ABB LTD. Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) THIS is an appeal filed by M/s. ABB Limited, Bangalore. The appeal is directed against the order of the Commissioner of Customs, Bangalore dated 31 -12 -2008. Vide the impugned order, the Commissioner demanded differential Additional Duty of Customs (counterveiling duty, CVD) of Rs. 13,41,83,979/ - (plus interest) short paid on various electrical goods imported by ABB. The Commissioner confiscated the imported goods of value Rs. 7,94,74,99,324/ - under Section 111(m) of the Act and offered its redemption on payment of a fine of Rs. 40 Crores. The impugned order also imposed penalty equal to the duty demanded on ABB under Section 114A of the Act. The period of dispute is January 2003 to December 2007.

(2.) FACTS of the case in brief are as follows. Pursuing intelligence that M/s. ABB Ltd., Bangalore (ABB) was importing electrical apparatus falling under Chapter Heading 85.36 of Customs Tariff Act, 75 (CTA) and Central Excise Tariff Act (CETA, 85) and selling the same from their warehouse to their channel partners (dealers) and others, mis -classifying them under 8538 of CTA and CETA in the Bills of Entry without declaring their Retail Sale Price (RSP) for the assessment of CVD under Section 3 of the CTA read with Section 4A of Central Excise Act, 1944 (CEA) and Notification No. 13/2002 -C.E. (N.T.), dated 1 -3 -2002. They paid lower duty than the CVD due.

(3.) SEVERAL premises of ABB were searched by the officers of DRI on 16 -3 -2007. ABB was found to have engaged in the manufacture of various electrical equipments such as Motors, Capacitors, Relay Panels, Relays, etc. and also engaged in trading of goods imported. The assessee had a network of dealers. Evidence was gathered in the form of statements from various functionaries of the appellants. It appeared that the assessee had mis -declared the classification of the goods imported as CTH 8538 instead of CTH 8536 in order to avoid assessment of the goods imported based on Retail Sale Price (RSP). On test of samples, Electronics Test and Development Centre, Bangalore working under the Ministry of Information Technology, Government of India confirmed the classification of the goods involved as Customs Tariff Heading (CTH) 8536 and not parts of CTH 8538 as declared by the assessee. The assessee used to stamp the words packed for the exclusive use in any industry as a raw material or for the purpose of servicing any industry, mine or quarry on the goods at the warehouse and not at the port of import where the goods were assessed. It was found that the individual pre -packed packages carrying the above marking were packed in master cartons and sold.