TMI Blog2014 (8) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... f the premises of M/s Laxmi Trading Co., Amritsar. The search of the office premises of the above firm, residential premises of Shri Arun Kapoor, Shri Om Prakash Kapoor and Mrs. Madhu Kapoor were undertaken and incriminating documents were recovered. The statements of the above persons were also recorded. In addition, search was also conducted in the premises of other importers of the above goods by the DRI and incriminating documents recovered. The investigation revealed that M/s Laxmi Trading Co., Amritsar is a proprietary firm of Mrs. Madhu Kapoor and day-to-day operations of the said firm were undertaken by Shri Arun Kapoor, husband of Mrs. Madhu Kapoor. It was further revealed that the appellant firm had submitted forged/fabricated documents to the Customs resulting in evasion of customs duty. (ii) In her statements on 4.11.2008, Mrs. Madhu Kapoor informed the DRI that her husband Mr. Arun Kapoor was looking after day-to-day operations and he was solely responsible for the operation of the said firm. Shri Om Prakash Kapoor, in his statements dated 7.12.2006, confirmed that his son Shri Arun Kapoor was engaged in import of poppy seeds from Turkey in the name of M/s Laxmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign suppliers, insurance documents etc. which showed undervaluation. From these documents, it emerged that the minimum and maximum price of while poppy seeds from Turkey were as follows:- Period Country of exportation Minimum value of poppy seeds USD/MT Maximum value of poppy seeds USD/MT July - Sept, 03 Turkey 975 1395 Oct - Dec,03 -do- 1500 1500 Jan - Mar, 04 -do- 1610 1665 Apr - June, 04 -do- 1460 1610 Oct - Dec, 04 -do- 1830 2080 July - Sept,05 -do- 2960 2960 Oct - Dec,05 -do- 3054 3054 July - Sept, 06 -do- 1750 1750 (v) The Public Ledger, a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be relied upon for enhancement of value as they cannot be taken as contemporaneous prices. The price mentioned in the Public Ledger is a mere quotation and cannot be accepted as contemporaneous price for enhancement of value as held by this Tribunal in the case of Radha V. Co. Vs. Commissioner of Customs, Mumbai - 2003 (156) ELT 810 (T) and Dhirish International Vs. Commissioner of Customs, Bangalore - 2005 (187) ELT 94 (Tri-Bang). Therefore, enhancement of value on the basis of price quotation in the Public Ledger is incorrect in law. (iv) It was further contended that import of poppy seeds are on the basis of permits given by the Central Bureau of Narcotics, Gwalior and for obtaining this permission, the details of the contract entered into with the foreign supplier has to be furnished and the appellant had accordingly furnished details of contracts entered into with the foreign supplier and based on such contracts, the appellant was granted permission to import poppy seeds. Since the appellant had entered into long-term contracts, the price as on the date of contract is the relevant price and not that prevailing on the date of import. Reliance is placed on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 and also made part payment towards differential duty. The retraction purported to have been made on 9.12.2006 is only an afterthought and has not been made before the authority, who has recorded the statement. Such retraction is not valid in law. It is also reported that the said retraction has not been received by the investigating agency. 4.1 The learned Addl. Commissioner further submits that for the quarter July - Sept, 2004, the contemporaneous price of USD 1460 has been taken for determining the duty liability. During the search of premises of importers of the white poppy seeds, several invoices showing values ranging from USD 1460 to USD 1610 were recovered and out of these invoices, the lowest value of USD 1460 has been taken. The invoice showing the said lowest value of USD 1460 is invoice No. 7418 dated 20.7.2004 issued by M/s Zimra of Turkey to M/s Motilal, Khari Baoli, Delhi, which is one of the relied upon documents. Similarly, for the other quarter also the value has been taken from the contemporaneous imports made by other importers. Only for the last two quarters i.e. April - June, 2006 and July - Sept, 2006, the data given in Public Ledger has been taken. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awala transactions. These details were known only to Shri Arun Kapoor, which he had admitted before the investigating officer. The subsequent retraction made by him on 9.12.2006 is only a bald retraction without specifying which part of the statement he was retracting. Secondly, the retraction letter was addressed to the Additional Director, DRI, Delhi and not to the officer who had recorded the statements. In view of the above, it appears that the retraction made by him is only an afterthought and, therefore, cannot be prima facie accepted. 5.3 In K.I. Pavunny Vs. Asstt. Collector (HQ), C.Ex. Collectorate, Cochin - 1997 (90) ELT 241 (SC), the Hon'ble Apex Court held that the confessional statement of the accused, if found to be voluntary, can form the sole basis for conviction. If retracted, court is required to examine whether it was obtained by threat, duress or promise and whether the confession is truthful. If the statement made can be corroborated by other evidence of general nature, then also the retraction can be rejected. In the present case, we find that the undervaluation admitted by Shri Arun Kapoor is corroborated by the other documentary evidences available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by the Hon'ble Apex Court in the case of Ispat Industries Ltd. (supra). Since the period of import in the present case is prior to 2007, the above position in law would apply and not the transaction value concept. An identical view was taken by the Apex Court in the case of Rajakumar Knitting Mills (supra), where it was held that anything receivable between the buyer and the supplier through the contract is not relevant. Therefore, the contract entered into much prior to the date of importation is not valid. 5.6 As regards the reliance placed on the prices quoted in Public Ledger, this has been done only for a part of the period from April to Sept, 2006. In Varsha Plastics Pvt. Ltd. (supra), the Hon'ble Apex Court held that the availability of evidence of contemporaneous import of the same goods obviously provides the best guide for determination of value of the import of goods but in the absence of evidence of contemporaneous imports, reference to foreign journal for finding out correct international price of imported goods may not be irrelevant because ultimately the assessing authority has to determine value of the goods, at which such goods are sold or offered fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces are lower when the product/crops are still in the field. The prices start rising from the time of harvest and go on rising till the next crop comes to market. Further the purchase contracts were registered with the Central Bureau of Narcotics. Another material fact is that the invoices contained the details or reference to the purchase contracts. 11. That so far prices quoted in Public Ledger' and COMTRADE is concerned, out Bench in the similar case of Arushi Exports others vide order No. S/705-709/13/CSTB/C-I dated 22.04.2013 have taken the view that - Prices reported in journals/magazines and adoption of the same for the purpose of valuation is not one of the prescribed methods under Rules 5 to 9 of the C.V. Rules and therefore they cannot be adopted or resorted to . So far the ruling of Hon'ble Apex Court in the case of Varsha Plastics Pvt. Ltd.(supra) is concerned, the facts in that case were the assessee had been found to have mis-declared the description, quality and value of the goods in the Bill of Entry. Further the assessee had admitted mis-declaration and waived show-cause notice. Such are not the facts obtaining in the present case. Further the quotat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. It is relevant to take notice of Section 138B (1) (2) of the Customs Act. It provides that the statement and signed by a person before any gazetted officer of Customs during the course of any proceeding under the Act shall be relevant, for the purpose of proving, in any proceedings or prosecution under this Act the truth of the facts as they apply in relation to proceedings before a court. When the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence, in the interest of justice. From the impugned order it appears, Mr.Arun Kapoor was not examined as a witness in the proceedings. Thus, the statement is not reliable, for failure to examine Mr. Kapoor as a witness. 16. Thus in the facts and circumstances I find that there is a strong prima facia case in favour of the appellants. The offer to pre-deposit another ₹ 15 lakhs in addition to payment already made, is fair for the purpose of stay. Thus, the appellants M/s Laxmi Trading Co. is directed to pre-deposit ₹ 15 lakhs within four weeks and report compliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld by the Hon'ble Member (Technical) relying on the decisions of the Hon'ble High Court of Allahabad in the case of Zaki Ishrati Vs. Commissioner of Customs Central Excise, Kanpur - 2013 (291) ELT 161 (All) and of the, Hon'ble Apex Court in the case of K.I. Pavunny Vs. Asstt. Collector (HQ), C.Ex. Collectorate, Cochin - 1998 (90) ELT 241 (SC). Or The statement of Shri Arun Kapoor cannot be relied on as held by the Hon'ble Member (Judicial) inasmuch as the same has been retracted. (ii) Whether the contract-price mentioned in the contract entered into by the appellant with the foreign supplier much before the actual imports is not relevant and the price of the contemporaneous imports have to be adopted for assessment purposes as held by the learned Member (Technical) relying on the decision of the Hon'ble Apex Court in the case of Ispat Industries Ltd. - Commissioner of Customs, Mumbai - 2006 (202) ELT 561 (SC) and Rajkumar Knitting Mills (P) Ltd. Vs. Commissioner of Customs, Bombay - 1998 (98) ELT 292 (SC). OR The contract value is relevant for determination of value as held by the learned Member (Judicial) (iii) IN the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o is the superior authority of the person who has recorded his statement. He would submit that the reliance placed upon the various case laws are not material to the issue in any way and submits that in those cases Affidavits and retractions were made belatedly. He would submit that the learned Member (Technical) has held that the contemporaneous imports were of high value. He would take me through the various documents annexed to the appeal memorandum and submit that the reliance placed on the invoice of one of the supplier is not correct inasmuch as the said invoice, which has been relied upon is procured by the DRI from their own sources and does not bear any stamp or signature of any person. He would also submit that the contemporaneous import which the DRI is relying upon is incorrect inasmuch as the said documents have come from a third party and that form the appellant's premises nothing incriminating was found. He would also submit that the Revenue has not adduced corroborative evidence as to the additional repatriation of value by the appellant to overseas suppliers. At this juncture, he would draw my attention that overseas suppliers invoices in the name of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct needs to be followed if reliance is to be placed on the statement. 4. The learned Addl. Commissioner (AR) would, in the reply, draw my attention to the paragraph 8 of the Order-in-Original. After reading the said paragraph, he would submit that the contract which were registered by the appellant with Central Board of Narcotics is statutory requirement and it is his submission that the contract had clause, which clearly indicated that the registration of contract does not mean that the value as per the Customs Act should be given a go back and the valuation needs to be done only according to the Customs Act and Valuation Rules made thereunder. Subsequently, he would read the statement of Shri Arun Kumar from the show-cause notice and submit that there was a categorical admission as to the undervaluation of the goods and repatriation of the amount through Hawala. He would submit that statement which is given by Shri Arun Kapoor is in his own handwriting and is a voluntary statement. He would also submit that voluntary nature of statement can be ascertained from the fact that the appellant had deposited an amount of ₹ 16.5 lakhs. He would submit that judgment of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in has prima facie strong case or not. In my view, the order of Hon'ble M(J) seems to be correct in the facts and circumstances, for more than one reason, which are:- (i) I find that the reliance placed by the adjudicating authority on the price quoted in the Public Ledger and COMTRADE seems to be incorrect inasmuch as though there is a statement of Shri. Arun Kapoor that differential amount has been remitted through Hawala, there is no concrete evidence, which is brought on record to show that extra amount has been remitted to the seller. I find that the investigating authorities have not recorded any statement of any individual who had been a conduit through whom the Hawala transaction took placed. (ii) Secondly, I agree with the view of the learned Member (Judicial) as regards the retraction that there is letter annexed at page No. 183 of the appeal memorandum vide which Sri Arun Kapoor had sent retraction letter addressed to the Addl. Director General of DRI. The said letter is reproduced below: Dated 9th December, 2006 To The Additional Director General DRI, Zonal Office, New Delhi Sub: Retraction of statement ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen appellant was released from office of the DRI. Only on this ground that retraction was not filed before the officer who recorded the statement and to hold that the said retraction is incorrect, would be, least to say is travesty. In my view, the said letter of Shri Arun Kapoor is a retraction which is addressed to the authorities concerned. Further, I find that subsequently in 2008, a statement was recorded on 8.2.2008, wherein he had categorically denied the allegation of undervaluation of imported consignment. Surprisingly, in the said statement dated 8.2.2008, the investigation authority has not recorded anything about the Hawala transaction having taken place between the supplier and buyer of the goods. In my considered view statement recorded on 7 8.2.2006 has been retracted and the subsequent statement does not indicate any undervaluation which would lead to a prima facie conclusion that there is no statement which is incriminating. (iii) Thirdly, besides the said statement, I find that there is no much corroborative evidence, which has been recovered from the appellant's premises so as to indicate that there was an undervaluation. The invoice and the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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