TMI Blog2015 (2) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... establish that the said was over valued. Also it looked into the approach of the learned Commissioner that the export though also admitted to be under an agreement entered into with a foreign buyers and the remittance of ₹ 1.32 crores received by the Respondent No.1 through local banking channel was also not properly appreciated. Also it looked into the description and the valuation of the goods as was declared in the shipping bill in terms of the agreement and the physical value of the cassettes and the cost of recording thereof. The Tribunal having regard to the evidence brought before it, has rightly taken into account the transaction value of the goods declared as per the agreement to the extent i.e. ₹ 1.32 crores having regard to the transfer of not only the video cassettes but the contents thereof and right to telecast the same. Therefore the view taken by the Tribunal is a plausible view and no material illegality or irregularity can be noticed therein. - Decided against the appellant - Customs Appeal No.30 OF 2005 - - - Dated:- 6-2-2015 - S.C. DHARMADHIKARI AND N.W. SAMBRE, JJ. For the Petitioner : Mr. Advait Sethna a/w Ms. Raju Thakkar and Ms. Suchi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another agreement with M/s. ABCL, who were producers of the said serial for acquiring the telecast rights of the same on Sony T.V. for a consideration of ₹ 50 Lacs. It is not in dispute that the earlier contract of transferring overseas rights to M/s SetSatellite executed on 18th May 1998, another contract was entered into in relation to the same, as stated herein above, in view of the agreement of export. 5] The video cassettes of Hindi serial were exported vide shipping bills dated 27th January 1999 and 16th February 1999 having declared value of ₹ 44,40,675/and ₹ 28,29,950/respectively. 6] In view of the export agreement, third shipping bill was filed for export of recorded video cassettes on 4th March, 1999 having declared value of ₹ 1,10,71,852/7] 7] The Revenue, having received an information that the cassettes in the said shipping bill were overvalued, as such stalled the processing of the shipping bills and initiated inquiry. 8] It is an admitted fact on record that the above referred transaction/goods are not chargeable, by the Revenue. The goods were exported on two occasions vide Shipping Bills dated 27th January, 1999 and 16th Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exporter and same be destroyed. It is also ordered by the Commissioner of Customs that 6 VHS prerecorded video cassettes exported under Shipping Bill dated 27th January, 1999 and 12 video cassettes exported under Shipping Bill dated 6th February, 1999 total valued at ₹ 74,30,625/are liable for confiscation to section 113(d) and 113(i) of the Customs Act, 1962. In view of the order of the confiscation as narrated herein above and the nonavailability of the goods for confiscation, the Commissioner invoked provisions of section 114 and imposed penalty of ₹ 10 lakhs under section 114(i) on the Respondent No.1 M/s. Globe Entertainments on the basis of evidence as is discussed in the said order. A further penalty under section 114(i) came to be imposed on Mr. Hirachand Dand, Director of Respondent No.1, M/s. Orson Video Pvt. Ltd., Respondent No.2, Mr. Namdeo Bhuvad and Mr. Aziz Dohadwala, who are employees/Director of the two firms. 12] Appeal Nos.C/799 and 800/2003 came to be filed by Respondent No.1 and 2 respectively. The Appeals came to be allowed by the decision dated 10th December, 2004 by the Tribunal whereby the Tribunal has proceeded to allow the same and set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Om Prakash Bhatia V/s. Commissioner of Customs, Delhi reported in 2003(155) E.L.T. 423 (S.C.) so as to canvas that the overinvoicing of the goods for export would mean attempt to export the prohibited goods. He has sought to place reliance upon the observations made by the Apex Court in para 12 and 18 of the said judgment. The said judgment is relied upon by him so as to demonstrate that the goods which were over valued could be termed as prohibited goods. 15] He has also placed reliance on the judgment of the Apex Court in the matter of Commissioner of Central Excise Customs, A. P. V/s. Suresh Jhunjhunwala reported in 2006 (203) E.L.T. 353 (S.C.) so as to canvas that even the violation of the provisions of other statute, such as the Income Tax Act or the FERA could be taken into account so as to form an opinion that the export was that of prohibited goods. In support of his contentions, he has placed reliance upon the observations made in para 16, 18, 19 and 24 of the said judgment so as to canvas that once the Director of the Respondent No.1 while conducting an inquiry by the Revenue has brought on record through the statement recorded under Section 108 that there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Customs. He further submits that the said issue is no more res integra and is already covered by the judgment of Apex Court in the matter of Tata Consultancy Services V/s. State of Andhra Pradesh reported in (2005) 1 SCC 308. He has sought to rely upon the observations made by the Apex Court in para 27 for the purpose of consideration of fact while assessing the value of the goods to be exported. 19] In addition to above, he submits that the learned Tribunal has rightly taken into account the entire matter and has reached to a conclusion that the Assessee is not liable for the penalties/fine as ordered. As such, he has supported the order passed by the Tribunal and prayed for dismissal of the Appeal. 20] In the light of above referred submissions, we proceed to consider the findings recorded by the Commissioner in the order in original and that of the Tribunal. It is noticed from the order of the Commissioner that respondent No.2 to the appeal, i.e. Orson Video which has acted for the Globe Entertainments, i.e. respondent No.1, who is an exporter, as a manufacturer of the cassettes have processed the recording of VHS cassettes at their workshop and has also furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act and as such, proceeded to hold that respondent No.1 was effecting export by misdeclaring the value for the purpose of claiming income tax benefit and the material cost plus the recording charges and valued the exported goods at ₹ 21,000/against shipping bill dated 4th March 1999 and as such, ordered confiscation. 24] In appeal, the Tribunal noted that there is no dispute that the goods under export are neither dutiable nor prohibited for export. It is also claimed that the provisions under Sections 113 (d) and 113 (i) of the Customs Act are not attracted. The Tribunal, in the light of the observations made by the Commissioner and while reassessing the same has noted that the purchase of rights by respondent No.1 for goods of ₹ 50 Lacs from M/s ABCL was very much established as M/s. ABCL was producer of the serial. The Tribunal also noted that pursuant to the agreement with SetSatellite, Singapore of that of respondent No.1, the foreign remittance was very much certified by the Bank about receipt of consideration of ₹ 1.32 Crores. As such, according to the Tribunal, there appears to be genuineness in the transaction, however, if the allegation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an empty formality, undertaken with an intention to draw benefit under Section 80 HHC of the Income Tax Act was not correct, and there was no contravention of the provisions of the Customs Act, is just and proper. The reliance placed on the judgment of Om Prakash Bhatia (cited supra), in the matter of overinvoicing of the goods and as such, the goods under this case are to be termed as prohibited goods, was rightly negated by the Tribunal. 27] So far as the evidentiary value of the statement recorded under Section 108 of the Customs Act is concerned, the said statement cannot be read in isolation in the background of the fact that the contract by respondent No.1 with SetSatellite, Singapore was taken to its logical end. Reading down of said statute to the detriment of respondent No.1 was rightly overlooked by the Tribunal. In view thereof, the judgment relied upon in the matter of Commissioner of Central Excise and Customs (Gen), Mumbai Vs. Abdulla (cited supra), will be hardly of any assistance to the Revenue. 28] So far as the overvaluation of the goods is concerned, the Commissioner of Customs in his order in original has given finding that the actual valuation of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property and not the media i.e. the paper or cassette or disc or CD. Thus a transaction sale of computer software is clearly a sale of goods within the meaning of the term as defined in the said Act. The term all materials, articles and commodities includes both tangible and intangible/incorporeal property which is capable of abstraction, consumption and use and which can be transmitted, transferred, delivered, stored, possessed etc. The software programmes have all these attributes. 29] Having considered rival contentions raised by the parties, it is required to be noted that the Revenue while issuing the show cause notice to the Respondent No.1 has placed reliance upon the certain factual matrix in relation to the transaction in question and has in clear terms relied upon the admissions given by the representative of the Respondent No.1, namely, Mr. Hirachand Dand, whose statement was recorded under section 108 of the Act for the purpose of conducting an inquiry and for reaching to a conclusion as regards the over valuation of the goods. Except the said piece of evidence which is considered by the Revenue, it is not independently established on the record as to how the ..... 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