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, ld. 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 ld. 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 multiplied 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 ld. 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 ld. 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 ld. 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 ld. 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.) WE have considered the submissions made by both the sides. We are of the considered opinion that the prices bearing in the market cannot be the price cited. Similarly the pikes quoted are of Chinese Garlic at the relevant time also cannot be ignored. In the absence of any findings to the contrary we also find that the ld. Commissioner himself has accepted the value at Rs. 30.22 per kg. We find lot of forces in the submissions made by the ld. Counsel who has fairly considered that the margin of profit is 26% on the Garlic if the average price of Rs. 44 per kg in the market price Rs. 44 per kg is taken which we feel is the original price for taking the margin of profit. We are, therefore, inclined to reduce the redemption fine from Rs. 13 lakhs to Rs. 3.50 lakhs by respectfully following the decisions rendered by this Tribunal in the cases mentioned supra.