TMI Blog2020 (9) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 4.11.2016 has categorically stated that the original file of seized documents, hard disc and pen drive seized under Panchnama are not traceable. We further find that the appellant was not noticed before opening of the hard disc/pen drive by the Department. One hard disc and pen drive was opened in the presence of Shri Sanjay A. Chothani, employee of the CHA firm and at the time of opening of another hard disc on the other date, nobody was present in absence of notice to the appellant to witness the retrieval of data. Thus, the whole exercise of the retrieval of data is vitiated rendering it unreliable - Further, as required by Section 138 C of the Customs Act, Revenue failed to bring on record the details of the computer or machine, on which the data was prepared or compiled. Further, it is found that there is no specific correlation with the bills of entry under dispute with the alleged evidence of wire transfer. Further, there is no investigation or confirmation from the persons, whose names have appeared from the email for wire transfer. The conclusion has been drawn by the Revenue from the cost sheet on the basis of assumption and presumption. The cost sheet reflects t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r import of VRLA batteries, holding the same being value suppressed and mis-declared and accordingly, the value was re-determined and differential customs duty of ₹ 30,17,330/- was demanded along with interest and equal amount of penalty under Section 114 A of the Customs Act. Further, penalties have been imposed on Shri Kapil Garg, Director amounting to ₹ 3,00,000/- under Section 112(a) and ₹ 2,00,000/- under Section 114 AA of the Customs Act. 3. The brief facts are that M/s Kuber Impex Limited, Indore is an importer. They had imported a consignment of 10,000 pieces of voltage Regulated Lead Acid Batteries (VRLA) 12V 7.2 Ampere Hours, through JNCH, Nhava Sheva, vide Bill of Entry No. 803525 dated 25.08.2010, by declaring the unit value @ US$ 1.17 (₹ 55.97) per piece. The total declared value of goods was ₹ 5,59,721/- and in US$ 22700 (C F). The supplier had raised Invoice No. LHI1010290002 dated 10.08.2010 for these VLRA batteries. The above said Bill of Entry was facilitated through Risk Management System under no assessment, no examination procedure. The importer deposited Customs duty amounting to ₹ 1,50,278/- on the above declared value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tery mentioned in the invoice was @ US$5.75 (FOB) and the total FOB value of the invoice was shown as US$ 57500 and the freight costs was shown as US$1200 and the total C F value was shown as US$ 58700. Further scrutiny of the records revealed that the importer had got cleared a consignment against invoice No. LHI1010290001 dated 27.07.2010 vide bill of entry No. 785027 dated 10.08.2010 and had submitted a fake, false, manipulated, fabricated and parallel invoice having the same No. LHI1010290001 dated 27.07.2010 showing unit value @ US$ 1.17 per piece, to customs, and thereby it appeared that the importer had suppressed the true and correct value of the goods. Two other consignments of VLRA batteries imported under bill of entry No. 803525 dated 25.08.2010 and 827979 dated 25.08.2010 were also cleared by declaring unit value as US$ 1.17 per piece. Therefore on reasonable belief that the import of goods had been cleared by misdeclaring the value in contravention of the provisions of the customs Act, 1962 and hence were liable for confiscation. Detention of VRLA batteries was converted into seizure. The seized goods were provisionally released on the request of the importer after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 vide Bill of Entry No. 785027 dated 10.08.2010, but had submitted a fake, false, manipulated, fabricated and parallel invoice having the same No. . LHI1010290001 dated 27.07.2010, showing unit value @ US$1.17 per piece to Customs, and thereby it appeared that the importer had suppressed the true and correct value of the goods. The importer had declared total value for the consignment as US$ 11170 (C F) only against the actual value of US$ 58700. Both the invoices, one which was fake, false, manipulated, fabricated and parallel invoice and the second one which is the original invoice, were compared as below for clarity in matter:- False / fabricated Actual invoice Supplier Shenzhen Leoch battery Technology Co. Ltd., Shenzhen Leoch battery Technology Co. Ltd., Invoice No. LHI1010290001 LHI1010290001 Date July 27, 2010 July 27, 2010 Contract No. LHA10125 LHA10125 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Indore was also requested (office letter F. No. SG/MISC-107/10-11 SIIB(I) JNCH dated 10.11.2010) to convert the detention of 70,956 pieces batteries into seizure. Accordingly, the jurisdictional Central Excise authorities seized 70,935 pieces of battery on 15.11.2010 under panchnama (detained batteries 70956 pieces (-) 21 drawn for samples on 3.11.2010 = 70935 pieces). 12. On 16th October, 2010, officers of SIIB (I) visited the Cyber Forensic Lab., Ground Floor, Directorate of Revenue Intelligence, Mumbai Zone, to secure the electronic data stored in the seized 3 hard discs and one USB drive, without disturbing the data contained therein and create mirror image of the data for carrying out further analysis and investigation with the help of equipment available in the Forensic Laboratory. Out of three hard discs, two hard discs could not be read by the equipment of Forensic Lab., and data contained in one hard disc Sl. No. WXZ 07774085 and one USB drive bearing Sl. No. CEFC MIC D 33193 were created and copied in another portable hard disc under Panchnama drawn. Subsequently, vide panchnama proceedings dated 6.12.2010, the officer visited once again for making attempt to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this document. This document also revealed that true and correct FOB value of two Proforma Invoice - LHA 10124 and LHA 10125 was at US $ 8,42,800 whereas as per the invoice submitted by the importer company, it was only US $ 1,75,200. The above document also contained the details of the present consignment imported under Invoice No.LHI 101029002, against which the appellant had filed B/E. No.803525 dated 25.08.2010 by declaring the unit value of goods as US$ 1.17/-per piece/C F against the actual value of US$ 5.23/FOB per piece. Further analysis of data contained in the pen drive, it appeared to Revenue that the appellant was not only involved in the activity of manipulating the import price but they were also involved in manipulating the local sale price by (on resale in India), by issuing lower sale price invoices to justify their mis-declared import price. Thus, they were evading not only the customs duty but also other taxes like sales tax and income tax. The Revenue, on comparison of the actual price with the price declared and mentioned in false/ fabricated/manipulated invoices, found as under:- S. No. Model Declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Sheva was not voluntary and rather a dictated one. Further, stated therein that he was prevailed upon to state that the value declared at USD 1.17 per piece has been mis-stated, instead of USD 3.5. In his further statement dated 3.12.2010 recorded before the Revenue. Shri Kapil Garg further stated that the imported goods were not manufactured from recycled materials. Further, informed that the value of VRLA batteries depend upon the price of Lead and Plastic (ABS). He further stated that the wholesale price (in India) of 6 volts batteries range from 109 to 130 per piece and of 12 Volts battery from ₹ 352 to 420 per piece. On being asked, how they collected the excess amount when they raised invoice for lower price for local sales, he stated that the balance amount was collected in cash. On being confronted with actual price Inv. No.LHI1010290001 dated 22.08.2010 of Shenzhen Leoch Battery Technology Co. Ltd., China for 10,000 batteries having unit value at USD 5.75 FOB, he admitted that they have been manipulating the unit value while filing bill of entry, to evade the customs duty. Shri Kapil Garg signed on both the invoices in token of having seen and identified as genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of seized goods at JNCH, Nhava Sheva were re-determined as under:- (A) B/E No.803525 dated 25.08.2010 Description Declared Re-Determined 12V7.2AH $1.17(CFR) $5.23 (FOB) Qty. 1000 1000 Total Value in $ $11700 $52300 (FOB) Freight - $1180 Insurance 1.125% $3.89 $588.37 Total CIF $11700 $54068 Assessable Value ₹ 5,59,721 ₹ 25,85,721 Duty 1,50,278 6,94,233 Duty attempted to be evaded 5,43,955 (B) B/E No.827979 dated 07.09.2010 Description Declared Re-Determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar modus of mis-declaration of value to evade customs duty. Out of 68 consignments, 62 were imported and cleared through JNCH, Nava Sheva and rest 6 consignments, which were imported and cleared through ICD, Pithampur, Indore. For the consignments imported through JNCH, Nava Sheva, a separate show cause notice had been issued demanding differential duty of ₹ 3,46,78,022/-. The present show cause notice relates to 6 consignments imported through ICD, Pithampur, from the two Chinese supplier, Power roc Company Ltd. and M/s. Suqian Yongda Imp. Exp. Trade Co. Ltd. The details of bills of entry are as follows:- Supplier, M/s POWER ROC.CO.LTD. B/E No. Date Invoice No. Date Model Qty. Unit 101167 24.01.07 PROC-KU- 08.12.06 6V4.5 22600 US$0.25 101168 24.01.07 PROC-KU 30.11.06 6V4.5 22600 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as aforementioned. Total 67,800 pieces were imported in the 3 containers considering the total payment of US$ (16898 + US$75747) = US$92,645 (C F) + freight, USD 1845. For the quantity of 67,800 pieces, the unit value comes to US$ 1.339 or 1.34 per piece. 28. Investigation revealed that the importer apart from the regular payment through their legal banking channel, had made the following payments (at the material time, or above three imports) through other sources based in Canada Dubai, Sri Lanka to their supplier, M/s. Power ROC:- (a) Wire Transfer dated 27.12.2006 through Mr. Anil Kingrani of US$25000 (b) Wire Transfer dated 15.01.2007 through A1 Fardan Exchange of US$23262. (c) Wire Transfer dated 29.12.2006 through HSBC, Indonesia of US$ 15000. (d) Wire Transfer dated 16.10.2006 through Mr. Anil Kingrani of US$50618. (e) Shri Kapil Garg s E-Mail dated 21.12.2006 to Mr. Anil Kingrani asking him to transfer $ 60747 to Power ROC Co.Ltd. (f) Ms. Kitty (supplier) vide E-Mail dated 4.1.2007 informed Shri Kapil Garg that they had received $ 14980 $ 25000 by the end of last month. (g) Mr. Kapil Garg s E-Mail dated 22.12.2006 to supplier th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT. (ii) Shri Kapil Garg s E-Mail to Shri Koppula Laxman Murthy dated 16.10.2007 vide which price of 6V4.5A/h battery (740 gms) was quoted @ ₹ 125+ Freight + C Form. (iv) Shri Kapil Garg s E-mail to Shri Chittrapal B. Seth dated 01.04.2008 vide which he asked to arrange pending payment of ₹ 684925/-, out of which invoice amount was ₹ 193125 balance of INR 491800/- had to be remitted by cash. (v) Shri Kapil Garg s E-mail to Shri Koppula Laxman Murthy dated 12.10.2007 quoting price of 6v/4.5 A/h battery @ 126 +CST + Freight. (vi) Shri Kapil Garg s E-mail to Shri Koppula Laxman Murthy dated 09.10.2007 mentioned that they charged @ ₹ 280/pc for 12V4.5Ah battery. (vii) Shri Kapil Garg s E-Mail to Shri Koppula Laxman Murthy dated 13.08.2007 to settle their total outstanding of ₹ 6,64,174/- out of which ₹ 3,46,742/- to pay in cash. (viii) Shri Kapil Garg s E-mail to Shri Koppula Laxman Murthy dated 29.10.2007 vide which informed that for new order of 5000 pieces total outstanding amount is ₹ 638750 out of which the cheque amount will be ₹ 154500 ₹ 231750= ₹ 3,86,250/- the balance amount i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 22.30/- to ₹ 30/- per piece 12V batteries ₹ 88.24 to 100/- per piece, recovered from the importer s seized records. (xvi) The actual value, local sale invoice purchase orders showed unit value also retrieved from seized record, as detailed below: (a) Invoice No. 759 dated 21.09.2009 for 1000 pieces of 6V battery to M/s Satwik Scales Industries having unit value @ ₹ 135/- piece. (b) Invoice No. KIL/DIS/B/38 dated 31.10.2009 for 2000 pieces of 6V battery to M/s Ammini Energy System Pvt. Ltd., having unit value @ ₹ 135/- pieces. (c) Purchase order No. PO/1017/08-09 dated 31.05.2008 given by M/s Ammini Energy System Pvt. Ltd. to the importer for 20 pieces batteries of 6V4.5 Model @ ₹ 140/-. (d) Purchase order No. PON-002725 dated 5.9.2008 given by M/s Ammini Energy System Pvt. Ltd. to the importer for 100 pieces of batteries of 6V4.5 Model @ ₹ 150/-. (xvii) The importer themselves purchased these batteries locally at price showing 4-5 times higher (than the false price declared by them) as per their Local Purchase Invoices. (a) Purchase of I2V7.2 Battery 890 pieces from M/s Empire Batteries @ ₹ 402/- un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Total assessable value of 25000 pcs of battery =₹ 19,32,175/- (vi) CIF value for 25000 piece =₹ 19,13,045/- Thus the unit value after allowing deduction on account of expenses profit other unexplainable expenses, arrived at ₹ 76.52 or in US$1.64/piece (CIF). Similarly the calculation for CIF value and assessable value for Model 6V5Ah made as under: (i) Thus the total sale value of 25000 pics. X ₹ 121 arrived at ₹ 30,25,000/- (ii) Less Total expenses (₹ 412779X5000/25000) =₹ 2,06,390/- (iii) Thus the value including profit for 25000 pieces was to be =₹ 28,18,610/- (iv) (iv) Less The importer, however claimed just profit only 3-5% but as certain unexplained expenses are involved in such transaction deduction on a/c of profit other such expenses on higher side can be deemed @ 20% = ₹ 4,69,768/-. (v) Total assessable value of 25000 pcs of battery =₹ 23,48,812/- (vi) CIF value for 25000 pieces = ₹ 23,25,586/- From the above it was seen that in case of 6V battery expenditure per piece was coming to be ₹ 8.26 per piece on account of duty, freight, tax etc. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the Bank for your payment of US$15089 from Colombo, but there is problem of Account No. ..............The E-mail communications between Ms. Elana Zhang (Supplier) Power ROC Co. Ltd., China (Importer) and the appellant for the period 9.3.2006 to 30.03.2006, negotiating the prices at US$ 1.27 for 6445 batteries. 35. Remittance of US$5618 to the supplier - Power ROC Co. Ltd. through Mr. Anil Kingrani vide supplier s email dated 19.10.2006, on being confronted with these facts or allegations, Mr. K. Garg reiterated that the entire system was governed from the suppliers and he was being forwarded wire copies, just for reference. On being confronted with e-mail communication during 21.09.2006 to 11.02.2006 between the appellant and the Power ROC Co. Ltd., quoting the unit price US$1.34 for 64,090 pieces for 6 V battery, Mr. K. Garg gave a vague reply that he does not remember the exact details. On being confronted with email of the appellant dated 20.04.2007 to the supplier Power ROC Co. Ltd., wherein they mentioned that they plan to book for container of 6 V 4.5 AH @1.85 USD, which was for 90,400 pieces = USD 1,67,240 and one container of 12 V /7.5 AH (9000 x USD 5.5) = US$49,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Commissioner, JNCH, Nhava Sheva after the case was duly investigated by SIIB there. As per para C of grounds of appeal, the appellant vide their interim reply to show cause notice dated 08.08.2011 filed during hearing held on 09.11.2016 in respect of the said show cause notice, before the Commissioner of Customs, JNCH, they had requested the Commissioner to provide non-relied documents in respect of the said main show cause notice dated 08.08.2011. The appellants have never mentioned that they were not provided the relied upon documents. Therefore, I find that the appellants have been provided all the relied upon documents along with show cause notice issued at JNCH, Nhava Sheva which are also relied upon documents in present show cause notice. In view of this, I do not agree with the appellant s submission. 39. Being aggrieved, the appellant are before this Tribunal. 40. Heard Shri Ashok Singh, ld. Advocate for the appellants and Shri Rakesh Kumar, Authorised Representative for the respondent/Department. 41. Ld. Advocate for the appellant urges that in case of the three imports made from Power Roc Co. Ltd., China vide bill of entry nos.101168/69/67, all dated 24.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue for import of batteries from Power Roc. Company are not at all comparable under Rule 5. Since the goods in question are different as the goods imported from Power Roc. Company are 6 V 4.5 SLA, whereas the goods imported from M/s Suquian Yongda Imp. Exp. Trade Co. Ltd. are 6 V 4.2 AH and 6 V 5.5 AH. Further, there is time gap of 3 years, as the bill of entry of Power Roc. Company is of Jan., 2007, whereas the bill of entry of Suquian Yongda Imp. Export is for the period March to October, 2010. It is further urged that with reference to local purchase/sale price by the appellant is mis-placed as stated by Shri Kapil Garg. That such local sale and purchase of batteries was under warranty and guarantee, whereas the batteries imported by them are without warranty and guarantee. 44. It is further urged that so far as the reliance placed on the import cost sheet retrieved from the seized electronic record, on the basis of which, the declared value, for 6 V 4.2 AH and 6 V 5 AH in respect of the bills of entry of Feb., 2010 at ₹ 75.37 and ₹ 93.02 respectively is taken, the entire calculation is based on assumption. The Revenue for calculation in order to arrive at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drive and hard disc is also not reliable for the reasons that these were not made available to the Adjudicating authority for adjudication. The Investigating Authority denied the availability by stating that the evidence is untraceable. Further, it is urged that the Court Below ignored the vital facts that the appellant has entered into the contract for supply of batteries in bulk about 1 lakh or more in each purchase contract and as such, enjoyed the discounted price. 49. Opposing the appeal, Mr. Rakesh Kumar, ld. Authorised Representative for Revenue urges that the transaction value has been rejected correctly in view of evidence being parallel invoice, evidence of payment through non-banking channel, wire transfer, cost of lead in international market, which form major cost component of the batteries and also the admission made by the Director of the appellant in his statements on different dates. It is further urged that the market survey had to be undertaken after the appellant was granted opportunity to satisfy the transaction value as claimed by them. Although the market survey was done at, Nava Sheva, Mumbai in respect of 12 V batteries and in the survey against the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Director, Shri Kapil Garg in the statement recorded under Section 108 and (vii) evidence of wire transfer (non-banking channel). 52. Ld. Authorised Representative further urges that the transaction value has been rightly rejected following the principles in the case of Eicher Tractors 2001 1 SCC 315 laid by the Hon ble Supreme Court. He further urges that relevance of Rule 10 A has been emphasised by the Apex Court in its judgement in the case of Indus Communication Ltd. Vs. CC, New Delhi. 53. He further urges that the appellant in the facts of the present case has done fraud and forgery by preparing parallel invoices to suppress the transaction value for evading customs duty. The revaluation has been done on the basis of the parallel invoice found (although in respect of other bills of entries), which is corroborated by the confession and admission of the Director, Shri Kapil Garg. It is an accepted principles of law that whatever has been admitted need not be proved. Reliance is placed on the ruling in the case of CCVS Systems Components - 2004 (165) ELT 136 (SC). It is further urged that sofar as the retraction statement is concerned, the same is not reliable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Further, it is found that there is no specific correlation with the bills of entry under dispute with the alleged evidence of wire transfer. Further, we find that there is no investigation or confirmation from the persons, whose names have appeared from the email for wire transfer. We further find that reliance has been made on the import cost sheet, which was retrieved from the seized hard disc /pen drive. The conclusion has been drawn by the Revenue from the cost sheet on the basis of assumption and presumption. The cost sheet reflects the invoice value, which has been remitted through normal banking channel along with other expenses. The suppression of transaction value would also have been reflected in the said cost sheet, which is not the case. The NIDB data is in respect of the import of 12 V batteries by other importers, whereas in the present case, the appellant has imported 6 V batteries. Hence, the NIDB data cannot be relied upon. Further, in respect of the batteries imported from M/s.Shenzhen Leoch Battery Technology, China, we find that the demand of differential duty is based upon the allegation that the appellant has under-valued the other consignments. Hence, they ..... X X X X Extracts X X X X X X X X Extracts X X X X
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