SWATI GROWTH FUNDS LTD Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) M /s. Swati Growth Funds Ltd., New Delhi imported two consignment of gambier and filed bill of Entry No. 107923 dated 15.12.94 and 100867 dated 27.1.95 at Delhi Customs for clearance of their goods. Concessional rate of Customs Duty under Notification No. 280 -Cus, dated 2.8.76 was claimed on account of goods being of Myanmar origin. Vide order in original No 28/RKC/95 dated 29.5.95, dated 5.1Q.95 Commissioner of Customs denied the benefit of concessional assessment holding that the goods were not of Myanmar origin and were actually of Indonesian origin. The assessable value of the goods was also increased from the declared value of US 1580 per MT to US2800 per MT. The goods were also confiscated and penalty imposed on the firm and Shri Charanjit Grover its Director. This order was taken up in appeal before this Tribunal and the Tribunal vide its Final Order Nos. 132 -133/96 -A dated 29.12.95 confirmed the finding that the goods were not of Myanmar origin as denied and upheld the denial of benefit under Notification No. 280. However, the issue of determination of correct assessable value was remanded for fresh decision to the Collector of Customs. We read the relevant portion of the Tribunal's order: - - We however, consider the determination of the correct assessable value has to be done a fresh. The reason for this is that the Commissioner has relied to a great extent (in para 23 of his order) upon a statement of Shri Charanjit Grover which states inter alia that the appellant has been importing gambier for quite a few years from Indonesia and gives its values. Since the show cause notice did not refer to this statement of Shri Grover (more than one statement had been recorded), as the departmental representative admitted, the order of the Collector has been passed in contravention of principles of natural justice and cannot be sustained.

(2.) REMAND proceedings were carried out by the Commissioner of Customs after giving the appellant a copy of the statement of Shri Charanjit Grover and order in original No. 15/KK/96 dated 13/14.6.96 was passed. The assessable value has been fixed at US 2520 in this order keeping in view the provisions of Note 2 Rule 5 of Valuation Rules, 1986. The order has also confiscated goods under Section 111(m) of the Customs Act, 1962 for mis -declaration of value and the country of origin and for furnishing incorrect information and documents in bills of entry filed in respect to the goods. However, option to redeem the goods on payment of fine of Rs. 3,50,000 in respect of the goods covered by bill of entry No. 107923 dt. 15.12.94 and a fine of Rs. 75,000 for goods covered by bill of entry No. 100867 dt. 27.1.95 was allowed. Further, a penalty of Rs. 1 lakh each on M/s. Swati Growth Funds Ltd., and a penalty of Rs. 1 lakh on Sh. Charanjit Grover under Section 112(a) of the Customs Act has also been imposed. The present appeals are directed against this order.

(3.) IT has been submitted in the appeals and during hearing that the value of US 1580 originally declared was the correct transaction value and the same should have been accepted by the customs authorities. It has been submitted that the appellants had imported several consignments earlier and they have been assessed at the declared value. Therefore, the present order increasing the value is not justified at all. Further, the goods under import are of non -edible variety, while the gambier with which it was empared (imports under B/Es No. 999 dated 4.11.99, 9259 dated 9.10.94 and 8681 dated 9.9.94) were of edible grade and that edible grade is of much higher value. It has been contended that price difference based on variety is well accepted by the trade as well as the customs authorities. References in this connection was made to the circular of the DRI dated 19.10.92 which notes that gambier for chewing is much more expensive. But the present order has been passed holding that there is no difference in variety or value. This finding is totally contrary to known facts. It is well established law that while assessing goods, quality must be given due consideration. [62 ELT 528 (Cal.)]. Further, the comparable value has been taken from imports of September, 1994/ November, 1994 period while the appellants imports were of December 1994. Thus, the valuation has to be based on the price at the time of import. It is not permissible to compare the price of a much different period. (58 ELT 340). The appellants have also submitted that the valuation adopted is contrary to the price indicated in the DRI circular dated 7.8.95 and the letter of the High Commission of Indonesia. The DRI letter dated Secret No. HON/FSE/13/IND/95 -1 dt. 7.8.95 stated that the price of Indonesian gambier was quoted at US1900 per MT C&F Bombay. The letter dated 15.10.93 of the DRI (ALERT NOTICE No. 16/93) also stabs as under: - - It was informed that gambier is available in several forms. Gambier finds use in cleaning and Dyeing. Another form also called 'Bootch' is used for chewing and is far more expensive than the former variety. The High Commission for India at Hong Kong had also reported that the price was around US 1900 in its letter dated August 7, 1995. During the hearing, the appellant's Counsel also submitted that even if the invoice and other documents produced by the appellant is found to be incorrect with regard to country of origin the price indicated therein need not be disregarded for that reason alone, particularly since the revenue does not have any other reliable basis. As against the aforesaid submissions on behalf of the appellant, the learned SDR has submitted that this is a case of deliberate mis -declaration of country of origin and other particulars in order to evade payment of duty. In such a case the invoice cannot be trusted with regard to any information contained therein and it should be rejected completely. The previous imports by the importer offer no reliable basis as they had also been imported as of Myanmar origin. He urged that the comparable prices adopted from contemporaneous imports are clearly acceptable as these imports were of September/October/November, 1994 quite close to appellant's import of December 1994. The time difference is thus, quite reasonable. The prices are also to be accepted as correct in the light of the statement of Sh. Charanjit Grover, the appellant's direction that they were declaring value of US 2650 & 2800 MT for gambier of Indonesian origin, while the declared value for gambier of Myanmar origin was US 1580 per MT. In fact, the case had been remanded by the CEGAT only for the purpose of supplying to the appellant a copy of the statement. The information as contained in the statement regarding price tallies with the comparable price noted in respect of imports at Bombay. Therefore, the valuation has to be upheld in terms of the remand order. The Revenue has relied on the Tribunal's decision in 56 ELT 801 in support of their submission that when the goods are misdeclared, value given cannot be accepted. Further, in the instant case, the goods were sent from one country while invoice was issued from another country, therefore, the valuation given in the invoice cannot be accepted in view of the decisions of the Tribunal in 36 ELT 360 and 66 ELT 441. Learned SDR also pointed out that the valuation has been done in the instant case after giving suitable discount in view of the higher quantity purchased. He submitted that in these facts and circumstances, the valuation cannot be faulted at all. Further, the value adopted remains confirmed by the statement of the Director himself. Therefore, there is no credibility to the present challenge to the valuation. The learned SDR also submitted that as misdeclaration of country of origin with intent to evade duty has already been confirmed by the Tribunal and misdeclaration of value remains proved under the impugned order confiscation and penalties should also be confirmed.