2007 (6) TMI 462 - AT - Customs

Natural justice - Hearing, opportunity of being heard - Demand - Show cause notice by DRI officers - Evidence - Documentary evidence - Valuation

Summary

Issues Involved:
1. Unauthorized possession of foreign currency and incriminating documents.
2. Allegations of misdeclaration and undervaluation of imported goods.
3. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue show cause notices.
4. Admissibility and authentication of evidence.
5. Violation of principles of natural justice.

Detailed Analysis:

1. Unauthorized Possession of Foreign Currency and Incriminating Documents:
The appellant was apprehended at Calcutta Airport carrying unauthorized foreign currency (US $45000 and Rs. 9000/-) along with several incriminating documents. These documents led to further investigations by the Directorate of Revenue Intelligence (DRI). Goods worth Rs. 24,26,234/- were seized from the appellant's company premises due to the inability to produce documentary evidence supporting their legal acquisition.

2. Allegations of Misdeclaration and Undervaluation of Imported Goods:
Based on statements from the appellant and the company's manager, it was alleged that the imported goods were undervalued. The supplier sent invoices and packing lists with lower values and quantities, which were used for customs clearance, while the correct description of the goods was not declared to Customs. The show cause notice detailed these misdeclarations and concealments, demanding duty evasion amounting to Rs. 3,95,58,229/-. The Commissioner confirmed a differential duty of Rs. 1,45,85,446/- and imposed penalties on the appellant and the manager.

3. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to Issue Show Cause Notices:
The appellant contended that the DRI had no jurisdiction to issue show cause notices under Section 28 of the Customs Act. However, the tribunal found that Notification No. 19/90-Cus. dated 26-4-99 empowered DRI officers as "Customs officials," validating their authority to issue such notices.

4. Admissibility and Authentication of Evidence:
The appellant argued that the documents relied upon by the department were not authenticated as per the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948. The tribunal held that the Act provides a mechanism for notarial acts abroad but does not mandate that every document must be attested. The tribunal found the documents obtained from foreign customs authorities reliable and corroborated by other evidence. The tribunal also dismissed the argument that fax messages were inadmissible due to lack of signatures, noting that their exchange was not contested by the appellants.

5. Violation of Principles of Natural Justice:
The appellant claimed a violation of natural justice, stating that their adjournment request was not properly addressed. The tribunal found this claim flimsy, noting that multiple opportunities for personal hearings were provided, which the appellant failed to attend. The tribunal also rejected the need for cross-examination of foreign suppliers, citing the Supreme Court decision in Kanungo v. Collector of Customs, which held that principles of natural justice do not require cross-examination in such cases.

Conclusion:
The tribunal upheld the Commissioner's findings, confirming the differential duty and penalties imposed. The appeals were dismissed, affirming the thoroughness and legality of the investigation and adjudication process.