, the adjudicating authority invoking Rule 10A has rightly rejected the declared price of U.S. $ 1040 - 1055 per M.T. and has rightly enhanced the same to U.S. $ 3580 per M.T. and confirmed the duty demands. In this regard, reliance is placed on Tribunal s judgments in cases of - (i) CC, Bangalore v. H.M. Leisure reported in 2006 (199) E.L.T. 464 (Tri.-Bang.) (ii) Mytri Enterprises v. CC, Mumbai reported in 2004 (174) E.L.T. 389 (Tri.-Mum.) (9) Since the average price of polycarbonate sheets for export from Korea to India during 2000 and 2001, as reported by the Consulate General of India, Hong Kong is in the same range as the international price of polycarbonate sheets in different parts of the world during that period and since the quantity of the goods of SH 3920 61 00 exported from Korea to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the evidence produced by the Department in support of the allegation of undervaluation is sufficient to prove this charge, which are to be decided de novo as per the direction of Hon ble Supreme Court? 3.1 The issue of misdeclaration of description is linked with the issue of undervaluation. In this case, as mentioned above, all the appellants have claimed that the opal white polycarbonate sheets imported by them are made out of recycled polycarbonate waste and MAML, GE and GAE even declared to goods imported by them as polycarbonate sheets made out of recycled waste, in the bills of entry filed by them. In these circumstances, if the allegation of misdeclaration of description of the goods is found to be correct misdeclaration of value would be implied. 4. Were the imported polycarbonate sheets made out of recycled, regenerated polycarbonate. 4.1 Polycarbonate is a polymer which is chemically synthesized from Biphenyl A. The polymer chips can be extruded into sheets, tubes, etc. There are a large number of varieties of polycarbonate sheets for different applications with widely varying prices. The sheets made out of virgin polymer are transparent. The waste arisen in manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 30-7-2002 of IIT, Delhi and dated 1-8-2002 of CIPET, Chennai reporting that the standard samples i.e. the samples of Hitech brand and polyglass brand opal white polycarbonate sheets of Korean origin obtained by the Department from M/s. Afro Textiles, Dubai through Indian Consulate in Dubai along with the certificates from the respective manufacturers certifying the samples to be polycarbonate sheet made out of virgin polymer, and the samples from the seized goods imported by the appellants appear to have been made out of same raw material. 4.3 The appellant s plea in respect of the above evidence is as under - (i) The authenticity of the so called standard samples of Hitech brand and polyglass brand polycarbonate sheets of Korean origin, obtained from M/s. Afro Textiles, Dubai is doubtful as - (a) there is no letter of M/s. Afro Textiles, Dubai, introducing themselves as dealer of the products of M/s. Sehwa Polytech Ltd., and M/s. Bayer Sewon, Korea; and it is not known as to from where the samples along with the certificates have been obtained; and (b) M/s. Sehwa Polytech Ltd., Korea vide letter dated 3-7-2003 and M/s. Bayer Sewon Ltd., Korea vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence of these certificates has been denied by the respective manufacturers. The letters of M/s. Sehwa Polytech Ltd. and M/s. Bayer Sewon Ltd. denying to have issued the quality certificates and denying to have supplied opal white polycarbonate sheets to anybody in Dubai could have been discarded as false if some evidence showing import of polycarbonate sheets by M/s. Afro Textiles, UAE, or some other importer in UAE from whom M/s. Afro Textiles procured those samples, had been produced. But no such evidence about the source of these samples and the certificates has been produced. We also note that in the quality certificate in respect of Hitech brand of sheets, forwarded by the Indian Consulate in Dubai, the Korean manufacturer s name - M/s. Sehwa Polytech is misspelt as M/s. Sewha Polytech . Shri Ponnu Swamy/Consul (Eco) in Indian Consulate in Dubai, the person who could throw light on the above points, has not been allowed to be cross-examined. It has been pleaded on behalf of the Department that the letters of M/s. Sehwa Polytech Ltd. and M/s. Bayer Sewon Ltd. denying to have issued the quality certificates and denying to have supplied any polycarbonate sheets to M/s. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... literature on this subject and it may not be correct to generalize the same. The quality of polycarbonate sheets produced out of recycled polycarbonate waste/scrap would depend upon the quality of waste/scrap, the technology used and the use of virgin polymer along with the polymer recycled from waste/scrap, about which nothing is known in this case. 4.5.1 On going through the case records we find that Consul (Eco.), CGI, Hong Kong vide his report dated 9-4-2002 to DGRI [page 165 of the Appeal paper book (Vol. III) of the Appeal No. C/640-641/06 of GAE] has reported that Bayer does manufacture polycarbonates from recycling and these are Base Recyclates. This letter is reproduced below Consulate General of India Hong Kong No. HON/ECO/4/SK/01-03 Dated the 9th April, 2002 T Joyaramen Consul (Economic) My dear Balesh, Subject : Import of Polycarbonate sheets from Korea - reg. Please refer to your letter regarding information on import of Polycarbonate sheets from Korea. As regards the information sought regarding manufacture of Polycarbonate sheets out of regenerated/recycled scrap, it is seen that the Polycarbonate supplied is partly from Bayer Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature, must prevail over the evidence in form of mere individual opinion. 4.6 In view of the above discussion, we are of the view that the Department s allegation that the imported polycarbonate, sheets are made out of recycled polycarbonate is not sustainable. 5. Allegation of misdeclaration of value. 5.1 Before coming to the question of misdeclaration of value, it would be worthwhile discussing, in brief, the scheme of valuation of imported goods in Customs Act, 1962. 5.2 As per the provisions of Section 14(1) of the Customs Act, 1962 where the Customs duty on any goods is ad valorem, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or, offered for sale, for delivery at the time and place of importation or exportation, in course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale. Sub-section (1A) of Section 14 provides that subject to the provision of sub-section (1), the value of the imported goods shall be determined in accordance with the Rules made by the Government in this behalf. The Rules f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the interpretative notes to CVR, 1988, which are part of these Rules and are applicable for interpretation of these Rules, while using best judgment method under Rule 8, Rules 4, 5, 6, 7 7A can be flexibly applied. However sub-rule (2) of Rule 8 enumerates some prohibited methods, some of which are, the value based on - (a) selling price in India of the goods produced in India; (b) price of the goods in domestic market of the country of export or the price of the goods for export to a country other than India; and (c) cost of production, other than the computed values determined for identical or similar goods under Rule 7A. 5.1.1 Thus the situation in which the declared transaction value can be rejected are - (a) non satisfaction of conditions for acceptance of transaction value, as specified in sub-rule (2) of Rule 4 and (b) existence of reasonable doubt by the proper officer under Rule 10A, for which as held by the Tribunal in case of CCE, Bangalore v. H.M. Leisure reported in 2006 (199) E.L.T. 464 (Tri.-Bang.), there must be some basis. Some of the situations warranting application of Rule 10A would be misdeclaration of description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence of value of goods other than those under assessment to be the basis of the assessable value. Thus, Rule 5 allows for the transaction value to be determined on the basis of identical goods imported into India at the same time; Rule 6 allows for the transaction value to be determined on the value of similar goods imported into India at the same time as the subject goods. Where there are no contemporaneous imports into India, the value is to be determined under Rule 7 by a process of deduction in the manner provided therein. If this is not possible the value is to be computed under Rule 7A. When value of the imported goods cannot be determined under any of these provisions, the value is required to be determined under Rule 8 using reasonable means consistent with the principles and general provisions of these rules and sub-section (1) of Section 14 of the Customs Act, 1962 and on the basis of data available in India. If the phrase the transaction value used in Rule 4 were not limited to the particular transaction, then the other Rules which refer to other transactions and data would become redundant. 14. It is only when the transaction value under Rule 4 is rejected, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the polycarbonate sheets imported by the appellants and therefore their actual price would be around U.S. $ 3577 per M.T. as against declared price of U.S. $ 1040 - 1055 per M.T. (iii) Statements of Shri Rakesh Jain and Mayank Jain of M/s. GE Plastics, Shri Vinay K. Patel of M/s. M.H. Polymer, mentioning that - (a) during 2000 2001, the price of polycarbonate sheets for signage/advertisement use was U.S. $ 3.2 to U.S. $ 4.5 per kg., depending upon the quality, (b) in 2002, M/s. GE Polymerland Korea sold polycarbonate sheets to M/s. GE Polymer shapes Singapore at U.S. $ 7.6 per kg. vide invoice No. 38245, dated 8-4-2002; and (c) M/s. SP Pacific Ltd., Tokyo vide letter dated 25-1-2002 had quoted the price of polycarbonate sheets as U.S. $ 6.12 per kg. to M/s. Structural Products Leader, Tokyo. (iv) Invoices produced by Shri Mayank Jain of M/s. GE Plastics showing import price of polycarbonate resin as U.S. $ 1.8 to 2.5 per kg. and its price in Korea as U.S. $ 1.6 to 3.2 per kg. (v) B/E No. 641213, dated 4-4-2000, 643849, dated 29-8-2000, 664099, dated 26-12-2000, 676251, dated 9-5-2001 and 228454, dated 19-12-2001, produced by M/s. Vergola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , MAML, GE GAE and M/s. Trade Exim, it cannot be assumed that the entire quantity of the goods of SH 3920 61 00 exported from Korea during 2000 2001 were the very same goods i.e. opal white polycarbonate sheets imported by the appellants. Moreover it is not known how accurate are the figure of export to India of the goods of SH 3920 61 00, as downloaded from the website of Korea International Trade Association. 5.3.2.1 The learned Jt. CDR s contention that the facts that - (a) the average export price referred to in report dated 5-7-2002 of the Consul (Eco.), CGI, Hong Kong is comparable with the price of polycarbonate sheets in different parts of the world and (b) the total quantity of exports of the goods of SH 3920 61 00 from Korea to India during the years 2000 and 2001 as reported in Consul (Eco.) s report dated 7-8-2002 almost match the quantity of polycarbonate sheets imported by SPL, MAML, GE, GAE and M/s. EXIM Trade during these years, are, in view of Hon ble Supreme Court s judgment in case of CC, Chennai v. D. Bhoormal (supra) sufficient to raise a presumption in support of the Department s allegation of undervaluation against the appellants, is not correct, as - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere being exported from Korea to buyers in countries other than India or the price of polycarbonate sheets in South East Asian region or the prevailing price of polycarbonate chips are of no relevance. 5.3.4 As regards the bills of entry mentioned in Para 5.2(v) above, all the bills of entry are in respect of import of polycarbonate sheets, totally different from the signage/advertising quality sheets - the polycarbonate sheets covered by these Bills of entry are embossed, bullet proof, compact embossed, multiwall, polygala, etc. Thus the goods covered by the bills of entry are not comparable with the goods imported by the appellants. As against this, we find that the appellants have produced copies of bills of entry in respect of import of identical goods from Korea and Taiwan at around the same price during the same period by other importers where the declared price was accepted and no action has been taken (pages 720-727, Vol. III of the compilation of Appeal No. C/625 of 2006 filed by SPL. Pages 565-586, Vol. II of the compilation of Appeal No. C/645 of 2006 filed by MAML.) 5.4 Thus from the above discussion it is clear that none of the evidences mentioned in Para 5.2 are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of undervaluation and also to determine the issue whether P.C. Sheets imported by the noticee were made out of recycled or regenerated polycarbonates, both sides were extensively heard on various occasions. 9. When there was intelligence gathered to the effect that the appellants were importing polycarbonate sheets of prime grade made out of virgin polycarbonate resin in the garb of regenerated/recycled polycarbonate sheets, resulting in misdeclaration of description of such imported goods so as to cause undervaluation thereof and also to evade payment of import duty, investigation was caused making search to the premises of the appellants on 5/6-10-2001. 10. Followed by search, both oral and documentary evidence was gathered by Revenue and also the samples drawn from the seized material were tested in Government laboratories following due process of law. Strangely sample of seized goods was not provided to the appellant by DRI, even though appellants had approached that authority repeatedly. 11. Statements were recorded from following persons in the course of investigation in respect of Sidhartha Polymer : Statement date Name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and the appellants also heavily relied on report of CIPET, Bhopal and Amritsar. 15. The polycarbonate sheets imported by the appellants were Korean origin. While Siddhartha Polymer had imported Hi-Tech brand manufactured by M/s. Sehwa Poly Tech of Korea, M/s. Mono Acrylic Company and Gayatri Exporters had imported Poly Glass brand manufactured by M/s. Bayer Sewah of Korea, Sri Dinesh Agrawal, Director of M/s. Siddhartha Polymers Ltd. in his statement dated 8-10-2001 stated that they were buying the goods from traders of Singapore and never had approached the manufacturers. Also it was stated by him that the goods imported by them was opal white. (Para 4 of show cause notice). Even oral evidence of the traders of appellants suggested the goods supplied by appellants were opal white and used by advertising and signage industry. 16. The appellants having claimed that the imported polycarbonate sheets were made out of regenerate/recycled polycarbonate resins, to ascertain whether P.C. Sheets imported by the noticees were made out of recycled or regenerated polycarbonates, Revenue referred 2 sealed samples drawn from seized goods, to CRCL, New Delhi on 18-10-2001 for testi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by IIT reads as under : These samples were tested for comparison of various properties and the results clearly indicated that the seized samples are similar and comparable in nature with the standard samples, viz. the polycarbonate sheets made of virgin polymer. The values obtained from the testing indicate that the seized sample sheets have been extruded using similar or comparable nature of raw material as used in the standard sheet . The closeness of the value of the seized sample sheets to the values of the standard sheets rules out the possibility of the seized sample sheets being extruded from scrap material . (Emphasis supplied) Aforesaid position remained uncontroverted in cross-examination of IIT Professor Sri A.K. Gupta on 31-3-2006 (Ref : Page 663 of Vol. 3 of Paper Book). 20. Similarly, another set of sample of both categories i.e. sample of seized goods and certified sample of Hi-Tech branch and Polyglass brand received from Consulate General of India in Dubai was sent to CIPET, Chennai on 17-5-2002. That institute also has same version in respect of all the appellants as that of IIT, Delhi and informed to Revenue by thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategory of goods for testing in different Govt. Laboratories. Samples were accordingly given to the appellant by DRI on 28-6-2005 and the appellant sent such sample to CIPET, Bhopal on 22-7-2005 and CIPET, Amritsar on 23-7-2005 for testing. The test report of both laboratories showed that the sample was manufactured out of recycled raw-materials (Ref : Pages 941-944 of Vol. 3 of Paper Book). However chemical examiners of both the laboratories were not summoned for examination by Revenue when test report of IIT, Delhi and CIPET, Chennai suggested otherwise. In view of correspondences of the appellant aforesaid it transpires that the appellant was deprived of samples from date of seizure of goods i.e. 6-10-2001 and date of obtaining of sample from Dubai i.e. 12-5-2002 till 28-6-2005. It may be stated that no litigant should be dealt with to the detriment of justice. 24. Relying on Para 68 of order of adjudication, in the course of hearing, Revenue disputed authenticity and identity of samples sent to CIPET, Bhopal and Amritsar by the appellant. Most particularly dispute was raised as to manner of sending of samples by the appellant to CIPET, Amritsar. Accordingly Revenue was direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheets in signage industry are used as substrate or base materials and on these sheets either the advertisement is pasted or printed; that thereafter these sheets are backlit from behind with general light fixtures; that the passage of light or illumination from behind allows the printed message to be viewed prominently and effectively. He explained that PC sheets can be manufactured out of recycled scrap. In Para 13.19 of show cause notice Shri Mayank Jain explained that manufacturing process of PC sheets out of virgin material and scrap is same. But manufacture from scrap or recycled material is tedious due to poor quality of resin. 26. In adjudication, when oral evidence of certain persons were used against the appellant M/s. Sidhartha Polymers, cross-examination of such persons was called for by the appellant by their letter dated 27-9-2005. But the appellant was not provided such opportunity in respect of all the persons except such examination permitted in respect of 3 or 4 persons. Cross-examination of Shri Vinayak K. Patel of M.H. Polymers was made on 16-3-2006 (at page 658 of Volume 3 of Paper Book). In answer to question No. 16, he stated that Polycarbonate sheets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dubai sample. When the sample collected by Revenue from Dubai were of Hi-tech brand and polyglass brand and such branded goods were imported and dealt with by appellants, comparison of sample derived from seized goods with branded certified samples procured from Dubai was quite reasonable as per version of IIT Professor in cross-examination and that remained uncontroverted. Objection of appellant that the sample procured from Dubai was irrelevant is unsustainable for the reason that the samples procured were Hi-tech brand and polyglass brand and were same as that was dealt with by appellants. Such brands were of Korean manufacture. That remained undisputed. When equal brands were compared with equals only, there cannot be any grievance of disparity or incomparability. It was also oral evidence of Sri Dinesh Agarwal, Director of Sidharth Polymer and traders that the goods dealt with by them in the trade as supplied by the appellants were opal white and used for advertising and signage industry. This leaves no doubt at all on the certified samples . Nothing was whispered by them about dealing of regenerated or recycled polycarbonate sheets when preliminary statements were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e out of recycled or regenerated polycarbonates. Revenue is also at liberty to summon and examine chemical examiners of CIPET, Bhopal and CIPET, Amritsar to ascertain manner of conduct of test by those laboratories since the appellant heavily relies on their reports while IIT, Delhi and CIPET, Chennai differ to support the stand of the appellants. Once this issue is decided by the learned adjudicating authority on the weight of evidence on record following due process of justice and granting fair opportunity of hearing to the appellants, there may not be grievance by the appellants and the authority can safely decide the valuation issue in accordance with law, taking advantage of detailed discussion on valuation issue dealt with by my learned brother Sri Rakesh Kumar. In view of the remand proposed as above, it has become redundant to deal with various citations made by both sides. Sd/- (D.N. Panda) Member (Judicial) DIFFERENCE OF OPINION Since there is a difference of opinion between the two members, the registry is required to place the records of these appeals before the Hon ble President for appropriate orders u/s 129C(5) of Customs Act, 1962 to resolve follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ytech Ltd. in 2000, which correspondence had been seized by the department from their office premises during the investigation, wherein they had complained that sheets imported are not totally free from defects like black specks etc. 37. As regards the test reports, I find that the IIT, Delhi and CIPET, Chennai reports only give the value of certain physical properties of the alleged certified samples obtained from M/s. Afro Textiles, Dubai and the samples drawn from the seized goods. The reports are reproduced herein below :- 38. The first doubt cast upon such reports is due to the fact that M/s. Sehwa Polytech Ltd., Korea and M/s. Bayer Sewon Ltd., Korea denied having issued such certificates, denied having any dealer or distributor in Dubai and denied having shipped opal white polycarbonate sheets to Dubai. There is no letter of M/s. Afro Textiles, Dubai introducing themselves as dealer/distributor of either M/s. Sehwa Polytech Ltd., Korea or M/s. Bayer Sewon Ltd., Korea and there is no explanation forthcoming as to where the samples along with manufacturer s certificates, had been obtained from. No evidence has been produced regarding the source of these s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bonate sheets made out of virgin polymer, as polycarbonate sheets manufactured out of scrap or recycled material were generally dark or black in colour. On the other hand, I note after going through the statement of Shri Dinesh Agrawal, Director of Siddharth Polymers Ltd. and Shri Anand Bhandari, his consignment agent, that they have nowhere stated that the goods were translucent. The submission that polycarbonate sheets manufactured out of scrap or recycled material are generally dark and find use in opaque applications is based only upon the statement of M/s. M.H. Polymers who, as already noted earlier, is a domestic manufacturer and a competitor of the appellants. The further contention that percentage of the recycled material generated is only 5 to 10% of the total raw material and therefore the volume of polycarbonate sheets imported cannot be justified as being manufactured out of scrap or remains of polycarbonate sheets is again based upon the statement of local manufacturers and cannot be accepted as conclusive. 42. No enquiries have been made by the department from the actual user of these sheets in India. On the other hand, samples were shown to the adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the goods in question are not made out of virgin polymer but out of reprocessed or regenerated resin. Further, the Bills of Entry are for import of clear sheets, compact embossed polycarbonate sheets, multiwalled polycarbonate sheets and poly gala sheet. It cannot be disputed that polycarbonate sheets have different applications - clear sheets are used for optical purposes; some sheets have bullet proof applications. Polycarbonate sheets are of several varieties and Customs Tariff Heading 3920 61 covers all types of polycarbonate sheets. In this view of the matter, no reliance can be placed on the Bills of Entry relied upon by the Revenue. On the other hand, the appellants have submitted evidence of contemporaneous import at similar price by M/s. Subam Traders and no show cause notice had been issued to them alleging undervaluation. In contrast to the order recorded by learned Member (Technical), on both issues, namely misdeclaration of description and misdeclaration of value, learned Member (Judicial) has given his finding only on the question of misdeclaration of goods. He has come to the conclusion, by necessary implication, that the evidence on record is not enough to give a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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