2003 (1) TMI 330 - AT - Customs

Summary

Issues Involved:
1. Under-invoicing of imported goods.
2. Authenticity of duplicate invoices.
3. Alleged additional payments through undisclosed banking channels.
4. Evidentiary value of faxes and documents seized.
5. Liability of high seas buyers and penalties imposed.

Detailed Analysis:

1. Under-invoicing of imported goods:
The Directorate of Revenue Intelligence (DRI) received information that M/s. Dungarmal Prithviraj & Co. (DPC) was under-invoicing goods imported from Overseas Development Corporation (ODC). The modus operandi involved issuing two sets of invoices: one understated and another with the suffix 'A' reflecting the correct price. The additional payment was allegedly made through undisclosed banking channels.

2. Authenticity of duplicate invoices:
During the investigation, duplicate invoices were found, but their authenticity was questioned. Anil Mody, the indenting agent, consistently denied knowledge of these invoices, stating that they were fake and not typed by ODC. Dungarmal Doshi, the proprietor of DPC, also denied any knowledge of these invoices and additional payments.

3. Alleged additional payments through undisclosed banking channels:
The DRI alleged that DPC made additional payments to ODC through undisclosed banking channels, evidenced by a fax showing a Book Credit Advice from Israel Discount Bank crediting ODC with US$37,982.90. However, the handwritten notation on the fax connecting it to DPC was not authenticated, and its authorship was unknown. Both Mody and Doshi denied making any such payments.

4. Evidentiary value of faxes and documents seized:
The faxes and documents seized during the search were several years old and their evidentiary value was challenged. The defense argued that these documents were faxed by the DRI themselves and were not authenticated by the bank or ODC. The statements of the parties involved were exculpatory, and no direct evidence of additional payments was found.

5. Liability of high seas buyers and penalties imposed:
The high seas buyers, M/s. Suparshva Industries, M/s. Alfa Transcore Industries, and M/s. Transtamp Laminators (I) Pvt. Ltd., denied any knowledge of under-invoicing or making additional payments. The Commissioner confirmed differential duty and imposed penalties based on the assumption of under-invoicing. However, there was no corroboration of undervaluation from the buyers' statements.

Judgment:
The Tribunal found that the evidence presented by the DRI, including duplicate invoices and faxes, was not strong enough to establish a prima facie case of under-invoicing against DPC and the high seas buyers. The authenticity of the documents was questionable, and there was no proof of additional payments. Consequently, the Tribunal granted waiver of pre-deposit of duty and penalties to DPC, the high seas buyers, and the individuals involved, including Doshi, Anil Mody, and A.G. Deshmukh.