9911796707
TMI Blog1983 (11) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... both with regard to the charge of under valuation of the goods as well as for the confiscation of the goods for violation of ITC Regulations. 3. Taking the valuation aspect first, Shri Nankani briefly explained the facts of the case. The appellants imported 83 cartons of Audio/Video Tapes (National Model) of two types, namely, 480 pieces of National Model E-120 and 4500 pieces of National Model E-180. CIF value for the consignment was given in the bill of entry as US $ 57,675/-. The value per piece declared by the importers in the bill of entry and the appraised value thereof by the Custom House is as indicated below :- Video Tape Model pieces No. of Value declared by the appellants (per piece) Value appraised by the Custom House per piece E-120 480 US $ 10.0 US $ 12.5 E-180 4500 US $ 11.75 US $ 15.0 The order for the goods in question was placed by the appellants on M/s. Jutex Industries Corporation, Hong Kong who got the same shipped from Japan. For enhancing the value of Video Tapes E-180 to US $ 15.0, the Custom authorities relied on Invoice No. 5040/81, dated 25-6-1981 issued by M/s. Esquire (Electronics) Ltd., Hong Kong to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sunder Rajan earlier that the had received reliable information from his Collector that the prices of the goods in question had not come down but were stable at the relevant time, Shri Nankani submitted that this was a very vague assertion and did not in any way affect the imports of the appellants' goods. Shri Nankani also tried to prove the bona fide character of the appellants, transactions with reference to quotations exchanged between M/s. Anita International, Osaka (Japan) and M/s. Jutex Industries Corporation of Hong Kong, the latter being the supplier of the goods to the appellants. It was pointed out that M/s. Anita International had supplied E-120 Tapes to M/s. Jutex at US $ 9.55 per piece and E-180 Tapes at US $ 11.21 per piece. In other words, M/s. Jutex made a gain of 45 cents per piece and 54 cents per piece, approximately, with regard to E-120 and L-180 Tapes respectively, from M/s. Anita International of Japan. This represented a margin of profit of just 5% between the Hong Kong supplier and the Japanese supplier. Shri Nankani submitted that he had put forth this argument to show that in the chain of transactions, nothing abnormal had happened and the whole transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tapes in the last three months. This has been partly due to the weakness of Yen and partly due to the glut in the production of these cassette tapes in Japan". Shri Sunder Rajan submitted that the telexes enclosed with the letter of Shri Pande showed higher values for the goods imported by the appellants. Further, Shri Sunder Rajan submitted that fall in the prices of video cassette tapes had taken place much later, a fact which had been controverted by the appellants. Shri Sunder Rajan, also introduced for the first time the argument that the appellants had opened their Letter of Credit for the goods in question in March, 1981, and the Department had replied on an invoice dated 25-6-1981. There was, therefore, a nexus between these two dates which, according to Shri Sunder Rajan, supported the stand taken by the Custom House. Shri Sunder Rajan concluded by submitting that proving a case of under valuation was an uphill task but the Custom House had been able to make out a sound case of under valuation against the appellants with reference to documentary evidence which could not be brushed aside lightly. 7. We have heard both the parties at great length. We agree with the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... telex messages have not been correlated with any actual importations made into India at prices mentioned in these messages. Taking the documentary evidence as a whole, we are of the view that the Department has been unable to satisfy us that the appellants resorted to under valuation. While we are inclined to agree with Shri Sunder Rajan that proving a case of under valuation is difficult, we have to go by the evidence and the same produced by the Department is not sufficient to pin down a serious charge like under valuation raised against the appellants. 8. Before parting with discussion of valuation aspect, we would like to make a reference to Shri Sunder Rajan's argument that the appellants had opened their Letter of Credit on 30-3-1981. Shri Sunder Rajan had also contended that prices at that point of time were much higher than those declared in the bill of entry for the goods. We observe that the relevance of the date of opening of the letter of credit in this context was not raised before the lower authorities. We are, therefore, unable to attach any importance to the date of the opening of the letter of credit in the context of the present proceedings. 9. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] "Any material in its natural form suitable for being manufactured or process into a finished form." [New Webster's Dictionary of the English Language] It is quite clear from the definition of the expression `raw material' quoted from the standard books that to be treated as a `raw material', the material or commodity should be in its natural or semi-manufactured state and should be capable of being used for manufacture of finished products. It also follows that `raw material' cannot be consumed directly and cannot be sold off the shelf by a store or a shop and consumed directly by the purchaser. As regards the expression `consumer goods', the New Webster's Dictionary of the English Language defines it as follows : "Goods, such as clothing and food, which are made for the consumer and are not intended to be used in further production." From the above definitions of the expressions `raw material' and `consumer goods' it is clear that the contention of the appellants to treat the blank cassette tapes as raw material is not at all tenable. For all practical purposes these are finished products, can be sold off the shelf of a shop for consumers who wish to tape any visuals eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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