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2018 (7) TMI 109

bes a discrimination between the cases involving miss declaration and other. In the instant case the modus operandi as alleged by the Revenue is that the appellant were routing their import through the SEZ unit in order to achieve the object of under valuation. The negotiations for import were directly carried out by the appellants themselves with the foreign supplier but the import were routed through an intermediary in the SEZ Unit. - There was an apparent attempt to commit fraud and in these circumstances lenient view in imposing the condition of provisional release cannot be taken. - The provisional release was ordered after adjusting entire differential duty and additional amount equivalent to 15% of the said differential duty - appeal allowed in part. - Appeal No. C/10865-10872/2018-DB - Final Order No. A/ 11292-11299 /2018 - 2-7-2018 - Hon ble Mr. Ramesh Nair, Member ( Judicial ) And Hon ble Mr. Raju, Member ( Technical ) For the Appellant: Shri. G. K. Sarkar ( Advocate ) For the Respondent: Shri J. Nagori ( A. R. ) ORDER Per: Raju These appeals have been filed by various importers who had purchased the goods from a unit in the SEZ. DRI seized the goods on the charg .....

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unt over and above the declared invoice value was being sent to the said overseas suppliers through channels other than normal banking channel. Similarly in the follow four cases: • Jia Lighting & Audio Equipment Co (IEC 0510056717) • Pride India Enterprises (IEC AAIFP9203A) • Daiwik Enterprises (IEC 0516952030) • V K Ventures (IEC 0516932713) The modus operandi alleged in seizure memo is as follow: 3. Whereas M/s Zip Zap Exim Pvt Ltd (hereinafter referred to as ZZEPL), plot No. 397 AS-lV, Sector-1, special Economic Zone, Kandla, Kutch, Gujarat have imported goods viz. Electrical goods, from various suppliers of China, in their unit in KASEZ by resorting to misdeclaration of value of the said goods, on behalf of their domestic buyers/actual importers. After importing these goods in KASEZ, ZZEPL, as detailed in Annexure A to this seizure memo , have filed DAT bills entry on behalf of four buyers importers and the same were assessed by Customs KASEZ ZZEPL have cleared all the said goods in lieu of sales proceeds in Indian Rupees. The said four domestic buyers importers are (i) M/s Pride India Enterprise (IEC-AAIFP9203A), (ii) M/s Jai Lighting & Audio Equip .....

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d circular dated 16.08.2017 prescribes lenient conditions. He argued that in similar circumstances, in the case of Mala Petrochemicals & Polymers 2017 (353) ELT 446 a much lenient conditions were prescribed. He pointed out that in para 29, the conditions were prescribed as follows: 29. As far as the goods seized from the godown and premises are concerned, in view of the letter dated 17th May 2017 of the DRI to the Customs and in view of the fact that what has been deposited by the petitioner is in excess of the value of the goods and differential duty, it is directed that : (i) not later than ten days from today, the Customs officer concerned will issue an order of provisional release subject to the following conditions : (a) the petitioner will furnish a bond equivalent to the value of the goods of ₹ 1.73 crores (approximately); (b) the petitioner will furnish an undertaking that it will not contest the identity of the provisionally released goods; (c) Of the sums deposited by the petitioner, the differential duty of ₹ 61.97 lakhs and a sum equivalent to 15% of the said differential duty shall be retained and the balance shall be returned forthwith to the petitione .....

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The drawing of a distinction between seizure of imported goods as a result of undervaluation and seizure of imported goods upon misdeclaration cannot per se be said to be irrational. On the contrary, the failure to draw such a distinction and treat all types of wrongful imports on an equal footing might result in miscarriage of justice. That is perhaps why Section 110A has been worded in the way it has, leaving some margin to the Customs in the exercise of their discretion subject, of course, to the recognised legal limits. 4. We have gone through the rival submissions. We find that the appellant have tried to make a case that in terms of the Circular No. 35/2017-CUS dated 16.08.2017, a lenient view should be taken in cases involving under valuation. It is to be noted that the said Circular records as follows: para 3 &4 of circular. 3. In this context, attention is invited to the Judgment dated 28.07.2016 of the Hon ble Madras High Court in Writ Appeal No. 377 of 2016 in the case of Malabar Diamond Gallery Pvt. Ltd. vs Additional Director General, DRI, Chennai & Ors. wherein the Hon ble Court has given sufficient discretion to the adjudicating authority to deny provisional .....

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bove Circular it is apparent that it prescribes a discrimination between the cases involving miss declaration and other. As an example of other cases, the cases of under valuation has been cited. In the instant case the modus operandi as alleged by the Revenue is that the appellant were routing their import through the SEZ unit in order to achieve the object of under valuation. The negotiations for import were directly carried out by the appellants themselves with the foreign supplier but the import were routed through an intermediary in the SEZ Unit. In these circumstances, we find that t+here was an apparent attempt to commit fraud and in these circumstances lenient view in imposing the condition of provisional release cannot be taken. The appellant have relied on the decision of Hon ble Delhi High court in the case of Mala Petrochemical and Polymers (Supra) in para 23 of the said decision the following has been observed. 23. The power under Section 110A of the Act involves exercise of discretion. The scope of judicial review is to examine if the discretion has been rightly exercised; that it is not based on irrelevant materials and is fair and reasonable in the circumstances. It .....

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