TMI Blog2012 (3) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,77,529.34 2. M/s. Bajranglal Vijay Kumar, Kolkata Applicant, Importer, Proprietorship firm 16,51,308.21 5,46,308.81 3. M/s. Opel Trade Corporation, Kolkata Applicant, Importer, Proprietorship firm 9,54,150.43 Nil 4. Sh. Vijay Kumar Gupta Co-applicant, Director of . M/s. AVI Trexim Pvt. Ltd., Kolkata and Proprietor of M/s. Bajranglal Vijay Kumar, Kolkata 5. Sh. Sachin Gupta Co-applicant, Individual. Son of Sh. Vijay Kumar Gupta, Director of M/s. AVI Trexim Pvt. Ltd. He also signed several docu ments and cheques in respect of import of cranes. 6. Sh. Karan Gupta Co-applicant, Individual, Nephew of Sh. Vijay Kumar Gupta, Responsible for maintai ning records of imports made by M/s. AVI Trexim Pvt. Ltd., Kolkata and M/s. Bajranglal Vijay Kumar, Kolkata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Commerce, Chief Foreign Trade Division, United States. 2.2 The applicants herein managed to get invoices prepared by working out the value of the said cranes at the rate of Rs. 40/- per Kg. of the weight of the crane. The applicants also unofficially paid freight charges to the shipping companies to suppress the same. The import invoices showed the value of the said cranes on CIF basis and the Bill of Lading showed the freight as prepaid. In fact the freight of the said goods was paid by the importers which formed a large part of the assessable value of the said goods. The differential amount of the undervaluation and freight was remitted by the applicants to the foreign suppliers and Shipping lines through unofficial channels. This modus operandi was adopted by the applicants in order to avoid payment of Customs duty on the freight component of the said goods. 2.3 The applicants hired services of one Sh. Madan Lalwani operating under CHA licence of M/s. M. Dharamdas Co. (CHA No. 11/100). In respect of declaration of the value to the Customs authorities, the applicants in their application have submitted that the declared value of Rs. 40/- per Kg. of the said good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OTAL : 9,37,61,667.37 14,13,63,668.47 1,27,56,865 13,25,803 The amount of Rs. 1,37,69,216/-, inclusive of interest, paid in the present matter includes admitted additional duty liability of M/s. AVI Trexim and M/s. Bajranglal Vijay Kumar as under : S. No. Name of the Applicant Declared Value Re-deter-mined Value Diff. Duty Admitted Interest Admitted 1. M/s. AVI Trexim Pvt. Ltd 4,30,20,757.35 8,55,44,267.26 1,01,51,408.56 7,77,529.34 2. M/s. Bajranglal Vijay Kumar 3,20,37,881.52 3,31,23,276.13 16,51,308.21 5,46,308.81 TOTAL : 7,50,58,639 11,86,67,543 1,18,02,717 13,23,839 The applicants further submitted in their application that they have waived, by way of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure of the duty liability by the applicants. (iii) The action against six (6) cranes imported by M/s. Opel Trade Corporation came to be initiated only on 8-3-2011 and the period of 180 days from the said date was not yet over. Therefore the impugned application in so far as it related to M/s. Opel Trade Corporation did not even come within the purview of Section 127B(2) of the Customs Act, 1962, apart from the fact that it did not meet the mandatory entry criteria set out under Section 127B(1) of the Customs Act, 1962. 4.2 In respect of the admission of additional duty liability, the DRI submitted that the applicants admitted a duty and interest liability of Rs. 1,40,80,707/- whereas only Rs. 1,37,69,215/- had been paid without accounting for the balance Rs. 3,11,491/-. 4.3 In respect of freight, the DRI submitted that the contention of the applicant to add only 20% of the FOB value of the goods as freight was incorrect. The DRI submitted that the applicant always knew the actual freight amount paid as the foreign supplier was in fact related to the applicant, the foreign supplier (M/s. R. Gupta Corporation, USA) firm being owned by the son of Sh. Vijay Kumar Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is claimed to have been obtained from the Internal Audit of the US Department of Commerce, Chief Foreign Trade Division, United States cannot be accepted on its face value without verification and authentication of the same. Such a suspicion of the DRI stems from the fact that the foreign supplier M/s. R.K. Gupta Corporation, USA had raised fabricated invoices showing under stated values of the old and used cranes supplied to other importers in India. 4.6 The DRI submitted that the investigations on all aspects of the case were continuing. Under the circumstances, the Revenue prayed that it may be allowed to complete the investigations where after a show cause notice shall be issued as contemplated under the law. Accordingly the DRI prayed for dismissal of the application. Hearing held on 8-7-2011 : 5.1 A hearing was held on 8-7-2011 when the applicant prayed for admission of the case for settlement, release of the seized/detained cranes on such terms and conditions as may be imposed by the Commission at the interim stage, immunity from fine and penalty under the Customs Act, 1962, immunity from prosecution under the Customs Act, 1962, and any other incidenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atutorily prescribed rates as well as such amount of fine and penalty as may be determined on finalization of the settlement proceedings. (2) The applicants shall furnish bank guarantee for full amount of the differential duty payable as calculated by the Revenue, excluding the amount of admitted differential duty as disclosed by the applicants in their application and which already stands deposited in respect of the seized cranes in question. (3) The applicants shall additionally furnish bank guarantee equivalent to 25% of the total differential duty payable in respect of seized cranes as calculated by the Revenue to secure liabilities arising towards fine, penalty. (4) The applicants shall also furnish further additional bank guarantee equivalent to 15% of the amount for which bank guarantee is required to be furnished in compliance to condition at (2) above, to secure interest liability on differential duties held payable on finalization of proceedings. (5) The applicants are required to furnish bank guarantees as ordered above in favour of the Commissioner of Customs (Import), New Customs House, Mumbai. The bank guarantees furnished by the applicants shall contain s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds and Bank Guarantees as per the terms conditions imposed by the Bench in the said Interim Order dated 26-7-2011, In view of the above, the applicant only partially complied with the said Interim Order dated 26-7-2011. Further investigations and submission of report by DRI : 7.1 Vide its letter F. No. DRI/MZU/B/lnv-02/2010-11, dated 24-10-2011, the DRI submitted that the SCN could not be issued within the timeframe of three months and hence it submitted a report as directed in the Interim Order dated 26- 7-2011. The DRI has submitted that the SCN would be issued by 15-12-2011 and requested that for granted of time till then for issuing the SCN. The request of the DRI was agreed to by the Bench. 7.2 Vide the said report dated 24-10-2011, the DRI informed that it was able to proceed further in the case and record statements of the following persons : i. Sh. Rai Kamal Singh : He was avoiding appearance before the DRI. He appeared in the DRI office on 9-8-2011 when his statement was recorded under Section 108 of the Customs Act, 1962. He admitted that he had lent the name and IEC of his firm i.e., M/e. Opel Trade. Corporation on the request of Sh. Vijay Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that 5 more cranes were in the possession of M/s. Avi Trexim Pvt. Ltd. The DRI submitted that it was conducting investigations with regard to the said 5 cranes. 7.4 The buyers of some of the cranes were called through summons. Statements of 9 persons who responded to the said summons were recorded. The position in brief from their statements is given hereunder : S. No. Name of Importer Applicant B/E No./ Date Buyer s Name Declared CIF Landed cost Sale value Remarks 1. M/s. Bajranglal Vijay Kumar 845030, dated 9-6-08 Sh. Badre Alam Mohd. Sajjad, Prop, of M/s. S.L.Hiring Co., Mumbra, Thane US $ 20,000 Rs. 8,62,000 13,51,118 31,00,000 Difference of Rs. 17.5 Lakhs 2. 849191, dated 4-7-08 Sh. Harbhajan Singh K. Jandir, Prop, of M/s. Mannu Carrier Corporation, Navi Mumbai US $ 21,000 Rs. 9,07,200 14,80,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. Statements of all such buyers were required to be recorded for the purpose of completion of investigations in the case. The DRI, Mumbai has further submitted that considering the apparent undervaluation in the import, in order to ascertain the actual value and authenticity of the transactions, the matter has been referred to COIN sources for obtaining additional information, reply of which is still awaited. Issue of the SCN dated 13-12-2011 : 8.1 A Show Cause Notice F. No. DRI/MZU/B/Inv-02/2010-11, dated 13-12-2011 was issued by the DRI, Mumbai Zonal Unit, Mumbai along with the relied upon documents running in two volumes as part of the said SCN. The said SCN dated 13-12-2011 was issued pursuant to the directions for the same contained in the Interim Order dated 26-7-2011. 8.2 The SCN dated 13-12-2011 reiterated the facts submitted by the DRI in its report dated 27-6-2011 and argued by them at the time of hearing on 8-7- 2011. Also the SCN brought out in detail the roles played by the applicants and co-applicants in the present case of duty evasion. The DRI carried forward its investigations after issue of the Interim Order dated 26-7-2011 and crystallized th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty amounting to Rs. 1,16,80,031/- leviable on the aforesaid 16 used cranes, imported and cleared in the name of M/s. Bajranglal Vijaykumar, on the basis of the redetermined value of Rs. 7,20,74,089/- CIF (assessable value of Rs. 7,27,94,830/-) should not be demanded and recovered under the provisions of Section 28(1) of the Customs Act, 1962, with interest under the provisions of Section 28AB of the Customs Act, 1962 (details as per Annexure-D-1 ); (iv) duty amount of Rs. 16,51,308.21 and interest amounting to Rs. 5,46,308.81, paid during the ongoing investigations should not be appropriated against differential duty and interest that may be adjudged under Section 28(2) of the Customs Act, 1962 in respect of the aforesaid 16 cranes; (v) the aforesaid 16 used cranes, imported and cleared in the name of M/s. Bajranglal Vijaykumar, from Mumbai port during the period from January, 2008 to November, 2008, (details as per Annexure-D-1 ) with a declared value of Rs. 3,18,70,460/- CIF (re-determined value of Rs. 7,20,74,089/- CIF) should not be held liable to confiscation under Section 111(d) [read with provisions of Section 11(1) of the Foreign Trade (Development Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - leviable on the aforesaid 24 used cranes, imported and cleared in the name of M/s. Avi Trexirn Pvt. Ltd., on the basis of the redetermined value of Rs. 11,44,44,254/- CIF (assessable value of Rs. 11,55,88,697/-) should not be demanded and recovered under the provisions of Section 28(1) of the Customs Act, 1962, with interest under the provisions of Section 28AB of the Customs Act, 1962 (details as per Annexure-D-2 ); (iv) duty amount of Rs. 1,01,51,408.56 and interest amounting to Rs. 7,77,529.34, paid during the ongoing investigations should not be appropriated against differential duty and interest that may be adjudged under Section 28(2) of the Customs Act, 1962 in relation to the aforesaid 24 cranes; (v) the aforesaid 24 used cranes, imported and cleared in the name of M/s. Avi Trexirn Pvt. Ltd., from Mumbai port during the period from November, 2008 to October, 2010, (details as per Annexure-D-2 ) with a declared value of Rs. 3,99,44,287/- CIF (redetermined value of Rs. 11,44,44,254/- CIF) should not be held liable to confiscation under Section 111(d) [read with provisions of Section 11(1) of the Foreign Trade (Development Regulation) Act, 1992, Rule 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid 2 used cranes, imported and cleared in the name of M/s. Avi Trexim Pvt. Ltd., on the basis of the redetermined value of Rs. 39,49,994/- CIF (assessable value of Rs. 39,89,494/- CIF) should not be demanded and recovered under the provisions of Section 28(1) of the Customs Act, 1962 with interest under the provisions of Section 28AB of the Customs Act, 1962 (details as per Annexure-D-3 ); (iv) the bank Guarantee of Rs. 11,42,714/- furnished towards the differential duty and bank guarantee of Rs. 3,19,823/- furnished towards other liabilities as per the Interim order dated 26-7-2011 of the Hon ble Settlement Commission, should not be appropriated against differential duty and interest that may be adjudged under Section 28(2) of the Customs Act, 1962 in relation to the aforesaid 2 cranes; (v) the aforesaid 2 used cranes, imported and cleared in the name of M/s. Avi Trexim Pvt. Ltd., from Mumbai port (details as per Annexure-D-3 ) with a declared value of Rs. 26,50,600/- CIF (re-determined value of Rs. 39,49,994/- CIF) should not be held liable to confiscation under Section 111(d) [read with provisions of Section 11(1) of the Foreign Trade (Development Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid 6 used cranes, imported and cleared in the name of Raj Kamal Singh (Prop. : M/s. Opel Trade Corporation), from Mumbai port (details as per Annexure-A-4 ) rendered liable to confiscation under Sections 111(d) and Section 111(m) of the Customs Act, 1962, as aforesaid should not be imposed on each of them jointly and severally. (iii) penalty under Section 114AA in relation to the aforesaid 6 used cranes, imported and cleared in the name Raj Kamal Singh (Prop : M/s. Opel Trade Corporation), from Mumbai port (details as per Annexure-A-4 ), should not be imposed on each of them jointly and severally. (iv) why the bank guarantee of Rs. 18,52,556/- and Rs. 9,32,178/- furnished as per the interim order dated 26.07.2011 of the Hon ble Settlement Commission should not be appropriated against the penalty that may be imposed on them under the provisions of the Customs Act, 1962 in relation to the aforesaid cranes. 8.5 Due to issue of SCN dated 13-12-2011 which demanded differential duty amount which is more that the duty liability admitted by the applicants, the hearing was re-scheduled from 27-12-2011 to 17-1-2012 to enable the applicants to file fresh app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29-12-2010 Please refer letter at page 34. 50,00,000/- 2. 17-1-2011 50,00,000/- 3. 28-4-2011 Deposited vide letter dated 28-4-2011 (page 35) 37,69,216/- 4. 7-3-2011 Deposited Vide TR-6 Challan dated 7-3-2011 (over and above the duty on declared assessable value in respect of six cranes imported in the name of Opel Trade Corporation) -at Exhibit - AA hereto 18,76,515/- 5. 4-10-2011 Recovered by the DRI towards duty from M/s. Manu Carrier Corporation (as per latter dated 4-10-2011 copy of which is annexed herewith for ready reference at Exhibit- BB ) 7,64,810/- 6. 17-1-2012 By requesting for encashment of Bank Guarantees 11,42,714/- 7. 3,19,823/- 8. 18,52,556/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the certificates from a Chartered Engineer in India have been obtained to arrive at the value at the time of manufacture in the Country of manufacture and on that basis the FOB value at the load port has been given by the Chartered Engineer in India. In respect of six cranes imported in the name M/s. Opel Trade Corporation which were seized before grant of Out-of-Charge , it is alleged that no differential duty is further demanded as the value of these cranes was assessed on the basis of Chartered Engineer s Certificate. It is relevant to note that the authenticity of the documents by the applicants to justify the admitted FOB value for the purpose of settlement, which are referred and relied upon in the SCN and show actual transaction value, are not disproved in investigations, and therefore the same cannot be discarded as proposed in the SCN. There is not even any allegation that the applicants and the exporter in USA colluded to declare lesser value at US Ports, to claim any benefit whatsoever in the instant proceedings or otherwise. 9.5 In the matter of M/s. NGK Trading Company, the applicant-importer undervalued the goods in connivance with US exporters who issued two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 certificates. Both the sides were directed to submit their reports on he above issues. Disclosures by co-applicant Shri Mahesh Agarwal : 11.1 Shri Mahesh Agarwal, a co-noticee to the SCN dated 13-12-2011, filed his application as a co-applicant on 17-1-2012. The charges against Sh. Mahesh Agarwal in the SCN dated 13-12-2011 are that he acquired possession of or was in some way concerned in carrying, removing, depositing, keeping, selling or purchasing or in any other manner dealing with the said imported used cranes, which he knew or had reason to believe were liable to confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962. Consequently, Sh. Mahesh Agarwal has, in relation to the said cranes, rendered himself liable to penalty, jointly and severally under Section 112(a) and Section 112(b) of the Customs Act,1962. 11.2 Shri Mahesh Agarwal, the co-applicant, has been asked to show cause as to why penalty under Section 112(a) and/or Section 112(b) of the Customs Act, 1962 should not be imposed on him in relation to the said cranes, imported and cleared in the name of M/s. Avi Trexim Pvt. Ltd., M/s. Bajranglal Vijay Kumar and M/s. Opel Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es will converge into a solution acceptable to both the sides. Also, the Bench also required some time to study the reports submitted by the applicants and the DRI. In view of the same, settlement of the present case was not expected to reach within the stipulated time of nine (9) months from the date of application i.e., by 31-1-2012. Accordingly, it was felt by the Bench that the time limit to settle the case should be extended by three (3) months to 30th April 2012. Accordingly, under proviso to Section 127C(6) of the Customs Act, 1962, the period of nine months was extended by the Bench for a further period of three (3) months, i.e., upto 30-4-2012, by an order dated 31-1-2012, on file. The same was communicated to both the sides vide Commission s letter dated 31-1-2012. Submissions dated 24-1-2012 by the DRI, Mumbai : 14.1 Vide their letter F.No. DRI/MZU/B/lnv-02/2010-11, dated 24-1-2012 the DRI has submitted that no demand was raised in respect of 6 cranes imported in the name of M/s. Opel Trade Corporation since the values at which these cranes were assessed were given by a Chartered Engineering firm. The said values were given by the said Chartered Engineering f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Opel Trade Corporation, who are only name lenders. Scrutiny of the import documents revealed that the initial value declared for the said goods was only Rs. 1,85,17,850/- which was enhanced to Rs. 2,62,92,590/-. The said 6 cranes were therefore detained by DRI on 8-3-2011, i.e., subsequent to assessment and payment of duty by the applicants. In the show cause notice the assessed value of the said 6 cranes i.e. Rs. 2,62,92,590/- has been adopted (not the declared value of cranes which was given as Rs. 1,85,17,850/-) and no demand of differential duty has been raised in respect of the same. However, the applicants are misleading the Hon ble Commission by projecting that they have admitted differential duty liability in respect of these 6 cranes, when in fact they are disputing the values at which they had attempted .to clear these 6 cranes in the name of a third party and trying to take set-off of the duty paid by them in respect of the 6 cranes at the time of clearance. The applicant was harping on the original declared value of Rs. 1,85,17,850/- to be the correct transaction value and not the enhanced value of Rs. 2,62,92,590/-. 14.3 The DRI has further submitted that in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same in the ongoing proceedings before this Commission. 14.4 The DRI further submitted that as regards certain contentions raised by the applicants in the present application, point wise reply is submitted for the consideration of the Settlement Commission as under : a. As regards para 2 of the present application, it is submitted that the applicants are trying to mislead the Commission by giving wrong/imaginary amounts. In Column No. 6(c) of the Form No. SC(C) -1, the applicants are required to mention the amount of Duty demanded in the notice (in Rs) . The details of duty demanded in the show cause notice dated 13-12-2011 are as under : Sr.No. Name of the importer No. of cranes Duty leviable (Rs.) Duty paid at the time of clearance (Rs.) Differential duty payable as demanded in the SCN (Rs.) 1. M/s. Bajranglal ViiayKumar 16 2,09,31,966/- 92,51,935/- 1,16,80,031/- 2. M/s. Avi Trexim Pvt Ltd. 24 2,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. 4-10-2011 7,64,810/- Recovered by DRI towards duty from M/s. Manu Carrier Corporation (as per letter dated 4-10-2011) From the private records of the applicants, it was gathered that one P H 650 crane (Sr. no. 30527 was sold to M/s. Manu carriers for a consideration of Rs. 41,50,000/- plus sales tax. The partner of M/s. Manu carrier also confirmed that he had purchased the above cranes for Rs. 41.5 Lakhs plus sales tax. Based on the sale price the CIF value of the crane was worked out to be ₹ 30,10,402/- (as against the declared CIF value of Rs. 18,47,659/-). Admitting the re-determined CIF value, partner of M/s. Manu Carrier voluntarily paid the above amount towards the differential duty, interest and other liabilities in respect of the above crane. It is not understood as to why the above amount paid by a third party can be adjusted towards the liability of the applicants when they are not admitting the value of the crane as mentioned in their own private records. 14.5 The DRI has submitted that it reserves its right to make more submissions in the ongoing proceedings, if requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave further stated that they are aware of the consequences of submitting false evidences, which would render the application to fail, and even immunities granted may be revoked. Hence, they would not gain anything by submitting false documents for settlement of their cases. None of the documents submitted by the applicants have been proved to be incorrect in the investigations. The applicants have co-operated fully for the settlement of their cases by making true and full disclosures. 15.5 The applicants have prayed for condonation of the delay in filing the present submissions. The submissions were to be filed by 28-1-2012 whereas the same bear the date of 31-1-2012 and have been filed on 1-2-2012 in the Secretariat of the Commission. The applicants have prayed for hearing in the matter before passing any final order. Submissions of the jurisdictional Commissioner : 16. The jurisdictional Commissioner submitted a report dated 23-2-2012, received in the Secretariat of the Commission on 24-2-2012. Vide his report dated 23-2-2012, the jurisdictional Commissioner reiterated the contents of the SCN dated 13-12-2011 and prayed that the quantum of redemption fine may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and by adding thereto notional insurance @ 1.125% of FOB value and notional freight @ 20% of FOB value, to arrive at the CIF value. By adding 1% of CIF, to such CIF value, the assessable value was computed. The applicable duty on the same was calculated as per prevailing exchange rate on the date of importation and the interest under Section 28AB @ 13% was computed on the differential duty liability. 17.3 After admission of the case, a SCN bearing file No. DRI/MZU/B/Inv-2/2010-11, dated 13-12-2011 was issued by ADG, DRI. On receipt of the same, the differential duty liability was revised by him. For computing the revised differential duty liability, instead of notional freight @ 20% of FOB value, the actual freight as provided in the SCN was taken to arrive at correct assessable value for the purpose of settlement. Accordingly following insertions/amendments were sought by him :- A. In column 6(c), the following may please be inserted- 1. The total duty ascertained by DRI is Rs. 6,63,20,459/-, as against duty amount on declared value, of Rs. 2,41,19,601 which includes :- a. Rs. 2,09,31,966/- as against Rs. 92,51,935/- on declared value in M/s. Bajranglal Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. 18,52,556/- 9. 9,32,178/- 10. 28-4-2011 Less - amount towards duty on declared value in respect of 2 cranes seized at Port 6,39,691/- TOTAL : 2,00,18,121/- This is against total liability of Rs. 1,91,02,202/- towards differential duty (Rs. 1,65,46,763/-) and interest (Rs. 25,55,439/-) G. In true Spirit of settlement, the applicant also submitted as additional corroborative evidence copies of the purchase invoices of M/s. R.K. Gupta Corporation, USA in respect of the subject cranes. These additional corroborative evidence were submitted in support of the correct transaction value declared in the certificates issued by M/s. R.K. Gupta Corporation/the data of FOB value declared at US ports. A comparison of these purchase invoices vis- -vis the value declared at US Ports would show that the value declared by M/s. R.K. Gupta Corporation before US Customs were not lower that their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of settlement, which are referred and relied upon in the SCN and show actual transaction value, are not disproved in investigations. The applicant has stated that the same, therefore, cannot be discarded as proposed in the SCN. L. The applicant has stated that there is not even any allegation that he and his son/exporter in USA colluded to declare lesser value at US Ports, to claim any advantage or benefit whatsoever. Even applying the test of preponderance of probability, neither there is anything to suggest that the value declared in US was underdeclared transaction value in FOB terms, nor any motive alleged for under declaring the transaction value at US ports. The direct and credible evidence of correct FOB value transacted in the matter is submitted by me in true spirit of settlement with absolute frankness by surrendering to the jurisdiction of this Hon ble Commission. M. The applicant has further submitted that when direct and credible evidence is made available on record. Preference to any arbitrary and presumptive evidence would lead to mis-carriage of justice. N. The applicant has stated that in numerous cases, the DRI has itself relied on the value declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the imposition of any penalty under this Act to which such person would have been liable, had no such immunity been granted . S. The applicant has stated that any of his submissions or evidences tendered by him before this Hon ble Commission, if found to be false and incorrect, any immunity granted by this Hon ble Commission would be liable to be withdrawn on that ground alone. T. The applicant has stated that whatever stated above is true and correct according to the best of his knowledge and belief and he believes the same to be true. Hearing held on 28-2-2012 : 18.1 Hearing in the case was held on 28-2-2012. The applicant was represented by S/Shri K.D. Mankar, Sanjay Agarwal and Yogesh Rohira, all Advocates whereas Jurisdictional Commissioner was represented by Shri Mohd. S.I. Faisal, Dy. Director and Shri D.S. Mehta, SIO, DRI, MZU, Mumbai. 18.2 The ld. Advocate of the applicant explained in detail the submissions contained in the amendment to the Settlement application filed by him as well as the affidavit filed on 27-2-2012. He stated that the value declared by the exporter before the US Customs was the true FOB value which is also supported by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal hearings. 19.2 There are two main allegations against the applicants. Firstly, on the valuation front, they imported cranes and underdeclared the values thereof. The applicants further resorted to non-declaration of the actual freight amount to the Customs authorities leading to the assessable value being suppressed. The second is that the export documents submitted by the applicants after the same were obtained by them from the US Department of Commerce, Chief Foreign Trade Division, are not acceptable to the DRI on their face value without verification and authentication of the same. 19.3 The DRI has recovered certain private records during the course of investigations. These records primarily contain details of the prices at which the applicants have sold the imported cranes in local markets. In addition, the said records also show certain figures allegedly pertaining to the amount of money remitted against import of cranes. The value of cranes at which these were imported is at large variance with the prices at which the same were sold in the local market, suggesting that the declared values of the said cranes were less than the actual value, resulting in evasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,16,80,031 2. M/s. AVI Trexim Pvt. Ltd. (24 cranes) 3,99,44,287 11,44,44,254 1,79,32,536 3. M/s. AVI Trexim Pvt. Ltd. (2 cranes, live consignment) 26,50,600 39,49,994 3,13,399 4. M/s. Opel Trade Corporation (6 cranes) 1,85,17,850 2,62,92,590 Nil* TOTAL : 9,29,83,197 21,67,60,927 2,99,25,966 [*Full duty on redetermined value paid at the time of clearance of the cranes.] 19.5 As per the DRI, a conspiracy was hatched by the co-applicant Shri Vijay Kumar Gupta (who is a partner in the applicant firm M/s. Bajranglal Vijaykumar and a Director of the applicant company M/s. Avi Trexirh Pvt. Ltd., Kolkata), Shri Ranjan Gupta (son of Shri Vijay Kumar Gupta, who owns and controls the overseas supplier firm M/s. R.K. Gupta Corporation of USA), Shri Sachin Gupta and Shri Karan Gupta to defraud the exchequer of its le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroneous methods. As per one method, where the private records show sale of the said cranes by the applicants either in USD or in Rupees, certain deductions have been made to arrive at the arbitrary deemed assessable value on residual method. Whereas, as per the other method, where there is no indication of actual sale value in seized private records, the certificates from a Chartered Engineer in India have been obtained to arrive at the value at the time of manufacture in the country of manufacture. On that basis the FOB value at the load port has been calculated by the Chartered Engineer in India. The applicants have argued that the authenticity of the documents submitted by the applicants to justify the admitted FOB value for the purpose of settlement, which are referred and relied upon in the SCN and show actual transaction value, are not disproved in investigations, and therefore the same cannot be discarded. The applicant has admitted the following value and resultant differential duty which has been admitted as the additional duty liability : S. No. Name of the applicant Value declared Value rede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case the applicant submitted any false and incorrect particulars, material to the settlement or had given false evidence. The applicant has stated in his Affidavit that any of his submissions or evidences tendered by him before this Hon ble Commission, if found to be false and incorrect, any immunity granted by the Commission would be liable to be withdrawn on that ground alone. 19.11 The Bench finds that the applicants have declared the FOB value of the impugned goods based on the documents containing the declared export values of the said goods before the U.S. Customs which are duly certified by U.S. Department of Commerce, Chief Foreign Division. These values provided by the U.S. authorities are also backed by purchase invoices of U.S. sellers of the impugned goods to M/s. R.K. Gupta Corporation, U.S.A. who is the supplier of the said goods to the applicants. The Bench finds that the FOB value now declared by the applicants based on the aforesaid documents should form basis of arriving at the CIF value of the impugned goods rather than determining the assessable value of the goods based on sale price of the goods in India taken from the private records recovered from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act, 1962 and the applicants/co-applicants are held liable to penalty under Section 112(g)/112(b)/114A/114AA of the Customs Act, 1962. 19.14 Applicants/co-applicants have requested for grant of immunity from fine, penalty and prosecution in view of their true and full disclosure and prompt payment of duty and interest, in view of the disclosures made by them and payment of duty and interest, their offence is mitigated to some extent, but considering the gravity of their misdeeds, misdeclarations and connivance in evading payment of appropriate Customs duty, they deserve to be suitably penalised. 20. In view of the above discussions, the following order is passed in terms of the provisions of sub-section (5) of Section 127C of the Act : ORDER Customs Duty : The Customs duty liability is settled at Rs. 1,65,46,763/-. The applicants have claimed to have paid the entire differential duty liability. The individual differential duty liabilities of the three applicants are as under :- S. No. Name of the applicant Amount of differential Customs duty settled 1. M/s. Bajrang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. M/s. Opel Trade Corporation 6 Rs. 3,00,000/- (Rs. Three Lakhs Only) TOTAL : 22 Rs. 16,00,000/- (Rs. Sixteen Lakhs Only) Immunity is granted from payment of fine in excess of the above amounts. Penalty : The applicants and the co-applicants are granted immunity from imposition of penalty in excess of the following amounts :- S. No. Name of the applicant/ co-applicant Amount of penalty 1. M/s. Bajranglal Vijaykumar Rs. 1,80,000/- (Rs. One Lakh Eighty Thousand Only) 2. M/s. AVI Trexim Pvt. Ltd. Rs. 5,80,000/- (Rs. Five Lakhs Eighty Thousand Only) 3. M/s. Opel Trade Corporatior Rs. 65,000/- (Rs. Sixty Five Thousand Only) 4. Sh. Vijay Kumar Gupta Rs. 50.000/- (Rs. Fifty Thousand Only) 5. Sh. Sachin Gupta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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