TMI Blog1997 (1) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... zirconia in 25 packages said to have been imported as aforesaid and cleared as per Bill of Entry dated 22-9-1989 were found. Their description with regard to grading did not tally with what was described in the said import documents. Accordingly, the goods were seized under Section 110 of the Customs Act, 1962 (for short, the Act) under the belief that the imported consignment was grossly under-invoiced and hence liable to confiscation under Clauses (d) and (m) of Section 111 of the Act. Foreign currency as also the documents were seized. The goods were got examined by Shri Khandelwala, Scientist of M/s. Diamond and Gems Development Corporation with due notice to appellant and in the presence of appellants clearing agent. Examination showed that the consignment consisted of 10% Grade A pieces, 40% Grade B pieces and 50% Grade C pieces and not of 3rd Grade inferior as declared and the prices were quite big in size, transparent and free from cracks and their shapes and sizes were such that recovery percentage of polished stones will be quite high. Letter dated 5-9-1989 of a supplier seized from appellants premises showed price of Grade A as US $ 90/100 per kg. and letter of anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely on the report of Shri Khandelwala . It is not true to say that appellant had blank invoices one of which was converted by showing a very low price : these forms as well as blank letterheads and foreign currency belong to Shri Kumar, representative of the supplier who left the same at the appellants premises by oversight as stated by him in his letter. The Collector should not have relied on the alleged statements recorded on 25-10-1989 and 26-10-1989 which had been written without reference to the actual statements and which had been retracted on 27-10-1989. Goods had been insured for the declared value. There are no standard gradation for rough stones. Every trader makes his own gradation. Shri Khandelwala, the Scientist cannot be regarded as an expert on valuation. The documents on the basis of which valuation was made are unreliable. 3. The Departmental Representative rebutted the above contentions and relied on the earliest statements recorded from Shri Satya Narayan Kala, a partner of the appellant. He also contended that all the contentions raised were the result of afterthought and do not receive any support from the original version given by the parties. He also c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er also refers to this stock. We find that the Collector did not deal with this important contention which would go to the root of the case propounded in the show cause notice. We do not know whether the officers who searched the premises made a record of the existing stock or entries in the stock register. We do not also know whether the Collector called for the stock register to verify the correctness of this contention. Finding could not have been recorded against the appellant without considering this contention. 6. Collector recorded that at the time of assessment of the goods on presentation of import documents stones were not properly examined. It is not known if there is any material in support of this conclusion other than the contents of the report of Shri Khandelwala which was recorded on 3-1-1990. Endorsement on the Bill of Entry made by the departmental officers and others, it is pointed out, show that the valuation was fair. The only material relied on by the Collector in regard to the quality of stones and valuation is the report of Shri Khandelwala. Our attention is invited to a letter dated 19-12-1989 of the appellant addressed to Collector objecting to the exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome to the conclusion that the appellant must have utilised one of the signed blank invoice to be presented for clearance of subject consignment. This finding is assailed by appellant by referring to the stand taken by the appellant in the reply to the show cause notice and even in some earlier letters to the effect that they were left behind by Shri Kumar, representative of the supplier when he visited appellant s premises in August, 1989. Reliance is also placed on a letter dated 4-11-1989 of Shri Kumar addressed to the Assistant Collector stating that he had left invoices, printed letterheads and some currency in a cover by mistake when he visited appellants premises on 1-9-1989 and requesting the Assistant Collector to send the same to him. Appellant s partner Shri Satyanarayan Kala had been questioned on 25-9-1989 and 26-9-1989 on which dates search was conducted. Appellant has no case that the partner gave this explanation when he was questioned at the earliest possible opportunity. On the other hand, in his statement dated 25-10-1989 he admitted that he had visited Hong Kong and Bangkok in September, 1989 and received foreign currency through Reserve Bank of India, that at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by appellant. Therefore, finding regarding misdeclaration of value and under-invoicing and the quality of stones in the subject consignment cannot stand and the question requires fresh consideration. 11. Foreign Currency : There is no dispute of 141 US $, 880 Thailand Bahts and 30 HK $ being found in the drawer of table in the appellant s premises. We have already referred to the statement given by partner Satyanarayan Kala on 25-10-1989 and 26-10-1989 admitting ownership of the foreign currency and the subsequent story to the effect that the currency belonged to Shri Kumar, representative of the supplier. We have indicated that was an afterthought and the earliest statement of the partner must be true. We therefore agree with the finding that there was violation of Section 13 of F.E.R. Act, 1973 read with Section 11 of the Customs Act, 1962 and the foreign currency is liable to confiscation under Section 111(d) of the Customs Act, 1962. Penalty has been imposed in connection with the goods as well as foreign exchange. Since we are remanding the case in regard to the aspect of misdeclaration of value the quantification of penalty has to be done afresh. We have no doubt that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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