ZENITH COMPUTER LTD. Vs. CC, GOA

JUDGEMENT

(1.) M /s. Zenith Computers Ltd. manufactured personal computers at Goa, out of various components imported by them. They had a sister company named as Zenith Technologists Pvt. Ltd. in Mumbai, which was dealing in electronic components. A number of consignments were imported by M/s. Zenith Computers Ltd. over several years from Taiwan and Singapore. The values declared by the importers were accepted and the goods were allowed clearance. On the suspicion that such goods imported from time to time were under valued, the premises of the importers were searched. The seized documents were examined. Statements were recorded of the officers and staff of the importers. Certain goods valued at Rs. 4,92,707/ - were detained. A number of show cause notices were issued alleging that the goods imported from time to time were undervalued. Extended period under Section 28 of the Customs Act 1962, was invoked in demanding total differential duty amounting to Rs. 9,87,63,617/ -. The Commissioner of Customs in his single order presently impugned before us, held that the charge of under -valuation did not sustain in a majority of cases. In certain cases however, he upheld the charge and confirmed differential duty of Rs. 14,64,267/ -. He imposed a penalty on the importers of Rs. 5,00,000/ - but did not impose any penalty on the officers thereof, who were also notices. The present appeal is directed against this order. We have heard Shri S.N. Kantawala for the appellants and Shri Deepak Kumar for the revenue.

(2.) THE single argument advanced by Shri Kantawala is that the show cause notice was based only on the suspicion that the goods were under -valued and that the department has led no evidence at all to establish under -valuation. We have examined the show cause notices which are identical in their contents. None of the cited statements is inculpatory. This fact has been acknowledged in page 47 of the impugned order. We have seen the various show cause notices, the show cause notices dt. 18.3.1994 and 23.6.1994 do not disclose any documentary evidence relied upon to challenge the valuation of the disputed goods. These show cause notices cite the statements of the officers of the company and the invoices covering the inputs. The other show cause notice dt. 18.3.1994 cites motorola price list. The show cause notice dt. 21.2.1994 relies upon "Lan Network Solution Magazine September 1993". The show cause notice dt. 14.7.1994 places reliance on "International Price List". As per the mention on page 35 of the impugned order, the motorola price list was shown to the importers only at the time of personal hearing. In terms of this price list the price of integrated circuits was more than 500% of the declared values. The order does not indicate the period to which the price list related. The commercial magazine was relied upon by the Ld. Commissioner to hold that the price variation in disc drives was 30% to 80%. However, in internal page 48 of his order, the Commissioner did not place reliance upon this very magazine in examining the prices of all other articles. The international price list disclosed as evidence was also used by the Commissioner in examining the prices of disc drives. The Commissioner observed difference about 35% to 40% in the valuation of disc drives but upheld the valuation placing no reliance on the same price list on which he had earlier placed reliance.

(3.) MUCH has been made by the Ld. Commissioner of the relationship between the importer manufacturer and their sister trading company. A half hearted attempt has been made to show that the relationship made for systematic under -valuation. However, the ultimate findings are not based on this presumption.