SHRI BABURAM PREMCHAND Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) ON receipt of intelligence, officers of DRI visited the factory premises of M/s. Baburam Premchand where they found Tin Coils/Sheets weighing 68.4 MTs. On enquiry, Shri Premgupta, Partner informed that the said quantity of 100 tons was part of their earlier imports of Tin Coils they had made by mis -declaring three consignments totaling 167 MTs of Tin Sheets/Coils and Tin Free Sheets Seconds and Defective as Tin Free Sheets Seconds and Defectives (TFSSD) under Bills of Entry No. 11630 dated 27/5/02, No. 11612 dated 27/5/02 and No. 389691 dated 16/4/02. These 68.4 MTs of Tin Sheets/Coils were therefore seized. It was found that the seized goods were of width above 600 mm and the same had therefore been imported in violation of provisions of Exim Policy as the policy provisions required that in such cases the importer should obtain pre -shipment certificate and where the invoice value was less than 465 US per MT, the import required a licence.

(2.) SUBSEQUENTLY it was found that a consignment of (Tin Free Sheets Seconds/Defective) sought to be cleared under Bill of Entry No. 404351 dated 20/6/02 were actually tin sheets/coils. This consignment was imported through CFS CONCOR and comprised a quantity of 48.851 tons and the sheets were of width above 600 mm. The price declared was US 200 per metric ton. As the import was invoiced at a unit price much below 465 US, also in the case of earlier imports, the imports were felt to be in violation of policy provisions. Therefore, goods lying in the factory covered by the Bill of Entry dated 27/5/02 and 16/4/02 were seized under a mahazar dated 22/06/02 and the goods covered under the Bill of Entry No. 404351 dt. 20/06/02, lying at CFS, CONCOR were seized on 25/6/02. Representative samples from the seized goods were drawn and got tested at National Metallurgical Laboratory (NML) and were found to be tin sheets of width of above 600 mm. Shri Prem Gupta, Partner of M/s. Baburam Premchand, deposed in his various statements that they had previously imported tin coils of width above 600 mm mis -declaring the same as TFSSD coils and that in three Bills of Entry, a total of about 100 tons had been mis -declared. Out of these 100 tons of Tin Sheets, 31.6 tons had already been sold. As regards the consignment pending clearance, he had advised the supplier overseas to conceal the tin sheets with TFSSD sheets. However, the supplier had sent the consignment entirely of tin sheets of width above 600 mm. He offered to pay the differential duty on the goods involved. He deposited an amount of Rs. 6,89,000/ - on 24/6/02 and Rs. 3,38,000 on 26/6/02 towards such differential duty. Tin sheets are classifiable under CTH 7210.90 whereas TFSSD coils are classifiable under CTH 7209.90. Owing to the mis -declaration, department tentatively decided that the transaction value was liable to be rejected and the value of contemporaneous imports of such imports had to be adopted for assessment. Accordingly, a SCN was issued. In the Show Cause Notice:

(3.) IN reply it was submitted that the goods had been cleared only after verification by customs. The DRI had not verified the stock of 31.6 tons. Value of the imported goods had been enhanced without adequate proof and valid reasons. They also cited various case law in support of this claim. Department had failed to discharge the burden of proof for adopting value of contemporaneous import to enhance the value of imported goods. It was also submitted that there had been no concealment of goods. Goods had been verified by the customs and allowed clearance on payment of duty. They had paid the entire differential duty and got the goods released and hence there was no question of confiscation/fine and penalty. The importer also had claimed that the SCN issued by the DRI was not valid.