WESTON COMPONENTS LTD Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellant M/s. Weston Component Limited sought clearance of 2000 pieces declared in the bill of entry as "Mechanical Tuners (Mitsumi)" at a value of HK 26500/ - CIF i.e. a unit price of HK 13.25 CIF per tuner. The supplier of the consignment was M/s. Okatonic Trading Company, Hong Kong, and the invoice dated 15 -4 -1994 covering the goods described the goods as "electronic component" "TUNERS". On examination of the goods it was noticed that original description and markings on the packing boxes had been removed, but one box described the goods to be "DBS Tuner TSU -2; 100 pieces." Thereupon investigation was taken up by the Customs authorities at Hong Kong and and it was revealed that the supplier of the goods had filed an export declaration at Hong Kong Customs for the said consignment and this declaration furnished a value of Hong Kong 2,18,280 FOB i.e. a unit price of Hong Kong 109.14 per piece as against the price of UK 26500 for the consignment and unit price of HK 13.25 declared in the invoice presented to the Indian Customs. It was also noticed that "Satellite Tuners" had been supplied by the same Hong Kong supplier to another importer at Delhi namely M/s. Monica Electronics Ltd. against Invoice No. X51496, dated 19 -5 -1994 at a unit value of US 14.50 per piece. The Customs authorities, therefore, proceeded against the appellants for misdeclaration of the goods and under the impugned order confiscated the goods under Section 111(m) of Customs Act, 1962, with a redemption fine of Rs. 8.5 lakhs, demanded differential duty of over Rs. 9.6 lakhs on account of assessing the goods at the value of HK 2,18,280 and imposed penalties of Rs. 10 lakhs on M/s. Weston Components Ltd. and Rs. 5 lakhs on Shri Sunil Wadhwani, Director of the appellant company. As both these appeals by the appellant importer and Shri Sunil Wadhwani are directed against the same impugned order, both the appeals are taken up together and are being disposed of under this common order.

(2.) THE appellants have contested the enhancement of the value and have maintained that the value declared in the invoice dated 15 -4 -1994 produced before the Customs represented the correct transaction value. With regard to the higher value declared in the export declaration at Hong Kong, they have submitted that it was the result of an error and offered the following explanation: "The error in filing incorrect declaration was primarily due to the reason that while filing the declaration, the export Clerk misunderstood the currency as US instead of Hong Kong 26,500 and multiplied the Hong Kong by the US / Hong Kong exchange rate plus insurance and freight and arrived at the value of Hong Kong 2,18,180."

(3.) DURING the hearing of the appeals on 13 -8 -1999 a letter dated 18 -12 -1996 from the supplier was also produced explaining that the value furnished in the export declaration dated 6 -5 -1994 was incorrect and the appellant had filed a revised declaration indicating the correct value on 20 -5 -1994. The appellants have also challenged the comparison of the value of the goods with the supply to M/s. Monica Electronics Ltd. on the ground that the goods supplied to M/s. Monica Electronics was not the same as the goods under import by the appellant. They have submitted that appellant's goods were different and bore the mark TSU2 -EOIP, while supplies to M/s. Monica Electronics was TSU2 -EOIP R190733. The appellants have also produced copy of catalogue in support of this contention. They have further contended that similar tuners (parts of TV) had been imported by M/s. Golden Industries, New Delhi and M/s. Prestige Industries, New Delhi @ 1.75 US per piece and if the goods were to be assessed on the basis of comparable price, unit price of 1.75 US would be appropriate. They have contended that there was no misdeclaration involved inasmuch as the invoice had declared the goods as "electronic parts" and the value declared was the transaction value. During hearing of appeals it has been stressed that no evidence of extra payment has been produced in the instant case to substantiate the allegation of misdeclaration of value. The appellants have also submitted that declaration as "mechanical tuner" in the bill of entry is of no consequence for the reason that, under the import policy, both electronic tuner and mechanical tuner are permissible for import.