TMI Blog2000 (11) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and for such other order deemed fit and proper. 2.The brief facts of the case are that the appellant Ramesh and Anil K. Nebhnani are partners of Akash Enterprises, which had imported 5 consignments of fur fabrics of 32336.5 yards, having the declared value of Rs. 15,30,325 CIF, and filed 4 bills of entry for 4 consignments for clearance under DEEC, with declared description of "artificial fur lining" declaring the unit price as 1.5 US $ per yarn. On the basis of the intelligence regarding the under-invoicing, the residential premises of the importer were searched by the officer of the DRI and recovered fax messages exchanged between the foreign supplier and the importer, and incriminating documents revealing that the appellant Anil Nebhnani booked the goods including fur print rainbow and tiger of good quality at USD 5.65 per yard with the supplier M/s. Puerto Rico Investment Ltd., Taiwan, and regarding second quality, an offer of USD 4 per yard as against the price of USD 5 per yard quoted by the supplier under the fax dated 8-2-1995, under the fax dated 9-2-1995, the supplier giving the factory price of f.o.r. Hong Kong origin varying from USD 4.65 to 6.80 per yard dependin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 488/94 12058.50 41826.00 The values are worked out on the basis of the price quoted in fax messages for different grades. 500/94 12550.00 43118.30 513/94 5715.00 19050.00 The enquiries conducted with the original licence holder revealed that they had not used artificial fur fabrics in the manufacture of resultant export product and there was no nexus between the imported and the exported goods, and the benefit of Notification 204/92 was not available. The show cause notice dated 5-4-1995 was issued by the Asst. Director (DRI) to the appellant for enhancing the declared value from Rs. 15,30,325/- to Rs. 48,47,862/- and for confiscation of the goods under section 111(d) and (m) of the Customs Act, 1962, and also for imposition of penalty under section 112 of the Customs Act. As per the said show cause notice both the residential and office premises of Ramesh Nebhnani and Nebco Traders, 59/61, Sunderlal Bahal Path, Fort, Mumbai were searched on 9-2-1995 by the DRI officers and recovered various documents in the form of fax messages. The show cause notice relates to consignment of fur fabric imported under the four bills of ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty thereof. The DRI had the powers to seize and issue show cause notice. The impugned order contrary to it cannot be upheld. Paragraph 47 of the Exim Policy of 1992-97 and the Customs Notification 203/92-CX prescribes some nexus between the goods to be imported and the goods, which are to be exported. Paragraph 47 applies to the goods involved in this case provided under the duty exemption scheme the import of raw materials, intermediaries, components, consumables, parts, accessories, packing materials and computer software required for direct use in the product to be exported may be allowed to be imported duty free. The notification referred above provides that the material covered by a Value Based Advance Licence can be imported duty free. The material means the material required for manufacture of export product, as per the explanation to the notification. The decision of the Bombay High Court in S.V.A. Udyog Viniyog v. U.O.I. - 1993 (46) E.L.T. 376 held that the nexus between the raw material imported and the export product has to be established. If the exported goods do not contain any kind of fabric which has been imported, the goods imported cannot be construed to be for rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int and length of the pile fibre for artificial fur fabrics. In view of this, the Commissioner should not have accepted the uniform price declared of USD 1.5 per yard irrespective of the length of the pile fibre. The contents of the fax message relating to invoice No. in the lower half are connectable to the importer, and the finding of the Commissioner that the fax message dated 24-1-1995 had been planted with an intention to implicate the appellant and it has no connection with the present importers simply because they have produced a copy of the fax from overseas supplier with certain variation. The finding of the Commissioner that the statement of Ramesh Nebhnani is forged by addition and the statement is not voluntary in nature. The statement of Anil Nebhnani is not at all considered which has supported the material facts in the statement of the appellant Ramesh Nebhnani. He has not retracted his statement. The statement of Ramesh Nebhnani is in his own handwriting under the signature wherein the additions are made by him, which are grammatical corrections without materially altering the meaning of the sentence. The various fax messages seized materially corroborate on price w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hows that the amount and invoice No. mentioned therein are checked in the bank. To prove the undervaluation the correspondent in page 60 of the paper book is still to be materialised in future. It is not shown that the word Nebco Trading Co. was written by Anil Nebhnani. Nothing is shown about the invoice No. 26/95. Paragraph 56 of the paper book pertaining to the supplier's letter showing the mailing address contain the fax number 91-22-2855848 of Mahavir Communications. Clause (d) in the show cause notice in page 3 bottom, and page 4 top, pertains to that. It pertains to one fax only. It is not related to the goods involved in this case. There is no admission by the appellant Ramesh Nebhnani about the under-invoicing. The statement has been retracted by him. Page 9 of the appeal memorandum and pages 55 and 54 of the paper book shows that only the two fax messages dated 24-1-1995 and 7-2-1995 are very much relevant to the subject import. The importation that the fax message dated 24-1-1995 read with statement of 9-2-1995 of Ramesh Nebhnani clearly shows that at least two of the five consignments covered the invoice Nos. 10-27/95 there was a direct evidence of under-invoicing and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods as the artificial fur fabrics which does not appear to have been used in the export product namely leather garments, leather coats, jackets which were exported and the licence was made transferable in terms of import export policy. The artificial fur lining is a consumer goods under the Import Policy, and attract levy of normal custom duty applicable to each consignment. In paragraph 13 they were called upon to show cause to the Collector of Customs, New Customs House, Bombay as to why the goods covered by four bills of entry and one container as detailed in paragraph 3 and annexure to the show cause notice, it had declared value of Rs. 15,30,325/- should not be reassessed to the value 48,47,862/- and should not be held liable to confiscation under section 111(d) and (m) of the Customs Act read with Foreign Trade (Development and Regulation) Act, and also for the personal penalties under section 112 of the Customs Act. So from the above, it is clear that the question of valuation element is also involved in the case after reassessment apart from the question of confiscation and imposition of penalty. 9.In the grounds of appeal regarding this aspect it is urged in page 7 and 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that such specific function of levy and collection of duty or to raise a demand by issue of show cause notice have been specifically assigned to this officer. The designation as Asstt. Collector of Customs under the Notification 19/90 entitles to perform other functions which could be performed by the Asst. Collector. Going by the definition of proper officer as given in the Act, it indicates that only such of the officer even out of the officers of the cadre of Assistant Collector who are specifically assigned the work of levy and collection of duty can issue the show cause notice in their capacity of the proper officer with no specific assignment of such duty either by the Board or the Commissioner of Customs, DRI (AD) cannot issue a notice contemplated under the Act. This legal position is not specified in the present case, the issue to be determined for imposing the penalty depends upon the under-invoice and the admitted evasion of duty as pointed out in the show cause notice. The question of confiscation under Section 111(d) and (m) is also void. These things depend upon the validity of the import, and the under-invoicing, which covers evasion of customs duty and the re- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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