Y2K INTERNATIONAL, Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) M /s. Y2K International (hereinafter referred to as the 'importers') presented a Bill of Entry for home consumption dated 08.07.1999 for clearance of 336 pieces of Mother Boards (PPCB) for an assessable value of Rs. 3,24,768/ -. The unit price of the consignment which was supplied by M/s. Trinity Infotech, Hong Kong was USD 22 per piece (CIF). The value declared appeared to be low and, therefore, the case was taken up by SIIB, for examination and investigation. The consignment was opened and found to contain 336 Nos. of Pentium -II Mother Boards, and 336 Nos. Mini Boards, CDs, manuals and cables with fittings. The Mini Boards known as "Daughter Boards" were not declared in the Bill of Entry. It was also noticed that the cotemporaneous import prices of Mother Boards of various models were in the range of USD 35 -45 per piece and the selling price of the Daughter Boards alone range from USD 5 -7 per piece. As a result, the declared price of the subject Mother Boards worked out to only USD 15 -17 which was much lower than the contemporaneous import price of similar boards. During the course of investigation, the premises of the importers was searched on 14.07.1999, and 102 Nos. of Mother Boards and 68 Modems totally valued at Rs. 4,34,000/ - imported through Air Cargo Complex, Chennai were seized. Investigation revealed that even though prices of computer parts were constantly fluctuating, the importers had earlier imported 9 consignments of Mother Boards and Daughter Boards of an assessable value of approximately Rs. 27.47 lakhs during the period 17.10.1998 to 08.07.1999 with a constant declared unit price of USD 22 per piece CIF. Out of the 9 consignments earlier imported, one consignment imported under Bill of Entry dated 21.05.1999 also included Mother Boards which were not declared thereunder. Shri Yogesh, one of the partners of the importer -firm, stated on 14.07.1999 that one Shri Kamal Jain of Bangalore was responsible for all the transactions with the suppliers. Shri Kamal Jain, Managing Partner of the importer -firm stated that they were importing several computer parts from M/s. Trinity Computer Technology, Taiwan and M/s. Trinity Infotech, Hong Kong, owned by two brothers S/Shri Rakesh Bohra and Rajesh Bohra; that the suppliers were not manufacturers but traders; that the Daughter Boards were not declared in the Bill of Entry dated 08.07.1999 although manufactured by different company and included in the packages of Mother Board. He also admitted that the Daughter Boards were not declared in the Bill of Entry dated 21.05.1999. He also admitted that different types of Mother Boards were imported without mentioning the model numbers and also stated that he was not aware of the actual price of the goods and that he had told the Bohra brothers to supply any material at the rate of USD 22/ - per piece. He admitted that Mother Boards were sold by him in the domestic market at prices ranging from Rs. 2,500/ - per piece to Rs. 4,400/ - per piece and he also accepted that the prices of the Mother Boards varied with the models. Subsequently, the importers stated in writing that the value declared by them correctly reflected the transaction value as per Section 14 of the Customs Act, 1962 and there was no violation. Goods covered under Bill of Entry dated 08.07.1999 were released on execution of Provisional Duty Bond after enhancing the value to USD 37.5/ - per piece and on realization of duty on such enhanced value. The unit value of different models of Mother Boards imported by the appellants herein was compared with the unit price of similar goods imported contemporaneously by different importers in India and it was found that in all the 10 cases of imports by the appellants, the declared price of the Mother Boards was much lower. The quantity of import made by the importers was in the range of 200 -300 pieces which was within the comparable range of the quantity imported by other contemporary importers. Based on the least unit value of similar goods of contemporary imports, the differential duty was worked out as Rs. 7,94,924/ -.

(2.) A show -cause notice dated 08.05.2001 proposing rejection of transaction value and fixation of unit value of USD 32.50 per piece for Mother Boards and USD 5 per piece for Daughter Boards, proposing fixation of goods covered under Bill of Entry dated 08.07.1999, proposing rejection of value declared for Mother Boards already cleared and fixation of total value of Rs. 47,79,577/ - and demand of differential duty of Rs. 7,94,924/ - was issued. The notice also proposed penal action against the importer and its partners. The Commissioner accepted the declared unit price of USD 22 per piece for goods imported under Bill of Entry dated 28.06.1999 and declared value of USD 30 per piece for imports vide Bills of Entry dated 22.02.1999 and 17.10.1998 and held that goods covered under remaining 7 Bills of Entry were liable to confiscation under Section 111(m) for misdeclaration of value, redetermined unit price of goods covered by the 7 Bills of Entry as under:

(3.) THE contention of the appellants that contemporaneous import prices cannot be adopted to value the goods in question as the goods are not comparable in terms of quantity and country or origin is also required to be rejected for the reason that the importers have not produced any details of the contemporaneous imports, even though list of the same was furnished along with the show -cause notice and further the importers have not declared the brand of the goods in the Bill of Entry. The submission that list of contemporaneous import prices was not furnished to them cannot be accepted, in the absence of any such grievance, in the reply to the show -cause notice and during personal hearing before the Commissioner, and the appeal before the Tribunal. The challenge to the demand on the ground of time -bar also fails in the light of our finding that the value of goods covered by 7 out of the 10 Bills of Entry has been misdeclared and in respect of two Bills of Entry, there is an additional misdeclaration of the description of the goods - only Mother Boards have been declared while the consignment was found to contain Mother Boards as well as Daughter Boards.