PHOENIX INTERNATIONAL LTD. Vs. CC

JUDGEMENT

(1.) M /s. Phoenix International Ltd. (hereinafter referred to as 'PIC) had filed an appeal being aggrieved with the Order -in -Original dated 12.4.99 passed by the Commissioner of Customs, Inland Container Depot (ICD), Tughlakabad, New Delhi. Against the same Order -in -Original dated 12.4.99, the Revenue had filed 10 appeals in which the respondents are PIL, M/s. Phoenix Industries Ltd. (hereinafter referred to as 'PID'), Directors and other Company officials in the above -named two companies.

(2.) All the 11 appeals (one filed by PIL and 10 filed by the Revenue) were heard together and are being disposed of by this common order.

(3.) IT has alleged in the show cause notice dated 7.5.96 that the parts of footwear imported in the name of PIL and PID were nothing but three models of footwear of Reebock brand, in semi -knocked down (SKD) condition. Footwear were considered to be consumer items whose import required a specific import licence. Footwear were liable to a higher rate of customs duty, higher than the parts of footwear. Certain discrepancies were found in the relevant documents filed for customs clearance. It was alleged that the parts of footwear imported by PIL and PID were complete shoes imported in SKD condition, and were classifiable under sub -heading No. 6404.19 of the Customs Tariff, and that the complete footwear had been imported in contravention of the provisions in the relevant Import Policy. It was also mentioned that the unit soles and insoles were designed for use in the accompanying synthetic footwear uppers, and not for leather's uppers, and that thus, the benefit of Notification No. 45/94 - -Cus dated 1.3.94 was not available to the importers. The charge of under -valuation was also levelled, and the value adopted for applying the higher rate of customs duty as applicable to complete footwear was the retail price of such complete footwear in the international market, reduced by 25%, to take care of the retailer's profit margin and local taxes. Differential customs duty of Rs. 57,51,183.50 was demanded. In para -41 of the show cause notice dated 7.5.96, the noticees were called upon to show cause as to: