TMI Blog2022 (6) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... reconcilability with invoice and, therefore, have the value therein rejected for assessment. There is, however, no finding that, physically and as presented, the goods are not parts even if they add up to finished goods upon assembly. The determination of the price itself is fraught with contradictions and presumptions. The adjudicating authority has relied upon appraisal of an interested party, viz., the domestic entities dealing with the brands that, allegedly, had been procured by the importers at Singapore - The computation, under the authority of best judgement in the impugned order, does not bear any resemblance to the framework within which such valuation should be re-determined. Consequently, the revised valuation is set aside. The critical aspect for clubbing rests entirely upon the establishment of fraud and deliberate subterfuge for, admittedly, nefarious purpose; the inculpatory statements of the parties to those transaction was found to suffice for holding that the decision of the Tribunal setting aside the clubbing had erred in placing reliance on an earlier decision of the Tribunal which, while finding affirmation by the Hon ble Supreme Court by disting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h recovery of duty under section 18 of Customs Act, 1962, is the appeal of Commissioner of Customs (Import), Mumbai seeking the confirmation of recovery instead under section 28 of Customs Act, 1962 along with interest as applicable under setion 28AB of Customs Act, 1962. 2. Impugning the same adjudication order are the appeals of M/s Arigato and Obligado Merchandise Pvt Ltd and of Mr Devendra Ahuja for M/s Ankit Enterprises who, together with M/s Harshul Enterprises, had been charged with import of television sets, video compact disc (VCD) players and music system in disassembled form, as well as that of Mr Ramesh Mehta, the Director in the company. Under challenge are the confirmation of differential duty of ₹ 22,76,475, fine of ₹ 12,50,000 imposed under section 125 of Customs Act, 1962 in lieu of goods held as liable for confiscation under section 111(m) of Customs Act, 1962 and penalty of ₹ 2,00,000 each on the sole proprietor and the company and ₹ 1,00,000 on the Director of the company 3. The allegation in show cause notice dated 30th September 2005 flow from bills of entry no. 352399/28.04.03 and no. 352403/28.04.03, declaring electronic compon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turers M/s. Sony India Pvt. Ltd was contacted and their Engineers were called M/s. Sony India Pvt. Ltd vide letter dated 24.07.04 informed that they had fixed up the schedule of their Engineer in the first week of August, 2004. On 10.08.04 S/Shri Suryakant Walawalkar, Assistant Manager (Logistic) and Prashant Tolamatti, Regional Service Engineer of M/s. Sony India Pvt. Ltd, visited the A warehouse of the Customs In the presence of .the samples of the goods imported by M/s Ankit Enterprises and M/s Arigato and Obligado Merchandise Pvt. Ltd were examined by the Sony s Engineer. After examination he opined that in case of TV and VCD players except for the cabinets all other components were available that would make the complete units. In the case of Music System except for the speakers and cabinets all other components were available that would make the complete units of the Music System. xxxxx 51. Statements of employees of M/s Sai Dutt Clearing Agency show that Shri A. K. Dham gave the false statement on 6.08.04 that is employees had stamped and signed as authorized signatory for M/s Ankit Enterprises and M/s Arigato and Obligado Merchandise Pvt Ltd. As same person had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed (or failing to be classified as complete or finished by virtue of this rule), presented unassembled or dis-assembled . Thus, for purpose of clearance the impugned goods have to be classified as complete unit of TV, VCD Player and Music system and therefore classification is required to be determined accordingly under tariff headings CTH 85281213, 85281214, 85281215 and 85219090 and 852790 of the Customs Tariff Act, 1975. As the goods have been grossly misdeclared, the declared value also becomes suspect xxxxx 56. Therefore, impugned goods can only be assessed by resorting to best judgement method under rule 8 of the Customs Valuation Rules, 1988. 57. To arrive at assessable value, the price of M/s Sony Pvt. Ltd in Singapore were therefore studied and compared with the MRP of the identical goods in India. On comparing the prices of the four items where both Singapore price and MRP are available, it is found that MRP is on average 73.12% more than Singapore price. Since Singapore price of Sony TV KV-XJ 29 M 50, KV-XG 25 P 50, and Samsung VCD Player Z-850 could not be ascertained the same ratio was applied to determine the value of these three models in Singap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for assessment, of Customs Act, 1962, and within section 47 of Customs Act, 1962 enjoining the assurance of correct duty having been collected and the satisfaction that the goods are not prohibited for import. Hence, the facts described in the impugned order, even if established, will have to have a bearing on the law relating to assessment and clearance for detrimental consequences to follow. 7. We have heard Learned Counsel for the appellants and Learned Authorized Representative, both of whom have, at length, attempted valiantly to convince us of their perspective of the impugned dispute; not unnaturally, these have been built, both for and against, upon the perspective offered by the original authority in the impugned order. We have no doubt that a plodding start from the zero point , or from first principles, may appear less glamorous than jumping of the deep end at some point along the axes, or even within the quadrant, but there is, at least, the assurance that the path taken is straight and true. Therefore, we will revert to the arguments placed before us, including the citations, only if warranted as we proceed to resolve this issue by reference to the law which, in ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority of section 14 of Customs Act, 1962 and with the latter, held judicially, to be not controlled by the former. The former necessitates placement, and so determine rate of duty legislated for the tariff item corresponding to the description conforming, most accurately, with the description of imported goods, in the First Schedule to Customs Tariff Act, 1975; intended for universal application, the classificatory regime is governed by rules of engagement enshrined in the provisions of Customs Tariff Act, 1975 and its several guidelines, inter alia, General Rules for the Interpretation of the Import Tariff. Valuation, on the other hand, is governed by the Rules notified under the authority of section 14 of Customs Act, 1962 for application to situations in which the conceptual framework or the gold standard , as the case may be, is not discernible in the declared price. Even if the classificatory engagement requires parts - taken together - to be deemed to be finished products for deployment of appropriate rate of duty in assessment, such consummation does not, save under the grace of section 14 of Customs Act, 1962 or the Rules framed thereunder, have any bearing on va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aluation is set aside. 13. Turning now to the issue of classification of the impugned goods, covered by five bills of entry, as the finished products that would emerge upon assembly, we find that the adjudicating authority has, while rejecting the several case laws cited by the noticees in the proceedings before him, placed reliance upon the decision of the Tribunal in Monica Enterprises v. Collector of Customs, Madras [2002 (149) ELT 1264 (Tri-Del)] and in Commissioner of Customs, Indore v. Hindustan Motors Ltd [2003 (156) ELT 155 (Tri-Del)] besides an order of the Settlement Commission. 14. Learned Authorized Representative has, while placing these decisions on record, also drawn attention to the affirmation of these by the Hon ble Supreme Court, and further cited the decisions of the Hon ble Supreme Court in Commissioner of Customs (Import), Mumbai v. Pundrick Ravindra Trivedi [2015 (322) ELT 812 (SC)] which had set aside the finding of the Tribunal in the matter relating to clubbing of clearances by distinguishing the applicability of the decision of the Hon ble Supreme Court in Commissioner of Customs, New Delhi v. Sony India Limited [(2008) 13 SCC 145] that had upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, we find full justification in the said submission is paid by Mr. Adharyu. What was found was that all the parts down to the last screw, were imported to make complete sense. There was no rebuttal by the respondents to the aforesaid clinching evidence. On the contrary, there are clear admissions by Mr. Patel and Mr. Soni, the alleged proprietors of these two firms, as well as Mr. Trivedi in their statements recorded under Section 108 Customs Act. 13. What is most important, which nails Mr. Trivedi Is his own statement. He has accepted the aforesaid arrangement as disclosed by Mr. Patel and Mr. Soni and admitted that it is he who was calling the shots and, in fact, was actual importer of the material in question He also stated that these goods were offered to him in SKD condition and he imported the same vide different Bills of Entries for tax management purpose. xxxx 18. In the light of these facts backed by solid evidence, the Tribunal committed grave error in ignoring these facts and allow the appeal by simply relying upon the case of Sony India Ltd. (supra). 19. We may point out that the aforesaid decision of the Tribunal in Sony India Ltd. (supra) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters and intention of trading. In re Monica Enterprises, the intent of the appellant therein, in a strict and rigorous regime of the Import and Export Policy, 1985-88, had been taken note of by the Tribunal while concurring with the confiscation of goods and imposition of penalty as decided by the original authority; however, valuation became a point of dispute therein only owing to the discovery of undeclared parts and not as a consequence of interpretative deeming. The inapplicability of this decision to the facts of the present case did not seem to have occurred to the adjudicating authority. 20. The impugned order has rendered a finding that the goods, even if imported by different entities, were sought to be cleared, in concert with one another, after disassembling in Singapore. There are obvious gaps in this tale that the principle of preponderance of probability may not bridge. The conclusion that 84. In the instant case all the consignments have come virtually at the same time, i.e. within gap of 3 days. Had they been presented together before the customs officer the subterfuge could have been easily detected. The 3 importers deliberately chose to file Bills of En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision, these are in the form of parts and components requiring assembly which, being excisable, would yield duties of central excise that would, otherwise, not be leviable. It certainly cannot be the case of the adjudicating authority that the import of such goods, if levied to duties of customs by recourse to a deeming provision, would again be charged to duties of central excise thereafter. 22. Customs Act, 1962 is not a law of morality; nor is it a law of property. It is intended to provide a framework and procedure for asserting the constitutional jurisdiction assigned for levy of duty on imported goods. The consistent thread in the several decisions cited by both sides is the applicability of the framework for assessment and permitting reconstructed depiction solely on evidence of attempted subterfuge. A motive must clearly be proved. The motive should also display disproportionate windfall from such subterfuge. Neither is on record here. The goods have been imported, and presented, separately and independently; no evidence, other than conjecture about the conspiracy to disassemble branded products, is on record. None of the judicial decisions approve the contrived com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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