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TMI Blog2024 (5) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... ics Pvt. Ltd. [Banke Bihari] and two Bills of Entry No's. 5292485 and 5632744 filed by M/s. Zippo Mobiles Pvt. Ltd.[Zippo Mobiles] be combined/ clubbed and assessed under Customs Tariff Item [CTI] 8470 10 00 of the Customs Tariff Act, 1975 [the Tariff Act] as calculators in Completely Knocked Down [CKD] condition; (ii) Confirmed the demand of anti-dumping duty in respect of the aforesaid four Bills of Entry and its recovery from Banke Bihari ; (iii) Confiscated the goods imported under Bill of Entry No. 5291267 with an option to Banke Bihari to redeem; (iv) Held that the goods imported under Bills of Entry No's. 5292485, 5716603 and 5632744 are liable for confiscation under section 111(m) of the Customs Act, 1962 [the Customs Act]; (v) Imposed penalty upon Banke Bihari and Zippo Mobiles under sections 114A and 114AA of the Customs Act; and (vi) Imposed penalty upon Zippo Mobiles under section 112(a) of the Customs Act. 3. It transpires from the record that Banke Bihari is engaged in the import and trading of various electronic items namely diodes, parts of remote control and parts of calculators. It had filed a Bill of Entry No. 5291267 dated 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 10. A show cause notice dated 22.04.2019 was issued to all the appellants, including Banke Bihari and Zippo Mobiles, calling upon them jointly and severally to the show cause why anti-dumping duty should not be imposed in respect of goods imported through Bill of Entry No's. 5291267, 5292485, 5716603 and 5632744. The appellants were also called upon to show cause as to why the declared transaction value of DVB remote and diodes in CKD condition should not be rejected and should not be re-determined. Proposals were also made for imposing penalties under various sections of the Customs Act. 11. The appellants filed a reply to the show cause notice stating inter alia that calculator parts were imported for trading purposes only and it cannot be urged that complete set of calculators could be formed and that the enhancement of value of DVD remotes and diodes was not correct. 12. The Principal Commissioner, however, passed the order dated 16.01.2020 holding that the parts of calculators imported under the four Bills of Entry by Banke Bihari and Zippo Mobiles should be clubbed as calculators in CKD condition and so anti-dumping duty shall be imposed upon the calculators in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ashok Udhwani is the Director and other plastic parts (front and back covers) are imported in the name of M/s. Zippo Mobiles, where his brother in law Shri Ashish Kumar is the Director. The facts therefore clearly indicate that Shri Dinesh Udhwani, who was fully aware of the levy of anti dumping duty on import of calculators from China, placed an order for parts of calculator from a common supplier and imported the consignments under different Bills of Entry through the companies controlled by his father and his brother-in-law. The nature of items and their almost matching quantities also support this fact. For the first two consignments even the commercial invoice number in the Bills of entry was found to be same. M/s. BBEPL, along with other parts, has also imported poly bags colour boxes and two pressing machines for calculators. M/s. Zippo mobiles has also imported cartons for calculator along with front and back covers. This clearly indicates that the intention of said import was for the purpose of assembly of complete calculators. The parts like front and back cover for calculators would be for specific models of calculator and cannot be possibly traded in market a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32744 dated 19.03.2018 of M/s. Zippo Mobiles Pvt. Ltd.) has been found to be of complete calculators in CKD condition, as per Rule 2(a) of the General Rules of Interpretation." (emphasis supplied) 15. The Principal Commissioner then examined the undervaluation of DVB remote and led diodes and recorded the following findings: "43.5 Thus, as regards the allegation of undervaluation of DVB remote in CKD under Bill of Entry No. 6460501 dated 21.05.2018 filed by M/s Banke Bihari Electronics Pvt. Ltd., I find that no model number was declared on the Bill of Entry. However when seen from the packing list, the model of the DVB remote (both the large and small size) was found to be '703'. Shri Dinesh Udhwani admitted in his statement dated 15.11.2018 that they had received goods as per their order i.e. 703A & 703B and also accepted after seeing the packing list that it appears that models 703, 703A & 703B of DVB remote were the same. I find that the values for the parts of DVB remotes declared in subsequent Bills of Entry Nos. 6675435 & 6675908 both dated 05.06.2018 which have been filed after the interdiction of said Bill of Entry No. 6460501 dated 21.05.2018 have been substantially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are liable to confiscation under section 111(m) of the Customs Act, 1962." 17. Shri Piyush Kumar, learned counsel for the appellant assisted by Ms. Reena Rawat and Shri Himanshu Yadav made the following submissions: (i) Banke Bihari and Zippo Mobiles are two distinct entities incorporated under the Companies Act and, therefore, it was not permissible to club their imports purchased and cleared on payment of duty with their own funds; (ii) The Principal Commissioner committed an error in relying upon the judgment of the Tribunal in Samay Electronics (P) Ltd. vs. C.C. (Import)/(General), Mumbai [2015 (328) E.L.T. 238 (Tri.-Mumbai)]; (iii) The finding of the Principal Commissioner that the goods imported under the four Bills of Entry are calculators in CKD conditions is perverse because neither Banke Bihari nor Zippo Mobiles had imported keypads and plastic buttons which constitute vital parts of a calculator; (iv) In any view of the matter, anti-dumping duty could not have been imposed on the basis of the Notification dated 29.05.2015 as the said Notification does not provide for levy of anti-dumping duty on calculators in CKD condition or parts thereof; (v) The Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants and the learned authorized representative appearing for the department have been considered. 20. The issues that arise for consideration are: (A) Whether the Principal Commissioner was justified in clubbing the consignment of parts of calculators imported by Banke Bihari and Zippo Mobiles through the four Bills of Entry, two dated 20.02.2018 and two dated 24.03.2018 and 19.03.2018; (B) Whether the goods are leviable to anti-dumping duty under Notification dated 29.05.2015 read with rule 2(a) of Interpretative Rules and recoverable from Banke Bihari under section 28(4) read with section 28(8) of the Customs Act; (C) Whether Banke Bihari had undervalued DVD remotes in CKD imported under Bill of Entry No. 6460501 dated 21.05.2018 and Diodes under Bill of Entry No. 6675087 dated 05.06.2018 and whether the rejection of declared assessable value and re-assessment thereof by the Principal Commissioner is correct; (D) Whether the differential duty, as confirmed by Principal Commissioner, is sustainable; (E) Whether confiscation of goods and imposition of penalty ordered by Principal Commissioner is sustainable. 21. Each of the aforesaid five issues are considered sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtons for calculator with front and back covers. The Principal Commissioner was, therefore, justified in recording a finding that the intention was to assemble the calculators from the parts that were imported. Infact, it is also clear that Zippo Mobiles had never imported the parts and that the two consignment of plastic part for calculators arranged by Dinech Udhwani were the first import. 23. It is, therefore, more than apparent that Banke Bihari had imported parts of calculator through Bills of Entries so as to assemble the parts to form the calculator only to avoid anti-dumping duty. B 24. The contention of Banke Bihari that the parts imported by them do not have the essential character of a calculator is not correct as all the essential parts of the calculator have been imported under the four consignments. The parts imported by Banke Bihari inter-alia contain PCB assembly (having in built cell bracket) and button cell for calculator. The impugned button cell is found to be compatible with the PCB assembly imported in the Bill of Entry as the same fits in the cell bracket present at the back side of the PCB assembly. The representative sample subjected to test checking ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponding tariff items mentioned against them. Section 9A forms part of the Customs Tariff Act and therefore, the Rules of Interpretation, which is an integral part of the Schedule to the Customs Tariff Act would apply in respect of the levy under Section 9A as well. Further as per Rule 2(g) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the expression "article" has the meaning assigned to it in the Customs Tariff Act, 1975. Rule 2(a) of the General Rules of Interpretation which is an integral part of the said Act defines the meaning of the term "article". Thus as per the statutory provisions relating to anti-dumping duty, the said levy would apply not only to complete articles but also to incomplete articles or articles, unassembled or disassembled, if as presented the incomplete article has the essential character of the complete article. In other words, the scheme of levy of anti-dumping duty under the Customs Tariff Act, 1975, does not envisage or prescribe a separate set of principle of classification for the purposes of the said levy. The General Rules of Interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation. They contain the commercial invoice and packing list in respect of Bill of Entry filed by Zippo Mobiles. The date wise details of item description, cartons, quantity, unit price and value has been mentioned. The items DVB remote and LED diodes figure in these pages. The summary of container numbers is also mentioned. The said pages also have summary of payments made and payments due and, therefore, indicate the transactional nature of the entries. On being shown Dinesh Udhwani agreed that the details like description, date and quantity is similar to the details in their Bill of Entry/Invoice/Packing list but could not explain the price difference. He was not only evasive in his response but also claimed that the documents cannot be understood by him as they were partly in Chinese. 28. As regards the allegation of undervaluation of DVB remote in CKD under Bill of Entry No. 6460501 dated 21.05.2018 filed by Banke Bihari, it was found that model number was not declared in the Bill of Entry. However, when seen from the packing list, the model of the DVB remote (both the large and small size) was found to be 703. Dinesh Udhwani admitted in his statement dated 15.11.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account. When asked to explain, Dinesh Udhwani admitted that the quantity, description, date were matching with the invoices/packing list with Bills of Entry, but he feigned ignorance about the document and denied any connection with the imports. These documents recovered from his email, along with other documents like commercial invoices from Zippo Mobiles indicating details of containers related items and value, payments made and due, cannot be discarded as not related to imports. It also appears from the data collected during the investigations that no other firm had imported from the Chinese supplier M/s Jiangxi MST Technology Co. Ltd. Existence of the email account [email protected] appearing in the above mentioned documents retrieved from email [email protected] also substantiates that the documents were obtained from the same Chinese supplier i.e. Jiangxi MST Electronics Technology Co. Ltd. Thus, the declared value of said high lumin LTD Emitting Diode (5MM (Red, Green-S, Blue-S, White, White-S, RG-S, Blue, White-0.25w, White-0.75W) under Bill of Entry No. 6675087 dated 05.06.2018 is not correct and was correctly rejected in terms of rule 12 of the 2007 Valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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