KRISHNA AGENCIES Vs. COMMISSIONER OF CUSTOMS, NEW DELHI

JUDGEMENT

(1.) THIS case arose out of the import of seven rolls of direct/indirect photo stencil film in the place of eight rolls of masking films declared in the Bill of Entry. The goods offending formed part of a consignment imported from Singapore by the appellant. According to the invoice, the consignment under import consisted of Top Coated Polyester Film and masking film. The goods were assessed and duty calculated under prior Bill of Entry as per the particulars contained in the invoice and declaration on the Bill of Entry. However, subsequent examination of the goods showed that while goods under import tallied with the declaration in respect of Top Coated Polyester Film, the rest of the consignment was seven rolls of direct/indirect photo stencil film as against the eight rolls of masking film mentioned in the invoice. The Customs authorities alleged misdeclaration of the goods and confiscated the direct/indirect Photo Stencil Film and imposed a penalty on the appellant. The value of the direct/indirect Photo Stencil Film was fixed at US$ 2.3 per meter as against the declared value of US$ 1.77 per meter for masking film. The defence of the appellant that the discrepancy between the description in the invoice and the goods under import in on account of mix up by the shipping staff of the appellant's supplier was rejected. The appellants strongly contested the charge of misdeclaration. It was their submission that goods were declared in the Bill of Entry based on their description in the invoice received form the foreign supplier and that they stood to make hardly any benefit from the misdeclaration of the goods, inasmuch as the masking film attracted a higher rate of duty under the Customs classification under the chapter 3920.69 as declared by them while direct/indirect film attracted a lower rate of duty under chapter heading 37.The difference in value also could be no consideration for making the wrong declaration inasmuch as the quantity of direct/indirect film received was 500 mtrs. Less than the quantity of Masking Film on which duty had been paid. During the hearing of the case, the learned Counsel submitted that the appellants had imported the same goods at the rate of US$ 1.95 per mtr. earlier, and if the present import is valued and assessed at that rate, the differential duty would be less than Rs. 9,000/ - and it did not stand to reason that the appellants would knowingly misdeclare the consignment for a small benefit of Rs. 9,000/ -. He also stressed that under the Import Control Law in force also it made no difference as to whether the consignment was declared as Masking Film or direct/indirect film inasmuch both the items were under Open General Licence for import. The learned Counsel for the appellant emphasized that when the difference in duty was minimal, it would be clear that the wrong declaration in the documents was only the result of mix up of consignments as explained by the supplier and not the result of any ulterior motive to evade customs duty or to overcome any import restriction. With regard to the valuation of the goods the learned Counsel submitted that the appellants themselves had imported two consignments of direct/indirect film one @ US$ 1.95 per meter and another @ US $ 2.30 per meter. He submitted that the present consignment was more comparable with the import at US$ 1.95 US$ as the goods were in Jumbo roll like the supply in the present import, while the consignment imported at 2.30 US$ was cut to size. The Learned Counsel, however, submitted that there was no case for revising the value at all since the appellant's supplier had stated that the goods supplied previously were of a much superior quality when compared to the present supplier. In this context, he pointed out that the supplier had in his letter dated 18th October had clarified that the price is the same for masking film and direct indirect film sent under the present Bill of Entry. The learned Counsel urged the entire proceedings are liable to be set aside in the facts and circumstances of the present case.

(2.) AS against the aforesaid submissions of the appellant, the learned SDR pointed out that misdeclaration remained clearly established in the present case inasmuch as the goods mentioned in the invoice and Bill of Entry was (sic) masking film while goods found on examination were direct/indirect film. She, therefore, submitted that revaluation as well as penal proceedings were fully justified.

(3.) ACCORDINGLY , we are of the view that penal action was not warranted in the present case. With regard to the valuation of the goods, even though the foreign supplier has stated that there is no difference in value between the two consignments, since it is seen that the appellants themselves had imported two consignments of the same goods earlier in April and November 98, it would be justified to revalue the goods on the basis of the previous import. Since the earlier import at Rs. 1.95 US$ per Mtr. and the present import are both of films in jumbo roll it would be more appropriate to take the value rather than the higher value of US $ 2.30 per meter for the cut to size films. We, therefore, order that the assessment of the import goods be finalized and duty charged adopting the assessable value of US $ 1.95 per Mtr. The differential amount if any, realized from the appellant towards duty or penalty may be returned to the appellant. Thus, the appeal is partially allowed by setting aside the confiscation and penalty.