TMI Blog2017 (12) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by the importer. The impugned order has referred to proviso in section 19 of Customs Act, 1962 as the authority to club the values of the various goods. There is no finding as to the applicability of section 19 of Customs Act, 1962 to the facts pertinent to the dispute. Such finding should necessarily decide if the goods are presented as a set of articles with a unified, non-separable value, enumerate the various articles that comprise the set, ascertain the rate of duty applicable to each and then compute the duty liability of the unified value by applying that identified rate of duty. Without such an exercise, invoking of section 19 of Customs Act, 1962 is not consummated. Appeal allowed by way of remand. - C/599 to 602/2007 - A/91366-91369/2017 - Dated:- 7-12-2017 - Dr D N Panda, Judicial Member And Shri C J Mathew, Technical Member Shri T Viswanathan, Advocate for appellant Shri PRV Ramanan, Special Counsel for respondent ORDER Per : CJ Mathew Appeal of M/s Vodafone Essar Ltd (formerly known as M/s Hutchinson Essar Ltd and M/s Hutchinson Max Telecom Ltd) assails order-in-original no.CC-(SP)-09/2007/ACC (Adj) dated 29th March 2007 in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . For the import of software, appellant claimed exemption from duty under notification no.17/2001 dated 1st March 2001. Likewise, the goods described in sl nos. 2, 3 and 5 of the Table referred supra were also accurately described and benefit of notification benefit claimed only according to eligibility. 5. It was also submitted on behalf of the appellant that the software component had been incorrectly denied separate assessment deliberately to exclude the coverage of exemption and that, instead of accepting, or appraising, value as mandated in section 14 of Customs Act, 1962 for each item of imports, rule 9 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 was wrongly invoked along with incorrect application of section 19 of Customs Act, 1962 to adjudicate the matter. 6. Learned Counsel for appellant submitted that the goods covered in the five bills of entry were imported for execution of a turnkey project for implementing pre-paid services. Besides elaborating on the individual characteristics of each of the consignments, their conformity with the descriptions in the bills was brought to our notice as were the billings made by the supplier; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not in accord with law of commodity taxation to include cost of services in assessable value, and more so, as the agreement referred to by appellant was unambiguously clear. (c) that rule 9(1) of the Customs Valuation (Determination od Price of Imported Goods) Rules, 1988 is not applicable as services are clearly distinct from the supplied goods and are to be rendered post-clearance. (d) that recovery of duty is barred by limitation as notice was issued on 6th May 2006 for goods imported between 9th May 2001 and 13th June 2003 without allegation of suppression. (e) that value of software should not have been included in that of hardware considering that these are distinct goods and liable to different rate of duty with eligibility to the benefits of exemption notification. 10. Learned Counsel placed reliance on the decision of the Tribunal in Vodafone Essar Gujarat Ltd v. Commissioner of Customs (Imports) Mumbai [2009 (237) ELT 458 (Tri.-Mumbai)] and submits that hardware and software should have been dealt with separately though he did concede that this decision of the Tribunal had not been followed in Bharti Airtel Ltd v. Commissioner of Customs Banga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h declared value of ₹ 72,93,816 whereas the import was of the second node of voice service director platform with multiple applications for rendering pre-paid services and this wilful mis-declaration with the intent to avail the benefit of notification no.17/2001 led to confirmation of differential duty of ₹ 12,35,281. e) in bill of entry no. 263032, the imported goods were described as voice mail service software and valued at ₹ 1,41,58,584 whereas the imports were second node of voice service director platform imported vide bill of entry no. 264446 for implementing the second phase of the project with intent to mislead the assessing officer as is evident from the scope of the agreement which did not cover such software as declared implying that the value so assigned was also consideration for the voice service director platform and, more so, as voice mail was not put into service even two years after the said import of hardware and software for it. f) based on these facts, the adjudicating authority has concluded that the value declared in bill of entry no. 263032 did not relate to any software but represented payment to overseas supplier for second n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdeclaration on the part of the appellants with intent to evade duty by claiming ineligible exemption, and failure to furnish particulars that had been called for, leaves no other alternative but the recovery of differential duty and consequences of confiscation and penalty. According to him, falsifying the description of goods was intended to conceal the true nature of the goods and this compounded by obduracy in submitting technical details and literature that would throw light on about the nature and character of the goods was intended to divert the attention of assessing officers from the utilization of imported goods for a turnkey project as well as the non-introduction of voice mail service. 13. Referring to bill of entry no.264446/29.6.2001, he contends that investigation revealed the objective of establishing voice software director platform as a turnkey project. Likewise, he submitted that the description of goods in bill of entry no.263032/20.6.2001 had been falsified with intention to mislead. According to him, the deliberate misdescription in bill of entry no. 264446 to avail benefit of notification by this modus operandi was made apparent during investigation. Urgin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to examine whether it was obtained by threat, duress or promise and whether the confession is truthful If found to be voluntary and truthful, inculpatory portion of the retracted confession could be relied upon to base conviction..... I observe that there is sufficient corroboration available in this case and none of the notices has retracted the statement ......' 17. The charge is one of misdeclaration of goods. That these goods are for the purpose of providing pre-paid services to customers is undisputed. We take notice of the specific finding, on the basis of statements and catalogues, that the voice mail hardware was an alternative node to be used as back-up and had been misdescribed in terms of one of its potential uses with intent to avail the benefit of exemption available to imports of voice mail service hardware. In the grounds of appeal and in submissions of Learned Counsel, we do not find any contrarian explanation to this conclusion. 18. Besides that conclusion supra, the other charges of misdeclaration are based on a statement and certain catalogues that admit to a description other than that recorded in the bill of entry. It is, however, moot wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been placed on section 19 of Customs Act, 1962 as the authority to invoke the rule referred to; undoubtedly, section 19 is not without utility in such a situation. However, it is imperative that section 19 be utilized in the manner and sequence that was intended in the legislative enactment. We hold that the adjudicating authority was incorrect in presuming that section 19 conferred the authority to value goods in the manner undertaking. 21. Section 19 empowers the ascertainment of rate of duty when goods are presented as a set of articles for clearance. That it is not a provision for valuation should be apparent from the reference within it to specific and ad valorem as the two mutually exclusive possibilities. It empowers the application of the highest rate of duty that would be leviable on the various articles in the set to all the articles. Impliedly, this is to be resorted to when a single value is declared for the set as a whole and it is merely the most appropriate rate of duty that is to be determined from among the varied rates for each article in the set. The proviso in section 19 does not justify the conclusion that it is a valuation provision but is intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case, the goods viz. the animal compound feed does not consist of a set of articles for, as stated above, there is only one identifiable article viz. animal compound feed. In order to attract the provisions of Section 19 there must be a collection of articles or otherwise there must be a collection or aggregation of two or more individual and severally identifiable articles, which is not the case here. In the present case, the goods are made up of several ingredients, which have all lost their identities and have become inseparable even by common processes, and have in fact emerged as a single marketable product. Section 19 of the Customs Act has, therefore, no application whatsoever, and if this is the position, then there is no question of holding that it comes within the compass of Item No. 19 of the Indian Customs and Central Excise Tariff. 13. I may here add that in interpreting Section 19 of the Customs Act along with Item No. 19 of the Indian Customs and Central Excise Tariff, the Respondents pressed into service the two notifications referred to in the impugned orders and it was strenuously contended by the Respondents that on construing these notific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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