MIRAH EXPORTS PVT LIMITED Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) These appeals have been filed against the judgment of the Customs Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'the Tribunal') dated September 4, 1989. They raise the question whether there was undervaluation for the purpose of levy of customs duty under Section 14 of the Customs Act, 1962 (hereinafter referred to as 'the Act') in the invoices of the various consignments of ball bearings which were imported by the appellants.

(2.) Skefko India Bearing Co. Ltd. (hereinafter referred to as 'the Skefko'), appellant in C.A. Nos. 1030-34/90, are importers of ball and roller bearings. They also act as intending agents for marketing of imported ball bearings for and on behalf of AB-SKF, Sweden. Ball bearings of various types are manufactured by Ab-SKF in Sweden and by their subsidiary companies in U.K., Germany, France and italy. Skefko book orders from different types of customers which can be classified into three categories:

(3.) Mirah Exports Pvt. Ltd. (hereinafter referred to as 'Mirah Exports), appellant in C.A. No. 47/90, is a private limited company incorporated under the Companies Act, 1956, carrying on business as importers, exporters and manufacturers' representative at Bombay. In July and September, 1982 Mirah Exports contacted Skefko for purchase of approximately 15 lakhs pieces of ball bearing from SKF from Italy/Germany. The entire negotiations for purchasing the said goods were carried out by Mirah Exports with Punjab Bearing Traders. Out of the goods contracted to be purchased by Mirah Exports, 24 consignments of ball bearing were imported by Mirah Exports from SKF; Italy and SKF; Germany and the balance quantities were imported by Skefko in the months of November, 1981 and January, 1983. The Bills of Entry in respect of 24 consignments imported by Mirah Exports were submitted to the Collector of Customs, Bombay in the months of November, 1982 and January, 1983 and the same were noted. Clearance was sought against 22 import licences held by Mirah Exports. On or about June 22, 1983, pursuant to certain information, the officers of the Enforcement Directorate carried out search at the premises in Bombay of:(i) Skefko; (ii) Associated Bearings Co. Ltd; and (iii) Shri Kishan Chand, the President of Skefko. During the said search certain documents were seized by the Enforcement Directorate. After further investigation a show cause notice dated May 31, 1984 was issued to (i) Skefko; (ii) Mirah Exports; (iii) Punjab Bearing Traders, and (iv) the clearing agents of Mirah Exports. In the said show cause notice it was stated that by undervaluing, Mirah Exports had misdeclared the value for bearings Nos. 6201, 6202, 6203 including shielded bearings in each of 24 Bills of Entry which misdeclaration had rendered all the 24 imports liable for action under Section 111 (m) of the Act and that in respect of the goods, so undervalued to the extent as indicated in the said show cause notice, no import licences had been produced and in the absence of any import licence in respect of such goods in each consignment, such goods had apparently become liable for action under Section 111(d) of the Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 and that Mirah Exports, Punjab Bearing Traders and Skefko had done or omitted to do certain acts, which acts of commission/omission had rendered the goods liable for confiscation and that they had thus become liable for action under Section 112 of the Act. The parties mentioned above were required to show cause to the Collector of Customs, Bombay as to why the goods detailed in Annexure 'A' to the show cause notice should not be confiscated under Section 111(d) of the Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 and also under Section 111(m) of the Act and why penal action should not be taken against them under Section 112 of the Act. The said show cause notice was based primarily on the price list for th year 1981-82 that was furnished by the Central Office of the Oversees Suppliers to Skefko since the invoice value of the goods imported by Mirah Exports was 48.7% of the prices mentioned in the said price list. It was claimed that the price list was recovered during the course of search that was conducted by officers of the Enforcement Directorate on or about June 22, 1983.