TMI Blog2012 (4) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 18-1-2012 - M V Ravindran, P Babu, JJ. For Appellants: Shri Vikram Nankani, Adv., Shri Uday Joshi, Adv., Shri Hardik Modh, Adv., Shri Harishankar, Adv. For Respondent: Shri K M Mondal, AR Per: M V Ravindran: All these appeals are preferred against Order-in-Original No. KDL/COMMR/78/2003, dt.26.12.03. Since all the appeals are arising out of the issue from the same Order-in-Original, they are being disposed of by a common order. 2. The relevant facts that arise for consideration are appellant "M/s Colourtex is a merchant manufacturer and was engaged in the business of export of dyes, chemicals and polished diamonds. The appellants purchased CD ROMs from M/s. Padmini Polymers Ltd., New Delhi at a price of Rs.600/- to Rs.615/- per piece and exported through Kandla Port. On an investigation conducted by DRI, show cause notice was issued seeking to re-determine the value of the CD ROMs exported on the ground that the value which was declared was excessive. The said show cause notice also sought to impose penalties on the partner of the exporter M/s. Colourtex, M/s. Adani Exports Ltd. and M/s. Padmini Polymers Ltd. All the appellants herein contested the show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced upon the exports made by M/s. Padmini Polymers Ltd. and M/s. Harshita Ltd. It is his submission that there is error for the purpose of discarding the export value filed by the appellant M/s. Colourtex as they had always considered the invoice value/AR4 values mentioned on the documents on which the CD ROMs wee cleared by M/s. Padmini Polymers Ltd. It is his submission that there is no evidence adduced by the authorities of any contemporary export at a different price. It is his submission that DEPB credits for the FOB value declared by the appellants were given after obtaining no objection certificate from SUB who had endorsed the shipping bills. It is his submission that M/s. Colourtex was not related with M/s. Padmini Polymers Ltd. or the foreign buyers in any way and the impugned order is not speaking order as such as the same reiterates the allegations made in the show cause notice but does not take into consideration various submissions made by the appellants before the adjudicating authority and more specifically in respect of Circular No.69/97-Cus dated 08.12.97. He would rely upon the judgment of the Tribunal in the following cases: 1. Cannon Steel Pvt. Ltd. - 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the sales invoices recorded by them. It is his submission that this appellant had not any act of omission or commission for imposition of penalty on them. 6. Shri K.M. Mondal, learned special counsel for appeared on behalf of the Revenue. At the outset he would submit that M/s. Colourtex had purchased CD ROMs from M/s. Padmini Polymers Ltd. under the invoices and there was no submission before the lower authorities that M/s. Padmini Polymers Ltd. had prepared AR4s. It is his submission that during the relevant period the said CD ROMs were the goods which carried nil rate of duty which would mean that there cannot be any duty paying document. He would submit that numerous instances were cited in the show cause notice be in respect of imports and exports clearly established that M/s. Padmini Polymers Ltd. was engaged in manufacture of counterfeit CD ROMs and used to export such CD ROMs either directly or through merchant exports and such CD ROMs would not have fetched such exorbitant price of Rs.600/- to Rs.615/- per piece. It is his submission that the export price of M/s. Colourtex was not the genuine export price. He would submit that the show cause notice relies upon the evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey had only sold about 0.5% of the total production in the domestic market and hence it cannot be taken as respective domestic sale price. It is his submission that as regards the penalties imposed on M/s. Adani Exports Ltd., M/s. Padmini Polymers Ltd., it is clearly established that the amounts which have been paid to M/s. Padmini Polymers Ltd. had been transferred to M/s. Adani Exports Ltd. thereby establishing a clear linkage between M/s. Colourtex, M/s. Padmini Polymers Ltd. M/s. Adani Exports Ltd. and the role in the fraudulent exports is proved; as regards the penalty imposed on M/s. Padmini Polymers Ltd., evidences disclose that M/s. Padmini Polymers Ltd. was engaged in the manufacture of counterfeit and pirated CD ROMs which were exported directly by them and also through merchant exporters by overvaluing them. In view of the submissions made as above, the appeals filed by the appellants deserve to be rejected and prays accordingly. 7. We have considered the submissions made at length by both sides and perused the records. 8. The issue involved in this case is whether the main appellant M/s. Colourtex had overvalued the CD ROMs exported by them in order to claim inel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reinabove to come to a conclusion that there was an overvaluation of the CD ROMs exported by the appellant. We find that in the replies given to the adjudicating authority, the appellant has very clearly indicated in the reply dated 08.05.03 that M/s. Padmini Polymers Ltd. had made payment of central excise duty on the CD ROMs sold by them. It is also seen that the said reply, appellants are categorically stated that they had negotiated with the purchasers in Singapore for the sale of CD ROMs for Rs.764/- to Rs.770/- per piece. In the said reply, they had specifically pointed out that the difference between the purchase price and selling price was not major one and which was their business profit. This specific and categorical submission made by the appellant M/s. Colourtex is not disputed by the adjudicating authority. The adjudicating authority has only gone on the presumption that the appellant had not declared the-present market value on the shipping bills. We do not find any provision which requires the declaration to be made by them of the present market value on the shipping bills. In this regard, CBEC Circular No.69/97-Cus. dated 08.12.97 needs to be read which is as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods purchased from the open market, or from a Manufacturer, the PMV will accepted on the basis of Guidelines in paras (a) to (b) of para 3(1) ibid. (b) In case the PMV of the goods can not be determined as per the para above, the exporters may be required to furnish the sale invoice of the Authorised Dealer, or any other evidence to determine the correctness of the PMV declared by the exporters. In such cases evidence of local prices of similar goods may also be accepted as PMV. 5. In any case where PMV declared by the exporter can not be verified with reference to the para meters mentioned above, or is higher than 150% of AR4 value and Asstt. Commissioner is of the opinion that PMV declared is not acceptable, the exporter shall be given an opportunity to justify the correctness of the PMV declared by issue of a Show Cause Notice indicating the reasons for reducing the PMV. Before issue of Show Cause Notice concurrence of the concerned Deputy Commissioners must be obtained. 6. Verification of PMV / FOB value through market enquiries should be specifically assigned to the SUB and not the assessing officer. The enquiry must be completed and final view taken in 30 days. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of three years though after the investigation conducted by the office of the DRI. 11. The findings recorded by the adjudicating authority for coming to a conclusion it does not indicate that the appellants' case has been considered by him with reference to the submissions made by them at the time of personal hearings and the replies filed by them. The factual aspect of the purchase of CD ROMs from M/s. Padmini Polymers Ltd, at a price cannot be discarded by the Revenue simply for the reason that the said M/s. Padmini Polymers Ltd. had no domestic sale and even if there is any domestic sale, it was to the tune of just merely 0.5% of the total sales affected by them. It is undisputed that even the 0.5% of domestic sales which were affected by M/s. Padmini Polymers Ltd. were of the value which were the purchase price of M/s. Colourtex. If that be so, the quantum of local sale clearances cannot be determinative factor as to whether the purchase price of M/s. Colourtex of the CD ROMs is incorrect or otherwise. 12. Accordingly, in our considered view, the impugned order is unsustainable for all the appellants. Accordingly, the impugned order is set aside and the appeals are allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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