RAHUL RAMANBHAI PATEL Vs. COMMR. OF CUS. (IMPORT)

JUDGEMENT

(1.) M /s. Patel Enterprises, a proprietary concern of one Shri Rahul Ramanbhai Patel, had imported Air Conditioners in April, 1997. They filed Bill of Entry dated 2 -4 -97 for clearance of 50 Air Conditioners of 0.75 Ton each imported from Dubai, the value of which was declared as US $ 220 per piece. Again, on 21 -4 -97, they filed a B/E for clearance of 48 Air Conditioners of 1.5 Tons each from Singapore, the value of which was declared as US $ 260 per piece. Both the consignments were assessed to duty and, accordingly, the assessee paid the duty. The assessment was never challenged. Subsequently however, on the basis of evidentiary materials gathered by the Directorate of Revenue Intelligence, a show -cause notice was issued on 19 -8 -98 proposing to enhance the unit price of Air Conditioners covered by the B/E dated 2 -4 -97 and 21 -4 -97 to US $ 260 per piece FOB and US $ 360 per piece FOB respectively, as also to make further loading under Rule 9(2) of the Customs (Valuation) Rules, 1988. This notice also proposed to confiscate the goods under Section 111(d) and (m) of the Customs Act and to impose penalty on the assessee under Section 114A or Section 112 of the Act. The deposit of Rs. 2.5 lakhs already made by the assessee during the course of investigations was proposed to be appropriated towards the demand of duty based on the new assessable value. The proposals in the show cause notice were contested by the assessee. In adjudication of the dispute, the ld. Commissioner of Customs (Import) determined the assessable value of the goods at Rs. 11,472.79 per piece and Rs. 15,885.59 per piece in respect of the goods covered by Bills of Entry dated 2 -4 -97 and 21 -4 -97, respectively. On this basis, differential duty of Rs. 4,34,071.38 was confirmed against the assessee under the proviso to Section 28(1) of the Customs Act. The aforesaid deposit of Rs. 2.5 lakhs was ordered to be appropriated towards this demand of duty. The importer was held liable to pay penalty equal to duty under Section 114A of the Act. The assessee's appeal, filed in 1999, is against the Commissioner's decision.

(2.) THE assessee had also imported another consignment of Air Conditioners and filed Bill of Entry dated 3 -5 -97 for clearance of 20 Air Conditioners of 2 Tons each, the value of which was declared as US $ 330 per piece. At the time of assessment, the unit price was enhanced to US $ 360 per piece and, accordingly , the assessee paid duty. Later on, a show -cause notice was issued to the assessee on the basis of the results of DRI's investigations, for enhancing the assessable value in the same manner as in the earlier case and for recovery of differential duty, penalty etc. This notice was also contested by the party. In adjudication of this dispute, the ld. Commissioner, revised the assessable value of the Air Conditioners to Rs. 18,492.38 per piece and, accordingly, demanded differential duty of Rs. 88,986.07 from the assessee under Section 28 of the Customs Act. As in the earlier case, penalty equal to duty was imposed under Section 114A of the Act. The goods were held to be liable to confiscation under Section 111(m) of the Act and a fine of Rs. One lakh was imposed in lieu thereof. Appeal No. C239/02 is against this decision of the Commissioner. Shri Rahul R. Patel (proprietor) filed Appeal No. C/240/02 against the penalty imposed on him.

(3.) FROM the submissions made before us, it appears that mainly two issues arise for consideration. Firstly, was it open to the department to issue show -cause notice under Section 28 of the Act for recovery of any additional amount of duty without attempting any revision of the assessment by resorting to the process of law provided under Section 130 of the Act. According to the ld. Counsel, it was not open to the department to invoke Section 28 inasmuch as the assessment was not challenged by the due process of law. The ld. Counsel has relied on two decisions of this Tribunal viz. Hitaishi Fine Kraft Indus. Pvt. Ltd. v. Commr. of Customs: West Bengal : 2002 (148) E.L.T. 364 (Tri. -Kolkata) and Shimnit Machine Tools & Equipment Ltd. v. Commr. of Customs, Sheva, 2006 (204) E.L.T. 630 (Tri. -Mumbai). On the other hand, the ld. Jt. CDR, who represented the Revenue in the appeal of 1999, and the L. SDR, who represented the Revenue in the appeals of 2002, submit that the issue is squarely covered by the Supreme Court's judgment in UOI v. Jain Shudh Vanaspati Ltd. : 1996 (86) E.L.T. 460 (S.C.), which was followed by the Hon'ble Madras High Court in Venus Enterprises v. Commissioner of Customs, Chennai : 2006 (199) E.L.T. 405 (Mad). It has also been pointed out that the SLP filed by M/s. Venus Enterprises was dismissed by the apex court. In her rejoinder, the ld. Counsel for the assessee has submitted that the case law cited on behalf of the Revenue may not be applicable in a situation where there was repeated enhancement of assessable value in respect of a given imported consignment. In this connection, it has been pointed out that, in one of the present cases, the unit price of Air Conditioners was increased by the assessing authority and it was further increased by the adjudicating authority under Section 28 of the Customs Act. Such repeated enhancements, according to the ld. Counsel, are not permissible in law, as held by this Tribunal in the cases of Hitaishi Fine Kraft Indus., Pvt. Ltd. v. Commr. of Customs, West Bengal (supra) and Shimnit Machine Tools & Equipment Ltd. v. Commr. of Customs, Sheva (supra). The ld. Jt. CDR and the ld. SDR have argued that, as the Hon'ble Supreme Court or the Hon'ble High Court did not draw any distinction between a case in which there is repeated enhancement of assessable value (one by the assessing authority and the other by the adjudicating authority) and a case in which the assessable value has been enhanced only under Section 28 of the Act by the adjudicating authority, the ruling of the apex court and the High Court is applicable to all such situations, as in the present cases.