TMI Blog1998 (10) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... as value enhancement has been ordered and a redemption fine of Rs. 2,65,00,000/- has been imposed. In these cases, demand of duty of Rs. 1,54,19,777/- has been confirmed. (c) A penalty of Rs. 1,54,19,777/- have been imposed under Section 114A in respect of consignments already cleared and Rs. 8,00,000/- towards penalty is further imposed under Section 112(a) of Customs Act, 1962 for the current consignments. (d) A further personal penalty of Rs. 2,00,000/- has been imposed on Shri Ashok Soota, Group President, Rs. 1,00,000/- on S/Shri Sathish Menon, Company Secretary, Ragupathy, General Manager (Materials) and K.C. Harsha, Manager (Procurement). 2. The matter involves two basic issues as follows :- (i) Whether goods imported under these Bills of Entry under purchase orders commencing from 6-12-1994 and ending on 28-7-1995 are to be treated as components of computers falling under Heading 8473.30/8424.90/8471.92 or complete personal computer systems (as held in the impugned order) falling under 8471.91. (ii) Whether the values declared in these Bills of Entry are to be accepted or the enhancement thereof by 10% under Customs Valuation Rules (Rule 8) is justifiable. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, it was erroneous to consider these imports as complete computer systems in SKD/CKD. He submitted that there are 46 purchase orders involved starting from 6-12-1994 to September, 1995 and 75 Bills of Entry involved in the imports being from February, 1995 to September, 1995. (e)He further submitted that the report of the Surveyor available on Page 198 of Volume V of the paper book, clearly shows that the imports were of components and the CPU was not contained in the Mother Board. He submits that this is a good evidence in this connection. (f)The learned Senior Advocate further submits that as is contained in internal Page 33 of the impugned order, the learned Commissioner has recorded therein that since the technical experts were not agreeable to being cross-examined, therefore, all the technical opinions are not considered by him, while passing the impugned order. Therefore, the impugned order is not based on any technical opinion of experts and is a non-speaking order. (g)The learned Senior Advocate submits that when their objection was to the opinions obtained only on the first set of samples drawn on 17-8-1995 and not on the revised opinion dated 16-10-1995 on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his vital evidence has not at all been considered in the impugned order and to this extent, the order is a non-speaking one. (k)The learned Senior Advocate further submitted that the Import Policy involved was making distinction between components which were available for import under OGL, except those which fell under the restricted list like Key-board and Monitor etc. All the key-boards and monitors imported by them were therefore, backed by a valid Special Industrial Licence issued by DGFT and it was their contention that other components legitimately could be imported under OGL. In this connection, he submitted that the ITC Policy as contained in Para 156F is more specific to computers than Para 156A thereof. He further submitted that the policy has to be read in two parts i.e. that prevailing up to 31-3-1995 and that prevailing after 1-4-1995 and referred to Page 302 of Volume V of the paper book, wherein he submitted that after 1-4-1995 the term `parts has been excluded from the heading `consumer goods . In this connection, he cited the case Tarachand reported in 1983 (13) E.L.T. 1456, wherein it was held that the Interpretative Rule 2(a) under the Customs Tariff Act was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled law that mandatory penalty cannot be imposed with retrospective effect i.e. prior to the coming of the said section into force. To support this contention he cited the following decisions :- (1) Marcandy Prasad Radhakrishna Prasad Pvt. Ltd. v. C.C.E. as reported in 1998 (102) E.L.T. 705 (Tribunal) = 1998 (25) RLT 919 (CEGAT); (2) Lakshmi Packaging (P) Ltd. v. C.C.E. as reported in 1998 (98) E.L.T. 91 (Tribunal); (3) Universal Electrodes P. Ltd. v. C.C.E. as reported in 1998 (99) E.L.T. 134 (Tribunal). In this case, the imports are prior to the introduction of Section 114A of the Customs Act, 1962, which came into force from 28-9-1996, whereas the imports in question ended in September, 1995. He, therefore, submitted that no mandatory penalty under this section was imposable, particularly as there was no allegation also of the offence continuing thereafter. (p) With regard to the valuation issue, wherein the declared value has been enhanced by 10% under Rule 8, the learned Senior Advocate submitted that the only ground on which transaction value has been discarded is Memorandum of Understanding dated 18-11-1994 (Page 453 of Volume III of the paper book). He subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported. Thirdly, he submitted that there exists a relationship between M/s. WIPRO and M/s. ACER i.e. importer and exporter because of the importer being allowed to use the brand name of the exporter, even though no royalty was paid to the exporter. This special relationship is also demonstrated by assertion in the catalogue of M/s. ACER that M/s. WIPRO is the sole operator of M/s. ACER in India. Therefore, there exists a relationship with each other, and the importer-appellants have misdeclared that they were not related to each other, as per Bills of Entry. 6. The learned JDR also submitted with regard to aggregation of the imports concerned in the impugned order, that while it is true that Para 156F of the ITC Policy is more specific to computers, however, the imports made in these Bills of Entry still constitute the computer systems because of the following reasons :- (a) He referred to Page 307 of Volume V of the paper book, wherein a copy of the relevant ITC Policy was placed and referred to the Entry at serial number 65 on Page 308, wherein the word consumer goods have been used in connection with computers. He thus argued that since DGFT uses the word consumer goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der) without explaining in detail how this is established; (e) Department of Electronics being a Government department, there was no question of soliciting any opinion in their favour. Department of Electronics s opinion is relevant for computers; (f) The case law of Sharp Business Machines (supra) is distinguished on facts as well as law. He drew a distinction between absolute prohibition and a restriction. In present matter there was an alleged restriction but no absolute prohibition. Secondly, on facts, in Sharp Business Machines, 10 machines in CKD was imported under one single Bill of Entry (out of total 14). This was not the case here, so it is distinguishable on facts. He further submitted that ITC Policy should be read plainly. 7. We have carefully considered the arguments on both sides as well as the records of the case. We find that the impugned order suffers from non-application of mind on the following issues :- (a) The expert technical opinion on the samples dated 5-10-1995, which is not disputed by the appellants has also been discarded. As a result there is no expert opinion considered on this issue, particularly when the written opinion of Department of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 2(a) of Customs Tariff Act, 1985 cannot be used to interpret either notifications or Import-Export Trade Control Order. The impugned order has held imports violative of the ITC Policy by aggregating imports in terms of the said Rule 2(a). As against this, appellants have all along stressed that Para 156F of ITC Policy supersedes the Para 156A thereof, the former being more specific to computers. The impugned order is silent on this issue; (e) It is also now well settled law that mandatory penalty cannot be imposed with retrospective effect i.e. prior to Section 114A of Customs Act, 1962 coming into force on 28-9-1996. Since subject imports were much prior to this, the impugned order has not discussed how and why this penalty is still imposable; (f) With regard to the valuation matter, the impugned order does not clearly explain as to - (i) how the memorandum of understanding taints the transaction value in these imports; (ii) how, when provisions of Rule 2(2) of the Customs Valuation Rules, are not attracted by this memorandum of understanding, does a relationship exist between the importer and the foreign exporter; and above all, (iii) how and as per what evidence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
