TMI Blog2016 (1) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... harma, AR PER : Archana Wadhwa All three appeals are being disposed of by a common order as they arise out of the same impugned order passed by lower authorities vide which the value of the mixed acid oils and mixed fatty acid imported by M/s. JMD Oils Pvt. Ltd. stands enhanced with consequential confirmation of demands of duty and penalties of varying amounts stand imposed upon all the appellants. 2. After hearing both sides for sometime, we find that M/s. JMD Oils Pvt. Ltd. imported three consignments of mixed acid oils and two consignments of mixed fatty acid and filed bills of entry by declaring the same as such including declaration of country of origin and the unit price of US$ 190 in respect of mixed acid oils and of US$ 210 and 205 in respect of mixed fatty acid. The samples were drawn from the said consignment and the goods were found to be palm stearin, palm fatty acid, palm stearin composed of triglysides of fatty acids (easters), RPO etc. The price declared by the appellant was enhanced by the assessing officer to US$ 336.25 in respect of mixed acid oils and to US$ 415.5 in respect of mixed fatty acid. The appellant accepted the said enhanced value and clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be out of place to mention that as per the submissions made by Shri Piyush Kumar, learned advocate the said order of the Tribunal stand accepted by the Revenue. Though he has not been able to show us any documentary evidence to reflect upon the fact of acceptance but submits that a caveat was filed before Hon'ble High Court and period of three months has already passed and they have not received any intimation from the Hon'ble High Court as regards filing of appeal by the Revenue. Not only that he also draws our attention to an order of Commissioner (Appeals) dated 4.11.10 wherein the original adjudicating authority, by relying upon the same very statement of two indenting agents namely Shri Rakesh Kumar and Shri Anil Kumar Arora has confirmed the demand, but appellate authority set aside the same by observing that there is no evidence of rejection of transaction value. The said order of the Commissioner (Appeals) also stand accepted by the Revenue inasmuch as there is no appeal before the Tribunal. 8. In view of the above, the impugned order is set aside and all three appeals are allowed with consequential relief to the appellant. (order pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alaysia; that the landed cost of PFAD in India was around USD 430 to 440 PMT; that on the request of Indian importers in India, he used to ask to the supplier in Malaysia to issue invoices in the range of USD 210 to 220 PMT for PFAD and USD 180 to 190 PMT for MFA; that they (supplier's) used to issue invoices for the consignments on these prices; that the PFAD and the mixed Fatty Acid which were being so declared by the importer, were one and the same thing; that he received USD 3 to USD 5 PMT as commission for the deals brokered by him. 13. Discrete enquiry was done in the case of the appellant by investigation as stated by ld. Adjudication Authority in Para 5 of his order respect of Bill of entry no. 540653 dated 09.10.2006, 541277 dated 10.10.2006, 540762 dated 09.10.2006, 563848 dated 12.01.2007 and 563904 dated 12.01.2007 where the goods imported were declared as Mixed Fatty Acid @ USD 190 to 210 PMT CIF Nhava Sheva as depicted in the said para. Containers covered by the B/Es were physically examined and samples drawn. When samples were sent to CRCL, result thereof went against appellant and such result has been vividly described by Id. Adjudicating authority in Para -6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) M/s JMD Oils Pvt. Ltd. used to enter into negotiation with its foreign suppliers to procure invoice showing wrong description of the goods and their lower value than the actual value and to pay suppressed part of actual value in advance through hawala. (iii) The above negotiations used to be communicated via e-mails/fax between the buyer and foreign supplier as was evident from the enquires with the Indian Indenters, namely, Sh. Rakesh Kumar and Sh. Anil Kumar Arora. Facts stated by them clearly indicated the modus operandi of procurement of manipulated documents including invoices, (iv) In spite of the facts that M/s JMD Oils Pvt. Ltd. did not have facility to use Palm Stearin in accordance with the conditions as set out in Public Notice No. 14/97-02 dated 06.06.1997 issued under the Export Import Policy including the one that import of Palm stearin is allowed subject to actual user condition and the importer must have facilities to convert Crude Palm Stearin into fatty acids and glycerol), it fraudulently imported the Palm Stearin knowing fully well about the condition and that too without an approval or authorization from the Secretariat of Industrial Approva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 325.63 MT goods imported by M/s JMD Oils Pvt. Ltd. under the said 5 Bs/E, 61.11% (199 MT) were Palm Steain , 25.93% (84.44 MT) were Fatty Acid, 11.11% (36.18 MT) were Palm Stearin composed of Triglycerides (Esters) and 1.85% (6.02 MT) were Refined Palm Oil and that all these goods wee imported mis-declaring the same as MFA knowingly and with fraudulent intention to evade customs (ix) Test reports confirmed that M/s JMD Oils Pvt. Ltd. imported Palm Stearin under bills of entry Nos. 540653 dated 09.10.2006, 541277 dated 10.10.2006, 540762 dated 09.10.2006, 563848 dated 12.01.2007 and 563904 dated 12.01.2007 540661 dated 09.10.2006 and 542500 dated 13.10.2006 which was restricted for import and could not be imported without industrial license or an approval or authorization from the Secretariat of Industrial Approvals of the Department of Industries development, Govt of India or DGTD registration for manufacture of Fatty Acid or registration with Directorate of Vanaspati, Vegetables Oils and fats. M/s JMD Oils Pvt. Ltd. also had no such license or the facility to split Crude Palm Stearin into Fatty acids and glycerol (x) Sh. Gulshan Kumar, authorized representative of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Shri Gulshan Kumar (authorized representative of the company) also confirmed the same. The actual transaction value of the goods, i.e. Palm Stearin ana Palm Fatty Acid Palm Fatty Acid Distillate covered by bills of entry Nos. 540653 dated 09.10.2006, 541277 dated 10.10.2006, 540762 dated 09.10.2006, 563848 dated 12.01.2007 and 563904 dated 12.01.2007 is correctly determinable @ USD 420 PMT, as per the law. (xiv) Shri Gulshan Kumar, authorized representative of the company and his two brothers Shri Kishan Kumar and Shri Naresh Kumar, both the Directors of M/s JMD Oils Pvt. Ltd. indulged in fraudulent import of the impugned goods and trading thereof. Investigations clearly indicated that Sh. Gulshan Kumar looked after the import of Mixed Fatty Acid, managed its documentation wit the Bank, CHS and Customs and negotiated the prices and quality with the foreign supplier in respect of the imported goods; imported Palm Stearin, Palm Fatty Acid and Palm Fatty Acid Distillate by mis-declaring their description and value to evade customs duty and that he had complete knowledge of price and description of the imported goods which he attempted to clear from Customs by mis-declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Report C. No. Date FFA (as oleic Acid /Palmitic Acid) Melting Point Gist of Report 06 A 35CRCL/2006/CL-5406 SIIB dt. 12.03.2007 70.9% by wt as PA 76.5% by wt as OA 44/C The sample is having characteristics of Fatty acid whether it is edible or not is not clear as it is having such a high FFA 06 B 35CRCL/2006/CL-54Q7 SIIB dt. 14.02.2007 0.31% by wt as OA 02.8% by wt as PA 54/ C The sample appears to Palm Stearin. 06 C 35CRCL/2006/CL-5408 SIIB dt. 14.02.2007 1.5% by wt as P.A 1.71% by wt as OA, 54/C The sample appears to Palm Stearin. 4. Container No. IALU 2271425 Sample No. Report C. No. Date FFA (as oleic Acid / Palmitic Acid) Melting Point Gist of Report 07 A 35CRCL/2006/CL-5403 SIIB dt. 20.02.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Report C. No. Date FFA (as oleic Acid / Palmitic Acid) Melting Point Gist of Report 10 A 35CRCU2006/CL-5730 SIIB dt. 12.01.2007 The sample appears to be Palm Stearin. 10 B 35CRCU20G6/CL-5731 SIIB dt. 12.01.2007 0.07% as P.A. 53/C The sample appears to be Palm Stearin. 10 C 35CRCU2006/CL-5732 SIIB dt 12.01.2007 0.06% as P.A 53/C The sample appears to be Palm Stearin. 2. Container No. IALU 2268822 Sample No. Report C. No. Date FFA (as oleic Acid / Palmitic Acid) Melting Point Gist of Report 13 A 35CRCL/2006/CL-5739 SIB dt 08.02.07 0.05% by weight as P.A. 54/ C The sample appears to be Palm Stearin 13 B 35CRCL/2006/CL-5740 SIB dt 08.02.07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The sample appears to be Palm Stearin composed of Triglycerides of Fatty Acid (Esters) 49 B 35CRCL/2006/CL-6213 SIIB dt. 26.01.2007 91.6% as P.A. 100.9% as O.A. Not Mentioned The sample is having characteristics of Fatty Acid, whether it is edible or not is not clear as it is having such a high FFA. 49 C 35CRCL/2006/CL-6214 SIIB dt. 26.11.2007 0.399% as P.A. Not Mentioned The sample appears to be Palm Stearin compsed of Triglycerides of Fatty Acid (Esters) 2. Container No. ZIMU 2479777 Sample No. Report C. No. Date FFA (as oleic Acid / Pa(miticAcid) Melting Point Gist of Report 50 A 35CRCL/2006/CL-6230 SIIB dt. 05.07.2007 0.09% by weight as P.A. 53/C The sample appears to be Palm Stearin 50 B 35CRCL/2006/CL-6231 SIIB dt. 27.07.2007 86.99% as P.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Container No. CAXU 6174908 Sample No. Report C. No. Date FFA (as oleic Acid / Pa(miticAcid) Melting Point Gist of Report 45 A 35 CUS./07/CL 6218 SIIB dt. 26.11.2007 0.62% by weight as P.A. Not Mentioned The sample appears to be Palm Stearin composed of Triglycerides of Fatty Acid (Esters) 45 B 35 CUS./07/CL 6219 SIIB dt. 26.11.2007 0.41% as P.A. Not Mentioned The sample appears to be Palm Stearin composed of Triglycerides of Fatty Acid (Esters) 45 C 35 CUS./07/CL 6220 SIIB dt. 04.07.2007 76.67% as P.A. 52/C The sample is having characteristics of Fatty Acid, whether it is edible or not is not clear as it is having such a high FFA. 3. Container No. CAUX 6594372 Sample No. Report C. No. Date FFA (as oleic Acid / Pa(miticAcid) Mel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 C 35 CUS./06/CL 6223 SIIB dt. 11.06.2007 53.732% as P.A. Not Mentioned The sample is having characteristics of Fatty Acid, whether it is edible or not is not clear as it is having such a high FFA. 16. An important fact in the present case to be noted is that Palm stearin imported by the appellant was not freely importable without appropriate licence/permission. Import of such goods is regulated under law and specific permission of Ministry/DGFD is required in terms of Public Noticee No. 14/97-02, Dated 06.6.1997. M/s JMD has no license to import crude Palm Stearin or facility to split the same into fatty Acids and glycerols, Such material fact clearly established deliberate mis-declaration and Revenue was defrauded. Such material fact and aforesaid investigation results have not been looked into by Learned Judicial Member for arriving at conclusion. 17. Above findings in adjudication unerringly establish fraudulent intent of the importers making mis-declaration as to description of goods as well as value thereof. Statement of Shri Gulshan Kumar authorized representative of M/s JMD Oils Pvt. Ltd Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Gulshan Kumar, authorized representative of M/s JMD Oils Pvt. Ltd., Delhi had finalized the contract of purchase, approved the quality and prices of the said goods so imported by his company M/s JMD Oils Pvt. Ltd. which confirmed that he was aware of the true character and description of the goods. He had admitted that his company M/s JMD Oils Pvt. Ltd., Delhi imported and traded Palm Fatty Acid Distillate, Palm Stearin and Palm Fatty Acid by mis-declaring them as Mixed Fatty Acid, It is evident that it was he who negotiated and contracted the description and value of the imported goods, i.e. Palm Fatty Acid Distillate, Palm Fatty Acid and Palm Stearin in the range of USD 400 PMT to US$ 450 PMT (CIF) and that on his direction his foreign supplier issued the invoices for value which was about 40% to 50% less than the actual value of the so imported goods. He also submitted the invoices of less value to customs for clearance of goods imported by him with willful intent to evade customs duty. Facts above confirmed that he had full knowledge of the actual prices and description of the goods but he illegally imported the said goods by way of mis-declaration of their correct de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was indulged in such activities and evasion of customs duty detected by investigation. Learned Adjudicating Authority recorded material facts which demonstrated deliberate and well designed mis-declaration of the imports. 21. Examination made by commissioner in the present case shows his application of mind and testing of evidence minutely vis-a-vis intelligence, evidence on record, statement recorded, result of test reports and under valuation as well as violation of import regulation/guidelines. He has rightly held violations of Section 14 of Customs Act, Section 111(d) and (m) of Customs Act, 1962. Section 28 read with Section 28A of Customs Act, 1962 were rightly invoked to levy duty and penalties under Section 114 A and 112 of Customs Act 1962. I am thoroughly convinced with cogent evidence of Revenue and findings of Id. Adjudicating Authority and concur with the result of adjudication without agreeing with the decision recorded by Id. Judicial Member. 22. In view of my observations I find that facts and circumstances of M/s H.K. International! are not at all similar to the present case and accordingly present appeal is bound to be dismissed. 23. When there was delibe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the decision of this Tribunal in the case of H K International is to be followed. He further submits that Hon'ble Member (Technical) has fell in error as there is no allegation or any evidence that the appellant has paid any amount over and above the declared invoice value to the overseas supplier and even in the statement of appellants' representative, it has been stated that when they have not imported a consignment at higher value over above the invoice price. The Hon'ble Member (Technical) further fell in error to record, on the basis of statement of Shri Gulshan Arora that the appellant has admitted under invoicing. In fact, in his statement he has admitted that similar goods are being under invoiced by co-Noticee but the appellant has paid the duty on determined value at the rate of 420 $ PMT only to avoid incurring demurrage, detention and other incidental costs. He further submits that Hon'ble Member (Technical) failed to appreciate that in the case of H K International (supra) also the proprietor of imported firm has admitted to pay the duty at calculated value of ₹ 420 MPT and admitted that the landed cost of mixed fatty acid was on much higher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sh. Naresh Kumar and authorized representative Shri Gulshan Kumar have mis-declared the description and value of the imported goods. In support of these allegations, following evidences have been relied upon: (a) There was general intelligence that the importers of 'PFAD' and Palm Acid Oil' were mius-declaring the description and value of the imported goods and were evading payment of custom duty. (b) Shri Rakesh Kumar, an indenting agent for Palm Fatty Acid Distillate for various importers in India and several Malaysian firms, in his voluntary statement dated 03.11.2006, inter-alia, stated that the prevailing prices of PFAD (Palm Fatty Acid Distillate) was around USS 340 PMT in Malaysia; that the landed cost of PFAD in India was around US S 440 PMT which included USS 340 MPT for the goods, US$ 50 PMT for drumming and USS 50 PMT as freight charges; that the local importers and traders asked him to arrange the invoices at price in the range of USS 180 PMT for mixed acid oil and USS 210 PMT for PFAD; that accordingly, he contacted the suppliers in Malaysia to issue invoices in the range of US S 210; and that the suppliers agreed on invoicing those goods at tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board of Directors of M/s. JMD Oils Pvt. Ltd, to tender the statement and represent the case; that he had the full knowledge of purchase/ sale of the goods in the company; that besides him, his two younger brothers namely Sh. Kishan Kumar and Shri Naresh Kumar are also Directors in the company; that their company was dealing in Edible and Non-Edible Oils and they started the business of Mixed Fatty OH after the month of March, 2006; that the value of the subject goods in the market was USD 340 PMT one the minimum side and therefore, he realized that the declared value of USD 190 PMT was on extremely lower side; that he was ready to accept all conditions and value imposed for the provisional clearance of the subject goods; that though they have declared the subject goods as Mixed Fatty Acid, Mixed Acid Oil, however, they would obey the reports of the CRCL as and when they are received; that their company was engaged in the manufacture of edible oils like soya been oil, palm oil, mustered oil, ground nut oil under different brand names; that they did not manufacture any Vanaspati ghee for last 9 months in their factory; that they were importing Palm OH and Soya Been oil in their fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of H K International (supra) wherein para 5 of the said order is relevant which records the evidence to allege under-valuation. Same is reproduced herein as under: 5. After going through the order of the Commissioner we find that he has basically relied upon the following evidences. (a) There was general intelligence that the importers of 'PFAD' and 'Palm Acid OH' were mis-declaring the description and value of the imported goods and were evading payment of custom duty. (b) Shri Rakesh Kumar, an indenting agent for Palm Fatty Acid Distillate for various importers in India and several Malaysian firms, in his voluntary statement dated 3-11-2006, inter alia, stated that the prices of PFAD (Palm Fatty Acid Distillate) was around US$ 340 PMT in the Malaysia; that the landed cost of PFAD in India was around US$ 440 PMT which included USS 340 PMT for the goods, US$ 50 PMT for drumming and US$ 50 PMT as freight charges; that the local importers and traders asked him to arrange the invoices at price in the range of US$ 180 PMT for mixed acid oil and US$ 210 PMT for PFAD; that accordingly, he contacted the suppliers in Malaysia to issue invoices in the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against bill of entry No. 540998 dt. 10-10-06; that the landing cost of Mixed Fatty Acid was on much higher side and that it would be about US$ 420 PMT; that market value of their product i.e. Mixed Fatty Acid was enhanced and he accepted voluntarily to pay the duty at enhanced assessed value @US$ 420 PMT. 32. I have seen that the allegations made against the appellants from (a) to (f) in para 30 31 herein above are identical apart from the allegation (g) in para 29.3 of the impugned order against the appellants is that Shri Gulshan Arora stated that these materials was of fine quality of mixed fatty acid and mixed acid oil and its value in international market was around 425 USD PMT and they were unaware about the restrictions of import of crude palm stearin imposed by Government of India that he did not know any process by which the subject goods can be used in vanaspati ghee because the melting point is 41.5 C and whereas the melting point of the subject goods was 50 60 C and it cannot be reduced further any method. He further submits that besides melting point, the soap value, acid value and iodine value are also different of the subject goods as compared to that of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is difficult to uphold the contention of the Revenue. 9. The Tribunal in the case of Jindal Strips Ltd. v. CC, New Delhi reported in 2001 (133) E.L.T. 570 (Tri.-Del.) has held that the transaction value has to be accepted as the correct assessable value unless there is an evidence to the contrary. It was also observed that the London Metal Exchange Bulletin prices cannot be accepted as basis of valuation in the absence of corroborative evidence of contemporaneous imports. The said decision stands approved by the Hon'ble Supreme Court, when the appeal filed by the Revenue thereagainst was rejected, as reported in 2003 (156) E.L.T. A385. Similarly in the case of Pawan Goel v. CC, New Delhi reported in 2001 (135) E.L.T. 1425 (Tri.-Del.), it was held that theoretical price based on LME bulletin cannot be made basis without corroborative evidence. We find that the legal position is well-settled and we do not find any need to multiply the precedent decisions. 35. Therefore, relying upon decision of H K International (supra), I am of the view that Hon'ble Member (Judicial) has taken the correct view in deciding the issue holding that as there is no contrary decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
