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TMI Blog2008 (12) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ces were verified by DRI through Indian High Commission at London which revealed that M/s. Plastotex had grossly undervalued the polystyrene sheets imported by them from M/s. SIBU. Enquiries revealed that Plastotex and SIBU had an understanding, whereby SIBU was required to issue invoice to Plastotex indicating only 25% of the actual value of the goods and the remaining 75% was to be paid by Plastotex separately by Telegraphic Transfer (TT). The attested copies of the invoice indicating the actual value against each of the 8 invoices were obtained, which indicated that the price against each invoice declared to the Indian customs authorities was 25% of the total value. The Indian High Commission also obtained a report from Austrian customs department which stated that the invoice submitted by Sanghvi to the Customs authorities on verification did not match with the documents of SIBU and that SIBU had claimed that the undervalued invoices were issued at the request of the Indian customer and it was the pre-condition by the Indian buyer for doing business with them. A copy of fax message No. 317 was also received through Indian High Commission which was sent by SIBU to Plastotex. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs. 5. The ld. Advocate for the appellant submits that the entire case has been, made out on the basis of a report received from the Indian High Commission indicating that the supplier SIBU was undervaluing the goods by issuing invoices indicating only 25% of the actual value at the instance of Plastotex. He took us through the said report of the Indian High Commission which did say that the enquiries conducted in Austria revealed that Plastotex had grossly undervalued polystyrene sheets imported from SIBU and SIBU have claimed that the goods were undervalued at the request of the Indian customer and the report has reference to a fax dated 30-3-2000 from SIBU which says that the official price i.e. 25% of the total value comes through bank account and the remaining through TT. The learned Advocate submitted that this very fax also mentions that Austrian customs authorities have reported that the Indian company paid only the undervalued price with one exception and SIBU is still waiting for the Indian company to settle the balance. It was his submission that once the fax specifically states that but for one case of which no details have been given, the payment has been made to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was also invited to some quotations obtained by them from suppliers during 1998-99, wherein the price varied from $4.20 to $5 per kg, some of which were FOB. It was submitted that department has not conducted any enquiries through Trade magazine and others which could have revealed that the imported goods were being sold in the international market at the price declared by them. Further as regards the 10 consignments cleared during the year 1998, there is no evidence whatsoever either in the form of enquiry or in the nature of statement or anything to prove that the goods were undervalued and therefore in the absence of the same, the charge of misdeclaration cannot be alleged against them. The order is therefore required to be set aside on these counts. 7. Lastly, it was submitted that some goods valued at Rs. 11,34,000 were seized from them which consisted of polystyrene sheets as well as rubber sheets. However, in respect of rubber sheets valued at Rs. 4,35,000/- no charge has been made out in the show cause notice nor there are any findings to that effect in the Commissioner's order. In view of this the rubber plastic sheets could not have been confiscated and accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of seeing such fax he submitted that it may have remained with Shri Sanghvi, the director. There is a letter dated 21-4-00 from Plastotex to the supplier acknowledging the receipt of the fax and promising to start making payment from May and finish in June 2000 with interest. He apologised for the talk on telephone and reiterated his relations as a brother. Reference was invited to fax no. 769 dated 3.5.99 wherein SIBU had send reminder for payment against invoice nos. 2058/24-9-98, 3048/23-3-99, 3609/15-5-99 which also shows that the value declared to the customs was 25% of the total value shown in these faxes. These faxes also states that in such a game of undervaluation both party should have confidence in each other and play a fair game. All these evidence conclusively prove that the goods were undervalued to the extent of 25%. 9. As regards the plea that the imports from other three persons were not checked, he referred to the finding of the Commissioner in para 28 wherein he says that the imports by other three importers were that of P.P. sheets as against polystyrene sheets imported by them and the price of polypropylene imported by the three importers cannot be compared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the price also differs for different sizes of the polystyrene sheets and they are sold by size rather than weight. The price also vary from $2.74 to $4.44 which itself establishes that the price is based on the quality of the polystyrene sheets. This also has been confirmed by the appellant in their reply wherein they have referred to some trade journals quoting prices of different finishes of the polystyrene sheets and vary from Rs. 50/kg to Rs. 1200/kg. Strangely in their reply to the show cause notice they have referred to the product as PP sheets and names some importers who have imported similar consignments of PP Sheets. However, it was admitted that PP sheets was wrongly mentioned in respect of their product as the same was polystyrene sheets. The so-called contemporaneous imports referred to by them without giving the price etc. was of PP sheets and not of polystyrene sheets and therefore, the two could not be compared. Though the appellants have been contending that similar imports have been made by others, he failed to give the price at which such imports, if any, have been made and the quality thereof. The Commissioner in his order has said that he could not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternational price remained the same during both the periods. Further, the price of the polystyrene sheets varies according to the quality and it is not clear as to which qualities have been imported. Duty cannot be demanded on the basis of the presumptions and conjectures in the absence of any evidence of any nature. In view of this demand relating to these 10 consignments amounting to Rs. 6,00,610/- as reflected in the Annexure B of the show cause notice is set aside. Since this was the case of suppression/misdeclaration of fact with an intent to evade duty imposition of penalty under 114A is also upheld. However, since the demand has been reduced from Rs. 19,11,797/- to Rs. 13,11,187/- penalty under 114A is also reduced to Rs. 13,11,187/-. Penalty on C. Sanghvi is however upheld as he was the person concerned with misdeclaration of price etc. 12. As regards confiscation of goods valued at Rs. 11,34,000/- we find substance in the appellant's contention that the goods seized also comprised of rubber plastic valued at Rs. 4,35,000/- against which there is no charge in the show cause notice nor any finding in the order-in-original. These goods could not therefore have been confiscat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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