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TMI Blog1989 (10) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... 228/- Sarvodaya Rosin Works. 2508/163 (N.V. Annapurna) 54 MT Rs. 2,71,776/- The above captioned Bill of Entries filed by Shrceram Clearing and Forwarding Agency, Bombay-38 for warehousing covering the import of 90 MTs and 54 MT Gum rosin declared to be of 'FAQ' grade of Indonesian origin on the, above captioned appeals Nos. 1 to 3. The goods were supplied by M/s. Kapsco Pvt. Ltd. at the price of US $ 390 MT CIF, Bombay under cover thereof invoice Nos. KPL/B/062/86 dated 6th October 1986, No. KPL/E/063 dated 6th October, 1986 and KPL/E/079/86 dated 18th October 1986. The goods covered by the first two invoices both dated 6th October, 1986 and have been shipped on 'DP' and 'DA' basis whereas the third Bill of Entry in the case of Sarvodaya Rosin Works was against L/C No. BF-01-29/86-12 dated 5th August 1986. The appellants had claimed the clearance under OGL, appendix 6, Item 1 of AM 85-88 Import Policy. The declaration under Section 46 of the Customs Act, 1962 were duly filed. In a declaration the appellant had maintained that "contents of relative invoices are true and correct, they have not received or do not know any other documents or information showin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector of M/s. Kapsco Pvt. Ltd., Singapore is his son-in-law and are importers and exporters of various items like sports goods, Jute, Gum Rosin and he was getting 1% commission of CIF value from M/s. Kapsco Pvt. Ltd. against all his indents booked since January 1986. And the CIF price includes commission and 'FAQ' grade is mixed and unsorted 'WG' and inferior grade. In his statement dated 8th April 1987 Shri Saigal further slated that he had learnt from his principles M/s. Kapsco Pvt. Ltd., Singapore, suppliers of the above consignments, 'WG' grade was US $ 450 to 460 per M.T. and grade price 435 to 440 C & F per MT although these are invoiced as gum rosin 'FAQ' grade of US $ 390 per MT. On being questioned that the real price was 460 per MT as against US $ 390 per MT how the difference between invoice and actual price was being adjusted. Shri Saigal has stated that "I want to state that according to my knowledge the importers were getting his amount directly with the suppliers. I have not dealt with any payments. My role was restricted to booking order. I am receiving my commission directly from the suppliers." The goods were thus found to be 'WG' grade in addition to the telexes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Collector had ordered that in one telex it was mentioned that 'WW' grade and 'FAQ' anonymous and one of the statement mentioned that shipment of the effect rolling only document 390 and the only meaning of this is that the value of US $ 390 per MT. M/s. R.R. Mewani & Co. had also confirmed that the price normally varies from US $ 450 to 465 per MT. Accordingly, the learned Collector had order that the value to be adopted was US $ 465 per MT. He had ordered the confiscation of the goods under Section 111 of the Customs Act, 1962 and had given option to M/s. Prabhat General Terpene Industries Pvt. Ltd., M/s. Associated Traders, M/s. Sarvodaya Resin Works to redeem the goods on payment of Rs. 2,65,000/-, Rs. 2,65,000/- and Rs. 1,60,000/-. He had also imposed a penalty of Rs. 1,30,000/- on Prabhat General Terpene Industries, 1,30,000/- on M/s. Associated Traders and Rs. 80,000/- on Sarvodaya Resin Works and 1,00,000/- on M/s. Appollo International, the indenting agent and the duty to be recovered on the enhanced value @ US $ 465 CIF per MT. Being aggrieved from the aforesaid order the appellants have come in appeal before the Tribunal. Shri A.K.S. Bedi, the learned Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i H.S. Saigal and he did not receive any notice of hearing. He has also referred to a telex messages and also para 8 of the Order-in-Original. He has pleaded that no penalty is leviable and the order imposing penalty should be quashed. 4. Shri G.V. Naik, the learned JCDR who has appeared on behalf of the respondent relied on the chemical report. He has referred to page 13 of the paper book. He has pleaded that the goods are similar to ISI specifications and are pale in colour. He has pleaded that the re-test were done very carefully. He has relied on para No. 4 of the Order-in-Original which appears on page 15 of the paper book and has referred to the telexes. He has also referred to Mr. Saigal's statement on page-21 of the paper book. Mr. Saigal has stated in his statement under-invoicing. In support of his argument he has referred to the following judgments :- 1. Satellite Engineering Ltd. v. U.O.I. & Ors. -1983 (14) E.L.T. 2177 (Bombay) 2. Jain Exports (P) Ltd. v. Collector of Customs & Central Excise, Ahmedabad. 1983 (33) E.L.T. 199 (Tribunal) 3. R.S. Joshi v. Ajit Mills Ltd. - AIR 1977 (S.C.) 2279 Shri G.V. Naik, the learned JCDR has argued that the penalty is imposed is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; E 16 D 18 A simple perusal of the chemical exam. report with the I.S.I, standard will show that the goods imported are 'WW' grade and not 'FAQ' grade as declared by the appellants in the Bill of Entries. Now coming on valuation aspect we would like to observe that the appellants had declared the value at US $ 390/- CIF for 'FAQ' grade type of gum rosin. The telexes from the file marked 'Appollo 8 & appollo 7, are reproduced below :- "At page 206 : "NEW ORDER 180 MT (10 FCL) FAQ WW GRADE SEPT PER NOL NEED YR FULL TLX LC IMMDLY FR USED 70,200.00" At page 173 : "AWTG DSUD BAL ORDERS. ALSO FR GFCL WW/FAQ GRADE SHIPMT NX WEEK CAN GIVE 3 FCL DP N 2 FCL DA AS LAST 3 FCL ALSO WENT ON DA N WE CANNOT TIE OUR FUNDS IF WE WANT FAST ROTATION" At page 164 : "5 FCL GUM ROSIN WW/FAQ GRADE USD 480 240 KG. PKG TTL 90 MT CAN SHIP ON NEPTUNE JASPER ETD AUG 13. PLS INFM MODE OF PAYT MUST BE LC OR DP AS FUNDS TIGHT" At page 122 : "GUM ROSIN 'IS' GRADE (SIMILAR TO 'N' GRADE) 500 M/T AT USD 387 FOR INDONESIAN PORT" At page 101 : "OFFERING GUM ROSIN FAQ/IS GRADE INDONESIAN ORIGIN PACKED IN 30 KGS NETT PER ZINC TINS THEN INTO GUNNY MINIMUM 100 MT USD 450 MT CNF MADRAS SHIPMENT MAY" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that there was undervaluation of the goods imported by the appellants. The learned Advocate's contention that there was no sufficient evidence is not acceptable. The judgments cited by the learned Advocate do not help him. The Tribunal in the case of Macreill & Magor Limited, Calcutta v. Collector of Customs, Calcutta reported in 1987 (28) E.L.T. 318 (Tribunal) had held that "When the Bill of Entry or the declaration appended thereto or Section 111(m) speak of 'value', it has to be the value as defined in the Customs Act, i.e. in Section 2(41) thereof, and not the invoice price if such price is different from the 'value' (the price ordinarily charged). There is no point in asking the importer to declare only the invoice price because the invoice is even otherwise required to be annexed to the Bill of Entry under Section 46(4) and the Customs Assessing Officer could ascertain the invoice price from the invoice itself. No doubt, the Customs Officer is independently required to examine the goods and to determine their value and the duty leviable thereon under Section 17. But that does not mean that the importer has not to declare the value, as defined, in the Bill of Entry. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the quasi judicial authority must look into the gravity of the offence. The broad principle that punishment must be proportioned to the offence is or ought to be of universal application save where the statute bars the exercise or judicial discretion either in awarding punishment or in releasing an offender on probation in lieu of sentencing him forthwith. Para No. 10 from the said judgment is reproduced below :- "We are unable to accept the appellant's contention that the Probation of Offenders Act can have no application to offences consisting of the contravention of the Customs Act or the 'Gold Control' Rule contained in part XII-A of the Defence of India Rules, 1962. True, that these offences are fundamentally of a different genre and are calculated to involve consequences of a far-reaching character as compared with offences under the general law of Crimes. These are mostly economic offences which inconceivable cases may pose a grave threat to the economy and the security of the country. But every contravention of the Customs Act or the 'Gold Control' Rules cannot, without more, be assumed to be fraught with consequences of national dimensions. The broad principle that pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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