PLETHICO PHARMACEUTICALS & Vs. CCE

JUDGEMENT

(1.) THE appellant M/s. Plethico Pharmaceuticals Ltd. is a manufacturer of medicines. They imported a consignment of over 42 M.T. of extract of liquorice root and filed a Bill of Entry No. 802 dated 14.9.2001 for the clearance of the goods. The import was from M/s. Al -Rai Trading Est. UAE Dubai and the transaction value worked out to over Rs. 11.39 per kg. The importer sought assessment of the goods at the transaction value. The impugned order has rejected this request and has held that assessment should be at a value of Rs. 65.26 per kg. At the enhanced rate, the consignment value worked out to about Rs. 27.65 lakhs. The impugned order has confiscated the goods for misdeclaration of value under Section 111 (m) of the Customs Act. Of course, with an option to redeem the same on payment of a fine of Rs. 10 lakhs. The Order has also imposed a penalty of Rs. 2 lakhs under Section 112 (a) of the Customs Act on the appellant. There is a separate penalty of Rs. 1 lakh on the second appellant Shri Bhaskar A. Patal. The impugned order has also held that the imported goods in question are liable to additional duty of customs. The appellant is not contesting this finding. Thus, the dispute centers around the enhancement of assessable value and actions consequent to that.

(2.) IT is the contention of the appellants that the rejection of the transaction value for the purposes of valuation of the goods and demand of duty at an enhanced value is contrary to legal provisions relating to valuation of the goods and relevant facts of the case. It has been emphasized that, in support of the transaction value, the appellant had obtained and produced before the Commissioner the sale price of the goods from the country of origin. It is submitted that as the sale price of the Dubai trader was at a profit, it could not be objected to. It is pointed out that the goods are of Turkmenistan origin and the Dubai dealer had purchased the goods from the Agro Industrial Complex, Buyan, Ministry of Health and Medical Industry of Turkmenistan under invoice dated 9.7.2001. It is the appellant's contention that the entire consignment purchased by the Dubai dealer had been sold to the appellant at a profit. The learned Counsel for the appellant has submitted that the standard for valuation of goods for levy of customs duty is their transaction value and that, in the present case, when the transaction value is supported by the purchase price of the trader there was no justification at all for not accepting the transaction value. The learned Counsel further submitted that contrary to the legal provisions, the impugned order has undertaken the valuation of the goods under different methods like costing, import price of spray dried liquorice extract and Internet offer price and fixed assessable value at the Internet offer price. It is the submission of the learned Counsel that the Internet offer price cannot constitute the basis for valuation. According to him, even less so in the present case, since that Internet offer price appears to be a constant one. The learned Counsel has pointed out that while this price was adopted by the Commissioner for the proceedings initiated under show -cause -notice dated 12.2.2002, the appellants' recent verification on 6.3.2002 has shown that the price is the same. A print out has also been filed in support.

(3.) THE learned Counsel has further submitted that the adjudicating authority was in error in rejecting the sale invoice of Turkmenistan on the ground that the mode of transport shown in that invoice is Trucks while journey from Trukmenistan to Dubai necessarily involves crossing of Persian Gulf and that it is ridiculous to suggest that the Trucks passed the Gulf. The other point made in the order about the difference in mode of packing also is not valid.