COLLECTOR OF CUSTOMS, CALCUTTA Vs. BHARAT TEACHEST INDUSTRIES

JUDGEMENT

(1.) THE short point for determination in this appeal is whether there was under valuation in the present case or not.

(2.) THE facts of the case in brief are that the appellants imported Tinplate waste and declared the CIF value of the goods as U.S.$ 320 per m.t. The description of the goods in TPI -15889, dated 25 -10 -1993 reads as ETP sheets waste - BW -55, DR, 20 x 28 inches and larger bright first, 20 LB tin quoting and better fully assorted clean materials standard export packing as per contract No. 15889, dated 10 -9 -1993 of the beneficiary. The department alleged that the declared value of the goods was considerably on the lower side. They took out a Computer print -out and observed that the value of Electrolytic Tinplate Waste Waste of U.S.A. origin ranged from U.S.A. $ 360 per m.t. to U.S.A. $ 485 per m.t. They also noted that similar goods from the same manufacturer had been imported against Invoice No. TPI 5761, dated 2 -7 -1993 and Invoice No. TPI 5858, dated 13 -10 -1993 at the rate of U.S. $ 465 per m.t. and U.S. $ 485 m.t. per CIF respectively. They, therefore, alleged that there was under valuation. However, the appellants waived issue of the show -cause notice but requested for personal hearing. During personal hearing on 22 -12 -1993, the representative of the importer replied that their goods were different from those covered by the invoice produced by the department as evidence for the higher value and that their goods were not shown to be rust free and without pinholes; that the materials imported by them were double reduced whereas that in the evidence relied upon by the department, the material was single reduced soft tempered; that the size and thickness of their goods was not uniform whereas those relied upon in the evidence were of specific size; that the appellant was actual user utilising this material for manufacturing teachest fittings and, therefore, there requirement was not for high quality material. The adjudicating authority after considering their submissions held that the value was under declared. He, therefore, confiscated the goods allowed them to be redeemed on payment of fine of Rs. 1,20,000/ - and ordered that the goods be charged duty on the basis of the C and F rate of U.S. $ 485 per m.t. Being aggrieved of this order, the appellant preferred appeal before the Commissioner (Appeals) who set aside the impugned order passed by the adjudicating authority and allowed the appeal of the appellants herein with consequential relief. The Department has come up in appeal.

(3.) ARGUING the case, Shri R.K. Roy, ld. JDR, submits that the respondents herein imported the consignment of 41.238 m.t. of Electrolytic Tinplate waste from M/s. Tinplate Partners International, USA and declared CIF price as U.S. $ 320 per m.t. He submitted that during the material period of similar imports, it was found that the value of Electrolytic Tinplate Waste Waste of USA origin was ranging from U.S. $ 360 per m.t. to U.S. $ 485 per m.t. He submitted that this was the price of the same supplier from U.S.A. He submitted that in the description of the goods, the word used is clean material; that the ld. Collector (Appeals) interpreted these two words to mean that the goods are rust free. He submits that this interpretation is not correct and in that very context clean material would imply free from any visual defect. He submitted that had there been any pinholes the same would have been indicated in shade appraiser's report. That the report did not indicate that there were pinholes in that material. Ld. DR also submitted that the ld. Collector (Appeals) has incorrectly interpreted the words double reduced inasmuch the double reduced, he interpreted as goods of stiffer/harder quality and single reduced goods as soft in quality. Ld. DR stated that the term reduction in the Metallurgical Dictionary indicates that reduction is not a process of thinning, but that of removal of oxygen. He submits that since reduction is a part of manufacturing process, there is necessarily a cost difference between single reduction and double reduction. He submitted that the invoice shows that the goods are double reduced whereas the comparable invoice relies on single reduced tinplate. Therefore, the cost of double reduction of the goods should be more than the cost of single reduction goods. He submits that there was no necessity of subjecting the case to chemical test inasmuch as no tinplate quality surfacing etc. could be determined by visual examination. He submitted that the observations of the ld. Collector (Appeals) that so much of difference in value implies difference in quality or clandestine dealing between the parties is vague and beside the point. He submitted that in view of the fact that contemporaneous imports from the same foreign supplier for similar goods were available. Therefore, the allegation of under valuation is established and that the Collector (Appeals) of has wrongly set aside the confiscation of the goods and demand of the differential duty. He, therefore, prayed that the appeal may be allowed.