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2013 (11) TMI 1299 - CESTAT AHMEDABADDemand of aggregate customs differential duty - Penalty under Section 114A - Confiscation under Section 111 (d) and (m) - Re determination of value on account of alleged under invoicing - Held that:- unless the goods ‘as presented’ having the essential character of a complete or finished article, the same cannot be assessed or classified as a complete article - Duty has been demanded in respect of 108 consignments which have been imported by 8 different entities at different times and ports, of which 27 consignments relate to indoor units and 50 consignments relate to outdoor units and the balance 31 being parts of window air-conditioners. It is also urged that the total quantities of different models of air-conditioners do not match as per the chart attached to the written submissions filed on 3.9.2013. It is stated that 6007 units of indoor units and 6786 units of outdoor units have been imported and therefore, it cannot be alleged that what are imported are complete air-conditioners and that the same is also the case with different parts of window air-conditioners. As we have held that there is no import of complete air-conditioners, we reject the adoption of value in respect of one model based on import of a complete air-conditioner by ETA General which in any event, is a distributor to the supplier. Commissioner has ordered the classification of the goods imported under sub-Heading 8415 90 00 which relates to parts of air-conditioner. The classification has not been disputed. The Commissioner, at the same time, has described the modus operandi as import of air-conditioners from Thailand, disassembled at Singapore and imported then into India - there is no evidence that complete air-conditioners were imported from Thailand to Singapore and were disassembled at Singapore before shipment to India. KCM has also not admitted this in his statements to which we shall refer in greater detail hereafter. None of the documents either seized or recovered from the computers during search also support this modus operandi. The report from the High Commission of India, Singapore vide letter dated 22.8.2007 is also silent on this aspect. The enquiry with ETA General Pvt. Ltd which apparently revealed that O General does not sell parts is belied by large number of imports of parts into India by independent third parties before and after the period covered by these appeals, which is April 2004 to May, 2007, a fact which has not been denied by the Revenue. There is no explanation from the Department how thousands of consignments of parts of air-conditioners of O General brand are allowed imports, if the enquiry with ETA General is correct. The Commissioner has also held that goods (outdoor units) are liable for confiscation under Section 111(d) on the ground that import of compressors containing R22 Gas requires a license. It is no doubt true that at the time when the goods landed into India, the importers did not have a license. It is only subsequently that the importers applied for and obtained licenses which were issued post facto, to cover goods which had already been shipped/landed/cleared. We therefore, set aside the confiscation under Section 111(d) subject to verification of the fact that the import licenses cover the total quantity of consignments of outdoor units with compressors containing R22 Gas. though statements of Savaram and Vela Ram were recorded on 23.5.2007, KCM was never confronted with them. KCM does not corroborate the statements of Savaram and Vela Ram. None of the documents also support corroborate the statements of Savaram and Vela Ram - apart from being unreliable the statements do not disclose any offence for penalty under Section 112 since these two persons have no relation to import of goods. There is absolutely no evidence against Joit Kumar Chaudhary. Penalty under Section 112 cannot be imposed for not responding to summons. We therefore set aside the penalties of these three Appellants. Statements must however be read with the evidence in cross examination of Mehul Shah and Jitendra Manek. However, in view of our finding that there is no warrant or justification in rejecting the transaction or the declared value and the case of import of complete air-conditioners being based on assumptions, this issue would not result in either the imports of parts being prohibited or restricted or the declared value incorrect. As a matter of law, parts and complete air-conditioners are freely permissible for import under the Foreign Trade Policy - Following decision of Collector of Customs vs. Sony International [2008 (9) TMI 19 - SUPREME COURT] and Sunil Gulati vs Commissioner [2002 (8) TMI 787 - CEGAT, NEW DELHI] - Decided in favour of assessees.
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