1988 (6) TMI 211 - AT - Customs

Issues Involved:
1. Jurisdiction of the Collector to revise the out of charge order.
2. Onus of proving under-valuation.
3. Validity of import documents and firms.
4. Genuineness of the declared value of goods.
5. Imposition of fine and penalty.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Collector to Revise the Out of Charge Order:
The appellants argued that the show cause notice issued under Section 124 for confiscation and penalty was out of jurisdiction since the customs officer had already assessed and released the goods under Section 47 of the Customs Act, 1962. They contended that the only recourse was to file an appeal under Section 129 D(2). The judgment clarified that the customs officer's assessment and release were in compliance with the interim order of the Calcutta High Court and not an independent adjudication. It cited precedents, including M/s. Jain Shudh Vanaspati (1982 ELT 43 Delhi) and AIR 1975 Cal. 368, which allow revision under Section 124 in cases of fraud or suppression. The fraud was discovered post-release, justifying the show cause notice under Section 124.

2. Onus of Proving Under-valuation:
The appellants claimed that the department failed to provide independent evidence of the ordinary international price of the goods. The judgment noted that the appellants' evidence of earlier imports at lower prices was outdated and irrelevant to the time of their importation. The onus shifted to the appellants to disprove the genuine import invoices showing a higher price of U.S. $3,400 per M.T., which they failed to do. The appellants did not produce current international price lists from the foreign supplier, further weakening their case.

3. Validity of Import Documents and Firms:
The Collector's investigation revealed that the three appellant firms were non-existent or rubber-stamp entities, with M/s. Metal & Alloys Industries being the actual operator behind the imports. The recovery of documents, including forged invoices and purchase orders, supported this conclusion. The appellants' failure to present the proprietors during the investigation and hearing further raised doubts about the firms' genuineness. The judgment upheld the Collector's finding that the imports were made in the names of non-existent firms using manipulated documents.

4. Genuineness of the Declared Value of Goods:
The appellants declared the value of the goods at U.S. $1,050 per M.T., while the genuine invoices showed a price of U.S. $3,400 per M.T. The judgment highlighted discrepancies in the invoices, such as different typewriters, inks, and signatures, indicating forgery. The appellants' explanation of a billing mistake by the foreign supplier was unconvincing, especially since the supplier was a reputed international company. The evidence, including marine insurance policies and certificates of origin, corroborated the higher price, proving under-valuation by the appellants.

5. Imposition of Fine and Penalty:
The appellants argued that the Collector's mind was conditioned by two violations (Section 111(d) and 111(m)) and that the fine and penalty were unjustified. The judgment dismissed this, stating that the citation of Section 111(d) was a typographical error and the fines were moderate, only a fraction of the customs duty sought to be evaded. The fine did not exceed the declared value plus customs duty, and the blatant fraud warranted the imposition of fine and penalty. The judgment concluded that the appellants' fraudulent actions justified the Collector's orders.

Conclusion:
The judgment dismissed the appeals, affirming the Collector's findings of fraud, under-valuation, and the use of non-existent firms. The Collector's jurisdiction to issue the show cause notice was upheld, and the imposition of fine and penalty was deemed appropriate given the circumstances.

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