HIND INDUSTRIES Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THIS appeal is directed against the Order -in -Orginal No. S -8/36/92/SIP dated 27 -3 -1992 of the Collector of Customs, Madras, fixing the valuation of Methoxy Hydroxy Balazachydi (Vanil -line) at US 12.50 per kg vide Rule 8 of the Valuation Rules, and also ordering confiscation of the goods vide Section 111(d) and (m) of the Customs Act, 1962, read with Section 3(2) of the Imports and Exports Control Act, 1947, granting option to pay fine of Rs. 5,00,000/ - in lieu of confiscation, and also imposing personal penalty of Rs. 2,50,000/ - on the appellants.

(2.) THE appellants imported 18000 lbs. of vanilline and sought its clearance under REP licence. The valuation of the goods was shown as Hong Kong 500 for 100 Ibs. and the country of origin was shown as Hong Kong. Bill of Entry was filed and copies of the invoice, Bill of Lading, a letter styled as Price List, Sale Contract etc. were produced.The department however suspected the undervaluation and hence the samples were drawn and were got examined by Deputy Chief Chemist who certified them to be pure vanilline, and other investigations allegedly revealed that there were contemporaneous imports at the price of US 13.8 to 15 per kg. An enquiry was therefore made with the appellants, who came forward with the plea that the goods were of inferior quality having purity of 10 to 15%. Telex message from supplier in that regard received after the import, was also produced. Statement of Usman Gani, the proprietor of the firm was recorded on 4 -2 -1992, when he made himself available, where he came forward with the stand that the goods were of Taiwan origin, and that they were the product of 1989, and that the Taiwan party had sold them to Hong Kong party in that year itself but it was in 1991 only, that the appellants purchased the same, and by that time, there was substantial loss of fragrance, an essential ingredient in this product from the quality aspect and as such the price was less than the actual market price.

(3.) PENDING the adjudication, the appellants had moved the High Court and the said Court, while disposing of the petition filed, fixed the time -limit for completion of the proceedings.