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TMI Blog2011 (1) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 by the High Seas buyers namely, M/s. Supershva Industries, M/s. Transtamp (I) Pvt. Ltd. and M/s. Alfa Trancore Industries. All the consignments were cleared on payment of duty based on the declared value. Subsequently, investigations were launched into the imports by officers of the Directorate of Revenue Intelligence ( DRI) which started with a search of Dungarmal s premises on 11.3.1999. Some records were recovered from those premises. Statements of Dungarmal Doshi (Proprietor), his son Mukesh Doshi and Anil Modi ( one of the partners of Modi Bros.) were recorded from time to time. DRI officers also retrieved some fax messages received at the premises of Anil Modi on 13.5.99. They also obtained, from other sources, certain documents such as Bank Advice, Invoice, correspondence etc. On the basis of the results of these investigations, DRI issued the subject-show-cause notices proposing - a) to enhance the value of the goods and demand differential duty thereon from the parties who filed the subject-Bills of Entry ; b) to confiscate the goods under Sec.111(m) of the Customs Act ; c) to impose penalties on the noticees under Sec.112/114 A of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) from Derek Turner of ODC to Modi Bros., Bombay. This document contained an estimate of US$ 3,038.32 as total commission payable to Modi Bros. by ODC in respect of 5 consignments of goods sold by ODC to Indian customers, 2 of these consignments sold to Dungarmal. In respect of the 2 consignments sold by ODC to Dungamal, the Telex message contained the following particulars :- Invoice No. Customer Qty.M/T Price PMT Amount CIF Freight Amount FOB Commission 2% 93288 Dungarmal 60.081 975 58,578 6,008 52,570 1,051.40 93292 Dungarmal 42.00 825 34,650 4,200 30,450 609.00 The adjudicating authority found that, though the unit price mentioned in the above two invoices were $ 585 and $ 485 PMT respectively, the commission payable to Modi Bros. was estimated at 2% of the price calculated at the rate of $ 975 and $ 825 respectively. The other documents already referred to were relied upon by the ld.Commissioner to hold that an amount of US$ 38000 was paid by Dungarmal to ODC as differential price on the goods covered by invoice No.93288 and No. 93292. The ld.Commissioner further relied on Anil Modi s stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty by enhancing the value of the goods treating the goods as similar to the goods covered by certain standard invoices. The position can be summarized as follows: - Appeal No. No.of Bs/E Invoice as basis of enhancement of value C/430/02 1 No. 53822 A dtd18.9.95 C/472/02 5 -do- C/466/02 1 No. 53815 A dtd 6.9.95 C/471/02 2 No. 93288 dtd 30.5.94 C/467/02 1 -do- C/431/02 2 -do- Obviously, the value of the goods covered by the first 3 cases above was enhanced on the basis of alphabetically marked invoices involved in Group II, whereas the value of the goods covered by the remaining cases was enhanced on the basis of the evidence pertaining to Group I. (4) The ld.counsel for Dungarmal submitted that the transaction value was correctly declared by them and that no valid reason was stated by the Commissioner for rejecting the same. The department should have given cogent reasons for rejection of the declared value. Before rejecting the value, the department should have atleast ascertained whether there were any imports of similar goods at the same time. In the absence of such evidence, there could be no valid reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007(212) ELT 458 (S.C.). According to him, the above documents did not meet the requirements of either of these provisions so as to be admissible as documentary evidence in the case. The counsel also pointed out that no attempt was made by the investigating agency or even by the adjudicating authority to get the handwritten entries on BOOK CREDIT ADVICE at page 139 (otherwise referred to as Bank Advice ) examined by any forensic expert to ascertain the genuineness of the said entries. It was pointed out that all the documents were of the month of May 1994 and hence the circumstances in which the DRI received them by fax after 5 years and, that too, exactly at the time of search of the premises of Modi Bros were suspect. For all these reasons, the ld.counsel urged that no reliance be placed on the above documents. (5) In this connection, ld. counsel claimed support from Collector vs East Punjab Traders 1997 (89) ELT 11 (S.C.) and Bussa Overseas Properties Ltd. vs Commissioner 2001 (137) ELT 637 (Tri- Mum) affirmed in 2007 (216) ELT 659 (S.C.). He also referred to statements of Dungarmal Doshi. Among the numerous statements given by Shri Dungarmal Doshi, one dated 25.5.99 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , was not liable to be used to prove undervaluation of the goods purchased by Dungarmal Doshi from ODC under cover of the aforesaid two invoices. It was also submitted that a case of undervaluation could not be framed and established against Dungarmal Doshi solely on the basis of ODC s letter to their indenting agent or on the basis of a statement of the indenting agent. In the absence of evidence like contemporaneous import of identical or similar goods at higher price, the department could not have rejected the invoice value (transaction value). In this connection, ld. counsel relied on Commissioner vs South India Television (P) Ltd. 2007 (214) ELT 3 (S.C.). The ld.counsel also reiterated 2 grievances of Dungarmal Doshi :- (1) the plea for forensic examination of the handwritten entries in the Bank Advice ( the name Dungarmal Doshi and invoice numbers) was not considered by the Commissioner; (2) the request for cross-examination of DRI officers was also not considered. Finally, it was argued that the demand of duty on the goods imported under cover of invoices No. 93288 and No. 93292 from ODC was not supported by any cogent evidence and hence the same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion by Dungarmal Doshi, the SDR submitted that such retraction was not to be accepted and that the same was rejected forthwith by the DRI on specific grounds in a letter dated 28.5.99 to Dungarmal Doshi. The SDR submitted that, if the earlier statement dated 25.5.99 of Dungarmal Doshi had been extracted by use of coersion, force, pressure, promise or physical assault as alleged by him, the burden was on him to prove the allegation. In the absence of such proof, the statement dated 25.5.99 was to be treated as voluntary. In this connection, reliance was placed on case law viz.Surjeet Singh Chhabra vs Union of India 1997(89) ELT 646 (S.C.) ; Vinod Solanki vs UOI 2009 (233) ELT 157 (S.C.) ; Jogani Tyres (India) vs. Commissioner 2010 (255) ELT 264 (Tri- Mum,). (8) In the absence of valid retraction, Shri Dungarmal Doshi s statement dated 25.5.99 was rightly relied on by the adjudicating authority to hold that US$ 38,000/- was paid by Dungarmal Doshi to ODC as differential price for the goods covered by invoices No. 93288 and No. 93292. In this manner, the ld.SDR sought to defend the calculation made by the adjudicating authority who worked out an amount of US $ 37,771.59 after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i s statement, the undervaluation of the goods was to the extent of US$ 37,771.59. Shri Anil Modi stated that US$ 38,000 had been paid by Dungarmal Doshi to ODC as differential price of the goods covered by the above two invoices. The statement of Anil Modi was never retracted. Anil Modi was not sought to be cross-examined by Dungarmal Doshi either. He was admittedly the indenting agent for ODC and handled Dungarmal s purchase orders in respect of the subject goods. We find no reason to discredit his uncontroverted evidence. Coupled with this is the fact that the statement dated 25.5.99 of Dungarmal Doshi is in the nature of admission of having paid US $ 38,000 to ODC. Doshi was confronted with all the facsimiles (received by DRI on 13.5.1999) as well as the invoices No. 93292 and No. 93288 during the course of recording of the statement on 25.5.99. He admitted that the two invoices covered 42 MTs and 60.081 MTs of steel imported by him from ODC and that ODC s letter dated 25.8.94 to Modi Bros. (page 134/PB) showed a higher price for the goods than its invoice price and that the differential price was around US$ 38,000/-. Dungarmal also admitted his authorship of the letter dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.5.99 was rightly accepted by the adjudicating authority as his voluntary statement of true and correct facts. We have also considered the relevant decisions cited before us. In the case of Devi Dass Garg, the Tribunal rejected the retraction of a statement on the ground that the person concerned failed to prove that he had been assaulted by the investigating officers to extract a confessional statement. In the case of Surjeet Singh Chhabra, the apex court held that a confession made under Section 108 of the Customs Act, though subsequently retracted, remained a binding admission. (11) We have also examined the provisions of Sec.138C and 139 of the Customs Act. We have not found either of these provisions to be of any support to the appellants. On the other hand, Section 138C seems to operate in aid of the Revenue inasmuch as it provides that a facsimile copy of a document shall be deemed to be a document for the purposes of the Act/Rules and shall be admissible in any proceedings under the Act/Rules, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein. The adjudicating authority has rightly relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on therein. It was open to Alfa to produce invoices (if any) issued by Dungarmal (high seas seller). The Revenue has established that Dungarmal paid a higher price to ODC than what was mentioned in the aforesaid invoices. In the ordinary course of trade, Dungarmal would not sell the goods to Alfa at a price lower than what they paid to the original supplier (ODC). Looking from this angle, we have to hold that Alfa declared a lower value for the goods in the Bs/E than what they paid to Dungarmal at the high seas. In other words, Alfa should be held to have undervalued the goods with intent to evade payment of appropriate duty. Therefore, in the hands of Alfa, the goods became liable to confiscation under Sec.111(m) of the Customs Act. By misdeclaring the value of the goods with intent to evade payment of appropriate duty, Alfa rendered themselves liable for penalty under Sec.112 of the Act. The ld.SDR has rightly submitted that no mens rea requires to be established against an importer before imposition of penalty on him under Sec.112 of the Act. He has, in this connection, relied on the High Court s judgment in Commissioner of Customs(Export), Chennai vs Bansal Industries [2007(207 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the price mentioned therein, by Dungarmal to ODC. One fact which was highlighted by the ld.counsel in this context was that none of the alphabetically marked invoices had been recovered from Dungarmal . We have heard ld.SDR also, who has reitereated the findings of the Commissioner. (14). We find that the price mentioned in the original invoices No. 53822, No. 53823, No. 53824 and No.53815 issued by ODC to Dungarmal and declared in the relevant Bills of Entry was rejected by the adjudicating authority, who held that the value mentioned in the corresponding alphabetically marked invoices No. 53822 A, No.53823 A, No. 53824 A and No. 53815 A, which were treated as supplementary invoices issued by ODC to Dungarmal , was liable to be added to the declared value to get the assessable value. This finding of the Commissioner took care of 4 Bills of Entry in Group II. In respect of the remaining 2 Bills of Entry in this group also, the ld. Commissioner enhanced the value of the goods on the basis of one of the above-mentioned alphabetically marked invoices in the absence of any alphabetically marked invoices corresponding to the 2 original invoices of ODC produced by the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments will be of no relevance. For all these reasons, we are unable to accept the said alphabetically marked documents as evidence of undervaluation of goods by those who filed the relevant Bills of Entry. In the result, the value declared in the relevant Bills of Entry will have to be accepted, particularly in the absence of proof of contemporary imports of identical/similar goods at higher value. Therefore, all the appeals in Group II have to be allowed and it is ordered accordingly. (15). In Group III, 4 appeals filed by Dungarmal and 1 appeal filed by Supershva Industries are directed against demands of duty and penalties while one appeal filed by Dungarmal and 3 appeals filed by Anil Modi are against penalties. In this group, the ld.Commissioner determined the amounts of duty by enhancing the value of the goods by treating the goods as similar to the goods covered by certain invoices taken as standard. Alphabetically marked invoices No. 53822 A dated 18.9.95 and No. 53815 A dated 6.9.95 were taken as standard for enhancing the value of the goods covered by 7 Bills of Entry in this group, which are the subject-matter of Appeals C/430, C/466, C/472/02. We have already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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