SAMRAT ENTERPRISES Vs. COMMISSIONER OF CUSTOMS (IMPORT)

JUDGEMENT

(1.) BOTH these appeals are by M/s. Samrat Enterprises, Delhi a proprietary concern of which Shri Inderpal Singh is the proprietor. The issue involved in both the appeals is also the same the valuation of certain electronic parts imported by the appellant at Bombay Port. Accordingly, they were taken up together for hearing and are being disposed of by this common order.

(2.) THE dispute in Appeal No. C/9/2000 -A is with regard to the import of a consignment of 'electrolytic capacitors'. The appellant sought clearance of the goods under Bill of Entry No. 10907 dated 27.01.1999. The goods were declared in the bill of entry as "Electronic Components - Electrolytic Capacitor (other than paper or power capacitors)". The value of the consignment was declared as HK 20856.85 (Rs. 1,15,860). The consignment comprised 8,30,404 pieces of capacitors. The consignment was supplied from Hong Kong and the country of origin of the goods was declared as China.

(3.) ON suspicion of under invoicing and on the basis of prices observed in respect of contemporary imports of certain specified descriptions of electrolytic capacitors by other importers, the case was taken up for detailed investigation by the Customs authorities. Examination of the goods showed that they were electrolytic capacitors of various specifications and each capacitor was found to be having 'Samsung' trademark and the specifications in microfarads (UF) volts (V) were mentioned on the body of the capacitor. The consignment included 102 different types of specifications. Comparison of the declared value with the contemporaneously imported items indicated with the declared value for the imported goods was much less than the value of the comparable goods. The marking "Samsung Korea" showed that the goods were of Korean origin while they had been declared in the bill of entry as of Chinese origin. Market enquiries also showed that the declared value is almost one seventh of the actual CIF value. Shri Inderpal Singh in his statement admitted that the goods were of Korean origin though they were declared as of Chinese origin. Based on above evidence; show cause notice dated 09.08.1999 was issued asking the appellants to explain why the transaction value should not be rejected for the purpose of valuation of the goods and why the goods should not be assessed at higher value of Rs. 8,09,998/ - and differential duty of Rs. 3,29,716/ - recovered. Confiscation of the goods under Section 111(m) of the Customs Act and imposition of penalty under Sections 112(a) and 114A were also proposed. The appellants submitted in their reply that the consignment in question was produced as a stock lot and that the transaction value has been correctly stated in the invoice and that the goods should be assessed at the transaction value. They also refuted the allegation of misdeclaration. The case was adjudicated by the Commissioner confirming additional duty demand of Rs. 3,29,716/ -. Penalties of Rs. 2 lakhs were imposed under Section 112(a) on M/s. Samrat Enterprises and Rs. 50,000/ - on Shri Inderpal Singh. The appeals challenge the enhanced duty demand and imposition of penalties.