TMI Blog2009 (4) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Respondent. ORDER The father of the detenu is the petitioner. He filed this petition challenging the impugned order of detention which was slapped on the detenu under Section 3(1) of the Conservation of Foreign Exchange and Prevention of smuggling Activities Act (in short COFEPOSA). 2. The detenu is the proprietor of M/s. T.T. Enterprises, Trichy, engaged in the trade of apples. It is alleged that based on the specific intelligence, the officials of the Directorate of Revenue Intelligence have initiated investigation with regard to undervaluation in the import of apples from various countries mainly from M/s. Evan Fruit Company, USA and on investigation, they came to know that the detenu has committed the offence of undervaluation in the import of apples and the total customs duty evasion is to the tune of Rs. 1.75 crores and thus he has consciously evolved a modus operandi to evade payment of appropriate customs duty by producing two sets of invoices, one showing lesser value for customs and another with actual value, which is the final loading invoice and therefore it is necessary to detain him under the provisions of COFEPOSA with a view to prevent him from indul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Public Prosecutor would further submit that since all the above said documents regarding which arguments have been advanced on the part of the detenu are emanated from the detenu himself, either the non-supply of the documents themselves or the legible copies of the documents would not, in any way, vitiate the impugned order of detention. 6. On a perusal of the materials placed on record, we are able to see that the documents mentioned in the index at page Nos. 42 and 43 and the documents at page Nos. 298, 300-303, 335-338, 347, 348, 358, 362, 403, 404, 411, 412, 414, 415 and 424 are forming part of bills of entry filed by the detenu himself for the import of apples and they were submitted by the detenu himself during the course of investigation. Therefore, in our considered opinion, either the non-supply of very such documents or even the legible copies of the same, would not, in any way, have the effect of branding the impugned order of detention illegal . While arriving at this conclusion, we garner support from the judgment of the Hon ble Apex Court in Usha Agarwal v. Union of India and Others [(2007) 1 SCC (Cri) 342], wherein the Hon ble Apex Court has held that copies o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter understanding, Section 14 of the Customs Act, 1962 is extracted hereunder : 14. Valuation of goods. - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf : Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed : Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) `the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) In a sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for determination of the value of imported goods by the Proper Officer and under Rule 12, when the Proper Officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, after seeking the explanation from the importer and if the explanation is not satisfactory, the Proper Officer can reject the declared value and at the request of an importer, the Proper Officer, shall intimate the importer in wring the grounds for doubting the truth or accuracy of the value declared in relation to goods imported. 14. Thus, a thorough procedure to determine the value of the goods has been contemplated by law under these Rules. The Act and the Rules also mandates the Proper Officer to pass a speaking order, giving the reasons as to how he is not satisfied with the valuation offered by the importer. As per Section 28 of the Customs Act, when any duty has not been levied or has been short-levied or erroneously refunded or when any interest payable has not been paid, part paid or erroneously refunded, the Proper Officer may serve notice on the person chargeable with the duty within the time limit prescribed therein. Section 128 of the Customs Act provides fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision (P) Ltd. [2007 (214) E.L.T. 3 (S.C.) = (2007) 6 SCC 373]. In this matter before the Hon ble Apex Court also, the issue was undervaluation of six consignments of ceramic capacitors and one consignment of diodes while importing them from Hong Kong by the detenu. In those circumstances, the Honourable Apex Court has held as follows : Value is derived from the price. Value is the function of the price. This is the conceptual meaning of value. Section 14 of the Customs Act, 1962 is the sole repository of law governing valuation of goods. In the present case, the Department has charged the respondent-importer alleging misdeclaration regarding the price. There is no allegation of mis-declaration in the context of the description of the goods. The allegation is of under-invoicing. The charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is for the Department to prove that the apparent is not the real. The value to be declared in the bill of entry is the value determined in accordance with the provisions of Section 14(1) and not merely the invoice price. Sections 14(1) and 14(1-A) envisage that the value of any goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court squarely applies to the case on hand since in the case on hand also, the Department has failed to prove as to how they have arrived at the conclusion that there is undervaluation since there is no material on record to show that the Department has followed the procedure contemplated under the Act and Rules to arrive at the conclusion regarding the valuation. Surprisingly, the respondents have placed much reliance on the alleged confessional statement given by the detenu before the respondents at the time of investigation, though it is inadmissible in evidence, as per the Evidence Act, except to the extent of recovery under Section 27 of the Evidence Act. 18. Furthermore, there is a lot of delay in slapping the impugned order of detention on the detenu. For the alleged incident said to have taken place during the year 2005, the impugned order of detention came to be passed on 9-9-2008, for which no explanation, worth considering and appreciating, is coming forth from the respondents. Thus, we have no hesitation to hold that the respondents have committed a legal error in slapping the impugned order of detention on the detenu. On this ground, this Habeas Corpus Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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