9911796707
TMI Blog2002 (7) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... herein the split-up value in respect of each item was shown and the average value per unit worked out to USD 149.35 i.e. Rs. 7206/- approximately. As the items imported were in the nature of consumer durables and were highly prone for under-invoicing, market enquiries were made, which revealed that the value for similar goods stood in the range of Rs. 20,000/- to Rs. 30,000/- and hence on the reasonable belief that the goods were undervalued, the appellants were called upon to have the goods valued by an independent Chartered Engineer in order to ascertain the correct value. The Chartered Engineer, made a detailed study of the video games and furnished his report, he opined the machines are about 6 years old and that the expected balance technical life was estimated to be about 15 years with timely and proper maintenance. He subsequently arrived at a revised value of Rs. 14.91 lakhs after allowing admissible deductions, whereas the declared value was Rs. 5,82,474/- CIF. Thereby the goods appeared to have been undervalued by more than twice. Since the age of the machines was found to be less than 10 years, there was no violation of licensing. In terms of Para 5.3 of the Exim Policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Section 124 of the Customs Act, 1962 as there is absolutely no provision in the Act for the waiver of a show cause notice and that the provisions of Section 124 of the Act being mandatory must invariably set out the grounds for the confiscation of the goods and imposition of the penalty. Reliance was placed on the decision in Maqbool Hussain v. State of Bombay - 1983 (13) E.L.T. 1284 (S.C.) = AIR 1953 S.C. 325, K. Rama Rao v. Additional Collector of Customs, Calcutta and Another - 1983 (14) E.L.T. 2267 (Mad.) and S.A. International v. CC - 1988 (36) E.L.T. 445 (Cal.). Even if a written show cause notice is waived in terms of the proviso to Section 124, the appellant ought to have been told of the allegations against them, that the goods are liable and afforded an opportunity to represent against the confiscation and penalty. The order, does not reveal that the allegations were explained to the appellant and therefore the order suffers from a serious infirmity and is grossly irregular and illegal. Reliance was placed on the decisions in Andrew Pereira v. CC - 1986 (25) E.L.T. 753 (T) and Sachdeva & Sons v. CC - 1987 (29) E.L.T. 917 (T) in support of the above contentions. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the Departments own examination of the goods. (iii) The description on the goods and deduction for profit margin have been arbitrary fixed and no reasons have been stated for the same. (iv) The valuation of the goods does not conform to the accepted principles of valuation of imported goods and ignores the mandate of Section 14 of the Act. (v) The importer-appellant was not given an opportunity to contest the observations made by the Chartered Engineer. (vi) The value of the goods has been arrived at based on market inquiries from traders and not manufacturers of the goods and therefore the valuation report is not of manufacturers of the goods and therefore the valuation report is not in accordance with the Rules [CC v. Kejriwal Alloy and Metal Pvt. Ltd - 2001 (130) E.L.T. 815 (T)] (i) The appellant submits that all the essential ingredients of the "value" of the goods imported by them have been satisfied as specified in Section 14 of the Act and therefore it was incumbent on the Department to accept the value declared in the relevant Bills of Entry. The impugned order has been passed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 1998 (102) E.L.T. 324 (T) and Sree Nakoda Impex v. CC - 2001 (130) E.L.T. 87 (Tri-Chennai), wherein it was held that the domestic price in India of indigenously produced goods is irrelevant for the purpose of valuation. The goods cannot be said to be undervalued for the reason that the price is a negotiated price. The appellant relies on the decision in Basant Industries v. CC - 1996 (81) E.L.T. 195 (S.C.) in support of the above contentions, allegations of under-invoicing are to be supported by evidence. The appellant relies on the decision in Walia Enterprises, Amritsar v. CC - 1987 (32) E.L.T. 774 (T) in support of their contentions. (o) Section 111(m) of the Act cannot have any application in the present circumstances. Section 112 of the Act cannot be invoked to impose penalty on them as the Department has not established the mens rea or guilty mind for imposing penalty under Section 112 of the Act. It would be necessary to establish a guilty mind before imposing penalty and as held in the decision in Akbar Badruddin Jiwani v. UOI - 1990 (47) E.L.T. 161 (S.C.) and SIJ Electronics Comp Tech Pvt. Ltd. v. CC - 2001 (129) E.L.T. 528 (T-Bang). Penalty is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find force in the plea of the ld. DR and his reliance on the decision of the Supreme Court in the case of the Pine Chemical Suppliers reported in 1993 (67) E.L.T. 25 (S.C.) wherein the court has held as follows : - "14. The above discussion makes it clear that the misdeclaration of the goods imported by the appellants rendered it liable to confiscation under Section 111(m) and attracted Section 112 for imposition of penalty for improper importation of goods on the appellants on adjudication made under Section 122 giving the appellants option to pay fine in lieu of confiscation." Following the same, we would reject all arguments made as regards the liability for confiscation and or penalty under Section 112 of the Customs Act in this case, by the appellants. (c) We find that this Bench of the Tribunal in the case of Shreeji Agencies reported in 2001 (136) E.L.T. 200 (Tri-Bang.) had held "since the description of the goods is not found to be correct, the invoice value for transaction of 'off-cuts' cannot be accepted. The valuation has to be done as per Valuation Rules." Following the same, when there is a mis-description of the goods found, we wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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