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2015 (8) TMI 1119 - SUPREME COURT

2015 (8) TMI 1119 - SUPREME COURT - 2015 (322) E.L.T. 812 (SC) - Goods mis-declared to avoid duty import of electronic components/parts - Commissioner in his order, which proved that what was, in fact, imported was complete sets of audio systems in dis-assembled conditions with a view to evade custom duties. - Tribunal decided the issue in favor of assessee Held that:- Very material aspect which is glossed over by Tribunal is that technicians who had inspected goods were able to assemble sys .....

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ur of Revenue. - Civil Appeal No. 1507 OF 2006 - Dated:- 7-8-2015 - A.K. Sikri and Rohinton Fali Nariman, JJ. For the Petitioner : Mr. Yashank Adhyaru, Sr. Adv., Mr. Rupesh Kumar, Adv., Ms. Shweta Garg, Adv., Mr. B. Krishna Prasad, Adv. For the Respondent : Mr. Abhay Anand Jha, Adv., Ms. Bina Gupta, Adv. ORDER A.K. SIKRI, J. Three consignments of imported goods landed at Mumbai Port. Bills of Entries for clearance of these consignments were filed by one M/s. Saidutt Clearing Agency Pvt. Ltd. (fo .....

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e customs authorities, it was observed that not only the supplier was same and the consignments came through the same vessel, they were also shipped on board on the same day, i.e., 20.07.2002. Even the Bills of Lading for the three consignments were also issued on the same day, i.e. 20.07.2002. The invoice raised by the suppliers in respect of all the three consignments were again issued on the same day, i.e. 22.07.2002. 2) It so happened that an intelligence was received by DRI, Mumbai Zonal Un .....

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consisting of parts of electronic components for Car Cassette Player and Audio with Radio of Kenwood, Sony, Pioneer, Philips and Thomson brands, were taken up for investigation. Prima facie, it appeared that complete sets of Audio Systems had been imported in the dis-assembled condition under the three Bills of Entries. 3) To verify this aspect, technicians were called from the office of Thomson India and Philips India and panchnama was drawn on 14.08.2002 at the DRI Office. The said technician .....

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/s. ME, and Shri Sohanbhai Soni, Proprietor of M/s. SM were also recorded on 17.10.2002. On the same day, i.e., 17.10.2002, statement of respondent no. 1, Shri Pundrick Ravindra Trivedi, was also recorded wherein he had admitted that he was the actual owner of the said firms and that he had paid Shri Patel and Shri Soni a sum of 4,000 to 5,000 per month for operating the said firms in their names. He stated that Shri Patel and Shri Soni had no role in the import activities of the firms and that .....

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d by the Assistant Commissioner of Customs, Appraising Group VB, Mumbai, to the respondent no. 1 to 3 as well as ME and SM. It was stated in the show cause notice, inter alia, that the goods imported in SKD condition were nothing but complete units (2189 pcs.) of Car Cassette Players and Five-in-One Music Systems which were functional and all the parts had been imported, including screws; that the goods imported vide the three Bills of Entries were not parts/components of Electronic Goods, but w .....

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d as the goods were supplied by same supplier, the invoices were numbered serially and were raised on the same day; that the goods were shipped on the same day in the same vessel; that the three Bills of Entries were filed on the same day by the same clearing agent; that the declared address of the owners of both M/s. Saumya Marketing and M/s. Mega Enterprises was identical; that the facts of the invoices clearly showed that the gods were nothing but complete functional items split up under thre .....

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ot classified under 8527.21 of the Tariff and CVD be not charged on MRP basis in terms of Notification No. 13/2002 CS(NT) dated 01.03.2002 or on ad valorem basis, whichever is higher. (iii) value declared be not rejected under Rule 10A of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1 988 and re-determined under Rule 8 ibid as 89,09,602. (iv) Differential duty amount of 37,95,206/- be not recovered on the re-determined value. (v) the said goods, imported in disassemble .....

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, Appraising Group VB, Mumbai, issued corrigendum dated 17.02.2004 in partial modification to the Show Cause Notice dated 09.02.2004. In the said corrigendum, it was stated that the duty difference amount mentioned in para 17(iv) of the Show Cause Notice to be read as 43,22,319/- as per revised work-sheet. 7) Replies were filed by the respondents and also by SM and ME to the show cause notices as well as to the corrigendum. Thereafter, oral hearing was afforded by the Commissioner of Customs, Ex .....

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f CVD on the basis of MRP in terms of Notification no. 12/2002-CE(NT) dated 01.03.2002. The learned Commissioner also ordered to enhance the value of the impugned consignments to ₹ 89,09,602/- in terms of Rule 8 of the Customs Valuation (Determination Price of Imported Goods) Rules, 1988 and ordered to recover an amount of ₹ 37,95,206/- towards differential duty from the importer and/or respondent No.1. The learned Commissioner had also imposed penalty of ₹ 5,00,000/- on respon .....

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avoid duty by mis-declaring their value. Therefore, the transaction value could not be accepted and the same was rejected. (c) The reasons cited in the show cause notice for redetermination of value of the goods in terms of Valuation Rules 8 were correct and legally tenable. (d) Since the importers mis-declared the goods in respect of description and value they contravened the provisions of Section 46 of the Act and, therefore, rendered the impugned goods liable for confiscation in terms of Sec .....

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.204 passed by the Commissioner of Customs (Import). These appeals were heard by CESTAT, which has, vide impugned order dated 18.03.2005, allowed the appeals and set aside the order passed by the Commissioner. The impugned order would reflect that while doing so, the Tribunal referred to its own earlier orders in certain cases including decision in the case of Sony India Ltd. Vs. CC, ICD, New Delhi1, on the basis of which following reasons have been recorded: "(i) Section 17 of the Act deal .....

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pheld." 10) It is how the present appeal came to be filed by the Revenue questioning the propriety of the decision rendered by the Tribunal. 11) The neat submission made by Mr. Adharyu, learned counsel for the Revenue, was that the Tribunal blindly applied the decision in the case of Sony India Ltd. (supra) with no regard to the facts of this case which 1 2002 (143) ELT 411 (Tri-LB) clinchingly show that the two firms which had purportedly imported the goods, namely, SM and ME, were bogus a .....

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t what was, in fact, imported was complete sets of audio systems in dis-assembled conditions with a view to evade custom duties. He submitted that all these aspects are not even considered and looked into by the Tribunal which renders the judgment of the Tribunal totally erroneous in law. 12) After considering the matter, we find full justification in the said submissions made by Mr. Adhyaru. We have already taken note of the evidence that emerged during the investing and also the statements of .....

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s that all the parts, down to the last screw, were imported to make complete sets. There was no rebuttal by the respondents to the aforesaid clinching evidence. On the contrary, there are clear admissions by Mr. Patel and Mr. Soni, the alleged sole proprietors of these two firms, as well as Mr. Trivedi in their statements recorded under Section 108 of the Customs Act. Mr. Patel and Mr. Soni stated that they are small time agents and it is Mr. Trivedi who had opened the said two import firms in t .....

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ed upon by Mr. Trivedi time and again for signing certain papers. 13) What is most important, which nails Mr. Trivedi, i.e., respondent no. 1, is his own statement. He has accepted the aforesaid arrangement as disclosed by Mr. Patel and Mr. Soni and admitted that it is he who was calling the shots and, in fact, was actual importer of the material in question which was imported in the name of two dummy firms. Not only he admitted that the complete functional units of car cassettes players and fiv .....

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in the case of Prasant Glass Works P. Ltd. Vs. Collector of Customs, Calcutta2 as under: "The proposition that the transaction value as shown in the invoice has some sanctity and the burden in on the department to collect evidence to show that the invoice value is not genuine or below ordinary ordinary price in international trade at the time and place of import cannot be applied to cases of import where description is substantially inadequate, incomplete description in cases where the goo .....

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f import, for which any reasonable and reliable method can be followed." 16) We find that the material produced by the Department which is discussed above clearly proves that instant is a case where substantially 2 1997 (89) ELT A 197 inadequate and wrong descriptions were given in the import documents which gave right to the Revenue to correctly assess the goods. The transaction value, as disclosed by the importers, was doubtful and was rightly rejected by the adjudicating authority. Furth .....

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gnoring these facts and allow the appeal by simply relying upon the case Sony India Ltd. (supra). 19) We may point out that the aforesaid decision of the Tribunal in Sony India Ltd. (supra) has been affirmed by this Court in Commissioner of Customs, New Delhi Vs. Sony India Limited3. However, the distinguishing feature can be discerned from paras 13 and 14, which we reproduce below: "13. Though, the learned ASG heavily relied on this case to draw a parallel with the present case, we are of .....

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