MURALI ENTERPRISES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS appeal has been filed by the appellants against the Order -in -Original No. 29/98 -CAU, dt. 31 -12 -97 passed by the Commissioner dispatched on 10 -3 -98 in which the Commissioner has confiscated the impugned goods namely Chinese white Garlic and allowed the same to redeem on payment of fine of Rs. 13 lakhs on the importers. They were also imposed penalty of Rs. 1 lakh. They were also required to pay appropriate duty on the goods at the time of redeeming the same.

(2.) ARGUING on behalf of the appellants Shri A.K. Jayaraj, Id. Counsel submitted that the redemption fine imposed on the goods is about 82.2 per cent by taking the value at Rs. 60/ - per kg. The Id. Counsel has taken us to Para 4 of the impugned order in which the Commissioner himself has admitted that the prices quoted in the commodity index of Economic Times dt. 19 -12 -97 and 9 -12 -97 ranges from Rs. 11/ - per kg to Rs. 20/ - per kg. Whereas as per "The Hindu" dt. 18 -12 -97, the prices quoted are from Rs. 11/ - per kg to Rs. 32.50 per kg. The importer had also furnished some cash memos and quotations from whole sale merchants on 23 -12 -97 and the prices quoted were from Rs. 3000/ - per 100 kgs to Rs. 5000/ - per 100 kgs i.e. main wholesale price ranges from Rs. 30 to Rs. 50 per kg. He further stated that if the post importation charges are deducted, then the CIF value will not be more than Rs. 30/ - and the landed cost will not be more than Rs. 36/ - per kg. The accepted formula for working out the margin of profit as adopted by the department is equal to Market price minus landed cost divided by CIF value multipled by 100 is equal to 44 - 36/30,22 X 100 = 26% only on CIF value of Rs. 30.22 and duty Rs. 4.53 and incidental charges Rs. 1.25. He has therefore requested that the department has not accepted the value of Rs. 30.22 for the purpose of assessment for the purpose of arriving at margin of profit. The Id. Commissioner has taken the average value of Rs. 60 per kg as against the Market price ascertained by them of Rs. 44 per kg. The Id. Counsel also drew our attention to Section 2(30) of the Customs Act in which the definition of market price has been given "market price" in relation to any goods, means the wholesale price of the goods in the ordinary course of trade in India". He has also brought to our notice the Spices Journal in which Garlic of Chinese origin is given as US 82 per tonne which comes to closely to Rs. 32/ - per kg which has already been accepted by the Id. Commissioner as the value for the purpose of assessment. He therefore submits that on a value of Rs. 50,30,700/ - redemption fine should not have been more than Rs. 3.5 lakhs on margin profit of 26% whereas the Id. Commissioner imposed a redemption fine of 82.2% which is very very high. It is not based on any factual position. Ld. Counsel has drawn our attention to Page 14 of the order of this Bench issued vide Final Order No. 486/2000, dt. 18 -4 -2000 in which redemption fine was reduced from Rs. 28 lakhs to Rs. 7 lakhs. He also drew our attention to the Final Order No. 751/2000 dt. 6 -6 -2000 [2001 (137) E.L.T. 1219 (T)] in which the redemption fine was reduced to Rs. 12 lakhs on the Super Quality Grade A Garlic where the redemption fine was 49 lakhs which was reduced to Rs. 12 lakhs. It was reduced from 99% to 22%. He also invited our attention to the Final Order No. 769/200, dt. 12 -6 -2000 in which also Garlic were imported and redemption fine imposed was of Rs. 8.90 lakhs which was reduced to Rs. 4 lakhs and penalty was also reduced in all these cases.

(3.) HEARD Shri Sree Kumar Menon, Id. DR. He reiterates the findings recorded by the Id. Commissioner in Para 9 of the impugned order in which the Id. Commissioner has taken the local market price in wholesale trade at an average price of Rs. 60 per kg on a price range from Rs. 100 to 160 per kg and held the margin of profit of the order of the 85%.