9911796707
TMI Blog1999 (6) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... F) being the difference between the ascertained value and the declared value has been imported without a valid import licence/list attestation rendering these goods liable to confiscation under Section 111(d) of Customs Act, 1962. The importer have also resorted to deliberate gross mis-declaration of value of the goods. Entire goods valued at Rs. 3,69,17,713. But for the detection duty to the tune of Rs. 2.41 crore would have been lost to the Govt. are therefore liable to confiscation under Section 111(m) of the Customs Act, 1962. I find from records that the importers had secured the differential duty covering the present consignments by furnishing Bank Guarantee of Rs. 50 lakhs (Rupees fifty lakhs only) and pledging a consignment of 400 sets of photocopier parts in bonded warehouse. These facts were also incorporated in the Order of the Hon'ble High Court dated 4-9-1991. After careful consideration of all the facts, I hold the goods liable to confiscation under sections 111(m) and 111(d) of the Customs Act, 1962. However as the goods are not available for confiscation on account of these have already been released in compliance with the Hon'ble High Court's Order. The importer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier on the ground that the indigenous material manufactured by them would only be utilised in respect of said 300 components already imported and detained by the Customs. The department insisted that the importers furnished a further bank guarantee of Rs. 70 lakhs or alternately furnish bank guarantee for Rs. 20 lakhs and keep as security the 400 sets of components. Appellants furnished bank guarantee for Rs. 20 lakhs. The last consignment arrived at Calcutta on 25-5-1991. The appellants filed bill of entry for warehousing. Appellants on 6-8-1991 filed a bill of entry for 200 sets only out of 400 sets of components. However, in the mean time a show cause notice was issued on 9-8-1991 alleging that during investigations made earlier into the importation of goods to be components of photocopying machines the importers submitted CKD pack price of Toshiba, Japan for Model BD 5110 showing Yen 2,07,200 per set. The supplied goods are from Toshiba, Japan; that the unit price declared in the for proforma invoice for CKD pack price showed much higher price than the one declared in the invoices of the subject consignment. Shri Aloke Garg, Dy. Manager of the importers was summoned and his sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 lakh 20 thousand imported components 588 numbers and indigenous components 491 numbers. 5. CIF price for individual items were to be declared on the basis of SKD/CKD/price quoted by Toshiba, Japan + 10% approx. towards freight and insurance. It was also noticed that Toshiba, Japan had confirmed the prices of the complete machine of Model No. BD 5110 as J. Yen 3 lakh 20 thousand CIF in their letter dated 24-11-1983. It was also contended that after execution of foreign collaboration agreement with M/s. Toshiba, Japan the Indian importer initiated further negotiations with M/s. Toshiba, Japan who agreed to supply the complete machine BD 5110 at a price of J. Yen 1 lakh 55 thousand without drum; that they also agreed to a price of J. Yen 1 lakh 95 thousand 6 hundred FOB for SKD packs in 315 items, J. Yen 2 lakh 7 thousand 2 hundred FOB for CKD packs in 960 items, complete machine BD 3110 at a price of J. Yen 63 thousand 3 hundred FOB (without drum), J. Yen 1,09,670 FOB for CKD pack of 343 items. It was alleged that M/s. Toshiba, Japan appeared to have agreed to supply at the prices mentioned above on the basis of a request/suggestion made by M/s. H.C.L. to the effect that sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o value can be determined of the highest of the two alternative values or on the price of goods in the domestic market of the country of export; that there was no authority vested in the Customs to fix 3 lakh 20 thousand J. Yen as value when the same is not the transaction value. It was submitted that the department had violated Section 14 of the Customs Act and Valuation Rules, 1988. It was contended that at the time of applying for special licence on 21-1-1991 the importer had given the said price for the purpose of obtaining the special licence; that when the importer approached M/s. Toshiba for supply of large quantity of components M/s. Toshiba offered to sell such large quantity of components on the basis of the prices in the proforma invoice and that on the basis of this proforma invoice the Indian importer placed the Order with M/s. Toshiba that the same was a commercial sale at arms length. It was also contended that no evidence had been placed on record that the prices shown in proforma invoice were not transaction values or were not at arms length; that the collaboration agreements dated 24-9-1987 is for technology including technical know-how on payment of a royalty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in Sneha Traders (P) Ltd. and Sandip Agarwal (supra) and the adjudication Order dated 6-12-1991 of the Collector of Customs (Judicial), we are of the view that the valuation made by the Collector in the adjudication Order dated 15-11-1991 cannot be sustained. We, therefore, set aside the Order dated 15-11-1991. So far as it relates to the valuation and determination of the assessable value the Collector of Customs (Judicial) or any other Collector of Customs shall pass a fresh Order determining the assessable value taking into consideration the aforesaid decisions of the Court as well as other decisions on the aspect of valuation and the Order of those 1-2-1991 passed by the Collector of Customs (Judicial) and also the Customs Valuation (Determination of Price) Rules, 1988. Such fresh Order shall be passed after giving the appellant a reasonable opportunity of being heard within a period of three months from date." Pursuant to this Order the appellant in addition to oral submissions made the written submissions after the personal hearing on 17-9-1993. It was submitted that the importer had imported two consignments of 400 sets and 1400 sets of parts of photocopier Model No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he noticee itself this value has to be the basis for the current import of 1400 sets. It was also submitted that in respect of 60% to 65% of components of 1400 sets, the transaction value declared by Toshiba and the Indian importer is on principal to principal basis; that the department had not produced any contemporary invoices relating to the import components from Toshiba by other importer; that there is no allegation of any payments made by H.C.L. to Toshiba by channels otherwise than during the bank channels; that the value had already been accepted by the earlier Collector; that the price of J. Yen 3,20,000 was retail price in Japan and was inclusive of insurance and freight; that the issue of valuation was squarely covered by the decision of the Hon'ble Calcutta High Court in the following cases. (a) Sneha Traders (P) Ltd. - 1992 (60) E.L.T. 43 (Cal.) (b) Sandip Agarwal v. C.C. - 1992 (62) E.L.T. 528 (Cal.) 12. After considering the various submissions impugned order was passed by the Collector on 26-4-1994 holding as reproduced in the earlier paragraphs. 13. Shri A.R. Madho Rao, Adv. appears for the appellant whereas Shri R.N. Das, Sr. Adv. with Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on transactions for which the seller and buyer have no interest in the business and the price is sole consideration. We note that this aspect has been deliberated upon in the findings of the Collector. Without a specific mention of these two cases, we note that the points settled in these cases were examined by the Collector and hence we do not find force in pleas of the Counsel for the appellants. 17. The second contention of the Counsel for the appellants was that the appellant cannot be saddled with a liability exceeding that which was imposed on them by the Order passed by Shri B.P. Srivastava. It was submitted that no penalty having been imposed earlier, penalty cannot be imposed when the matter was sent for re-adjudication after setting aside the order passed by Shri B.P. Srivastava. In support of his contention the ld. Counsel cited and relied upon the decisions of this Tribunal in the case of Ritu Minerals v. Collector of Customs, Calcutta - 1999 (113) E.L.T. 1005 (Tribunal) = 1999 (30) RLT 506, in the case of Padia Sales Corp. v. CC - 1992 (62) E.L.T. 760, in the case of Tata Oil Mills v. CC - 1990 (46) E.L.T. 438, in the case of State of Kerala v. Vijaya Stores - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d due to indigenisation by the appellants of the remaining components; that from the price list the price per set had not been arrived at; that this represented the transaction value of the goods; that there was no charge of clandestine remittance to foreign supplier, the transaction value had to be adopted in view of the amendment of Section 14 and enactment of Customs Valuation Rules in 1988. 2l. The Counsel for the Revenue submitted that in the instant case there was a quotation obtained from M/s. Toshiba of Japan that this quotation was produced by the appellants before the DGTD for getting licence on 21-1-1991 for import of certain goods under the phased manufacturing programme. He submitted that there is a tour report of one of the officials of the appellant company stating that "I have also told Toshiba that I want Toshiba's vendor list under process and an introductory letter from Toshiba to vendor asking the vendors to cooperate and supply to H.C.L. directly or through their agent at Toshiba prices if necessary. Toshiba will appoint agent who will deal with vendors directly". In the report it has further been added "I have emphasised that this profit will depend on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . the quotation J. Yen 3,20,000, the tour notes of the official of the appellant and absence of any documentary evidence about negotiations clearly show that the price lists an proforma invoices are manipulated and do not show the real transaction value. Therefore, the only document that remains is the quotation dated 24-11-1988. He therefore, submitted that there was sufficient reason not to accept the transaction value. He therefore supported the findings of the ld. Commissioner on this issue. 23. There were detailed arguments on the acceptability of Quotation dated 24-11-1988. It was argued for the appellants that it was well settled principle of law that the burden squarely lies on the Department to prove under valuation; that value cannot be determined on inference and in the absence of mutuality of interest between the importer and foreign supplier invoice value cannot be enhanced; that higher quotation would not by itself without there being any material or evidence to justify the inference of under invoicing and there is no evidence of clandestine remittance made over and above the invoice value. It was also contended for the appellant that enhancement of transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus the mutual interest is evident, tour note also appears to have been implemented inasmuch as the price shown in proforma invoice more or less conformed to the price in quotation as illustrated in the tour note. It was contended that the price was reduced on negotiations but there was no evidence of negotiations except the tour note which made the purported negotiated price a suspect. The quotation in the instant case becomes relevant in view of the above, it was also stated for the appellants that the price in the quotation was the domestic retail price. It was argued for Revenue that this position is, however, not acceptable in view of the fact that there was a technical agreement between the Indian importer and foreign supplier. The foreign supplier knew fully well that the Indian importer was to place bulk orders and therefore, he could not quote any price other than the international export price if not a favoured customer price. Ld. Counsel for Revenue submitted that looking to the facts and circumstances stated above, in the instant case quotation becomes more acceptable in view of the fact that it was submitted to Govt. authorities as the representative price for obtainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was of 1988 whereas the imports were during the period of 1991. It was, therefore, contended that as there was no import at the value of the quotation nor was any import at a higher price than the prices declared in the price lists and the proforma invoices, transaction value must be accepted. We note that this quotation dated 24-11-1988 is not a mere quotation. This quotation has been made use of for obtaining a licence for importing goods in 1991. If the importers knew that the prices have gone up or had gone down they should have obtained a fresh quotation inasmuch as the goods under the phased manufacturing programme were imported for the first time in 1991. Thus non-changing the quotation hints at the complexity of the Indian importer. We also note that the importer was regularly importing parts of photocopying machines and thus he was fully aware of the prices prevailing in the Japanese market of the components and the complete machines and hence he would have not accepted any quotation which would have not represented the correct transaction value. 29. Looking to the above discussion we hold that the quotation price was actually the transaction value and not that pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation Rules. In the present case, we are considering the acceptability of a quotation for purpose of determining the transaction value. In the instant case the facts are identical only there is a longer time lag, but that does not make the quotation invalid inasmuch as only against that quotation the phased manufacturing programme was allowed and imports were effected in 1991. There is no evidence placed on record to show that the appellants had obtained another quotation in view of the time lag. In this view of the matter, we hold that the ratio of the decision of the Apex Court in the case of Sharp Business Machines is fully applicable to the facts of the instant case. 32. The Counsel for the appellants emphasised that transaction value under Rule 4 of the Valuation Rules is to be determined. He submitted that J. Yen 3,20,000 is the price of full machine and therefore, full machines price cannot be taken for determining the transaction value of components. He submitted that there is a lot of case law on this issue. In support of his contention he cited and relied upon the decision in the case of Informatica Software v. CC - 1997 (23) RLT 165, Dwarka International - 1999 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cost will be 60% of the value of the complete machine. Now in the instant case the value of the complete machine is J. Yen 3,20,000. The Commissioner has given a discount of 40% that is he has taken 60% as the cost. The value of the machine without the drum has been admittedly calculated to be 3,02,000. Having regard to this aspect we do not see any legal or factual infirmity in the impugned order in determining the value of the set of components of plain paper copiers Model BD 5110 imported at J. Yen 1,82,577 against the declared value J. Yen 1,25,000. 34. One small point which still remains to be sorted out and that is whether consequent to enhancement of the transaction value, and whether the difference in value, the goods should be treated as imported without a licence. On this aspect we find that there are certain decisions where it has been held that goods cannot be treated as imported without a licence. However, the goods are not available for confiscation. We, therefore, agree with the findings of this Tribunal in the case of Dee Aays Auto and Electronics, Mumbai - 1998 (101) E.L.T. 428 and hold that the goods not being available for confiscation, confiscation is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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