KAILASH ENTERPRISES Vs. CC

JUDGEMENT

(1.) This appeal is directed against the Order -in -Original No. 153/2003 dated 6.2.2003 passed by the Commissioner of Customs (Exports), Chennai under which he has enhanced the value of the goods viz. Mercury imported by the importers -appellants to US 93 per flask (CIF) and classified the goods under CTH 2805.40 of the CTA 1975. He has also confiscated the goods with option to redeem he same on payment of fine of Rs 4,00,000 besides imposing penalty of Rs. 50,000 on the appellants under Section 112 (a) of the Customs Act, 1962. The goods are under the custody of the department and has not been redeemed.

(2.) Brief facts of the case are that the appellant -importers have filed BE No. 415078 dated 2.8.2002 under DEPB scheme through their CHA M/s Sri Pavithra Enterprises, Chennai for clearance of 500 flasks Parada (Crude Drugs) totally weighing 17,237.46 Ks (net) valued at US 19,000 (C&F). The goods were classified by them under CTH 1211.90 and CETH 1211.90. The importers filed the relevant invoice packing list, certificate of origin showing the country of origin of the goods as USA, bill of lading and DEPB slip etc, as required and also subscribed to the declaration. 100% examination of the goods was conducted by the officers of the SIIB and it was found that consignment was supplied by two manufacturers viz. Bethlehem Apparatus Co. Ico USA and Corrosive 8. On the Pallet supplied by Bethlehem Apparatus Co. it was indicated that the mercury was quadruple distilled 99.99995% virgin merury. Statement was recorded from Kailash Chand Jain, proprietor of the appellant Company on 18.2.2002 wherein he has stated inter alia that the company is engaged in the manufacture of camphor tablets and also trading in various items and that they are not manufacturing any Ayurvedic or Unani medicines and he was not aware about the use of mercury in any medicines. During investigation, the department found that mercury is known as mercury or quick silver or hydrargyrum, and is available in grades like technical, virgin, distilled & ACS and finds applications in several industrial uses and also used in the Ayurvedic and Unani medicines. The department took the view that mercury imported is correctly classifiable under 2805.40 of the CTH of schedule to the CTA, 1975. The department also drawn up a comparative chart showing quantity and CIF value of similar goods imported at different ports as under:

(3.) Shri A.K. Jayraj, learned Counsel for the appellants while reiterating the grounds of appeal submitted that there is no reason whatsoever to reject the transaction value declared by the appellants inasmuch as the appellants have produced all the relevant documents to prove the price declared by them and it is not the case of the Department that the appellants have withheld any information from the department in this regard. He further submitted that importation made by the appellants cannot be compared with the imports made at different ports as indicated above and relied upon by the department inasmuch as the importation in the present case is 500 flasks whereas the ones relied upon by the adjudicating authority, the maximum quantity involved was just 200 flasks as could be seen from the table drawn above. He has also cited various judgments of the Hon'ble Apex Court particularly the latest judgment on the subject in the case of M/s Eicher Tractors Ltd. 2000 (72) ECC 673 (SC) : 2000 (122) ELT 321 wherein it has been held that price list of the foreign supplier/manufacturer is not a proof of transaction value invariably and existence of the price list cannot be the sole reason to reject the transaction value and it does not preclude discounts which may be granted for a variety of reasons including stock clearance. It was also held therein that production of price list cannot discharge the onus on the Customs authorities to prove the existence of a special circumstances indicated in Section 14(1) of the Customs Act, 1962. He has also cited the judgement of the Apex Court in the case of Mirah Exports Pvt. Ltd v. CC, 1998 (59) ECC 219 (SC): 1998 (98) ELT 3 (SC) wherein it has been held that it is not unusual for a foreign supplier to give a higher discount to an importer who is importing a much larger quantity and merely because such a discount has been given by the supplier after negotiation, it cannot be said that there was any under -valuation in the invoice. He has also invited our attention to the judgment of the Hon'ble Calcutta High Court in the case of Sushil Kumar Kayam v. ACC, 1993 (68) ELT 537 wherein it was held that onus is on the department with sufficient evidence relating to comparable goods imported in comparable quantity from same country of origin and same supplier and at comparable time and place. In the circumstances, he sought for setting aside the order and allowing the appeal.