VELPA TECHNOLOGIES AND VELU Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE lower authorities have demanded differential duty of Rs. 3,74,130/ - from M/s Velpa Technologies and have imposed on them equal amount of penalty. They have also imposed a penalty of Rs. 1 lakh on Shri Velu Chandrashekar under Section 112 of the Customs Act. The present applications seek waiver of predeposit and stay of recovery in respect of these amounts. After examination of the records and hearing both sides, we note that M/s Velpa Technologies (M/s VT, for short) had imported Polycarbonate films in 3 consignments and sought clearance thereof by filing Bills of Entry in January, 2003 (for the first consignment), June, 2003 (second consignment) and July, 2003 (third consignment). In respect of the first consignment, they declared unit price as USD 2.1 and, in respect of the remaining consignments, they declared unit price as USD 4.2. The investigators of the department located an invoice dated 20.03.2003 issued by the supplier (China) to M/s Fourways International of Mumbai, which indicated unit prices USD 5.17 and USD 5.39 for two varieties of Polycarbonate films of Chinese origin. The lower among these two was adopted as basis for the assessable value for all the three consignments and accordingly differential duty was demanded. This demand is also based on a statement of Shri Velu Chandrashekar (authorised signatory for M/s VT). Ld. Counsel for the appellants submits that the said statement of Shri Chandrashekar did not contain any admission of the enhanced price in respect of the goods in question. Ld. SDR has read out the said statement to us and we have not found any categorical admission of enhanced value in respect of the second and third consignments, though, in respect of the first consignment, the statement contains admission that the declared price of USD 2.1 was very low. Ld. Counsel has also pointed out that the unit price 5.17 mentioned in the invoice issued by the supplier to a third party was not to be adopted as basis of the assessable value of the goods in question inasmuch as there was no Bill of Entry corresponding to such invoice and the consignee in the said invoice (M/s Fourways International) was not comparable to the consignee (M/s VT) in the instant case. Counsel submits that M/s VT had been appointed as sole distributor in India for the supplier, whereas there was no such agreement between the supplier and M/s Fourways International. It is also submitted that, out of 36 rolls of films contained in the first consignment, 24 rolls were seized after clearance of the goods and this quantity is in departmental custody. The differential duty leviable on this quantity of films at the rate fixed by the lower authorities is Rs. 1.85 lakhs, Counsel points out. It is submitted that, in respect of this duty, waiver and stay are liable to be allowed. We have heard ld. SDR also on these aspects.

(2.) AFTER examining these submissions, we are of the view that, in respect of 36 rolls of Polycarbonate films contained in the first consignment, for which USD 2.1 was declared by the importer, there is a tenable case for the Revenue for enhancement of value inasmuch as Shri Velu Chandrashekar, in his statement (which was never retracted), conceded this very low value. 24 rolls out of these 36 rolls are in departmental custody. 12 rolls were cleared and retained by the assessee. In respect of this quantity of goods, ld. Counsel has estimated the differential duty at Rs. 80,000/ -. We are inclined to accept this estimate for the present purpose and direct M/s VT to predeposit Rs. 80,000/ - (Rupees Eighty Thousands only) for the purpose of Section 129E of the Customs Act. Now that we have found under -valuation of a part of the goods by the assessee, on a prima facie assessment, we cannot rule out penal liability of the authorised signatory. In the circumstances, there will be a direction to him to predeposit Rs. 25,000/ - (Rupees Twenty -five Thousands only) for the aforesaid purpose.

(3.) THE aforesaid amounts shall be deposited within 4 weeks. Report compliance on 28.06.2006.