2016 (2) TMI 1141 - Commission - Customs

Evasion of ADD - import of 14 and 21 Coloured Picture Tube - overvaluation of the imported goods - application to Settlement Commission - Held that - From the scrutiny of the SCN, the settlement application and the replies to the notice of proceeding it was noticed that present dispute involves various inter-linked companies, in which M/s. Videocon India Ltd. was the main company. As M/s. Videocon India Ltd., they have not come for settlement; the issue that was required to be examined was the maintainability of the settlement applications of other applicants before the Commission, in absence of M/s. Videocon India Ltd. In view of the same it was decided as to whether the applications may be allowed to be proceeded with or not. The Bench has carefully gone through the record and submissions made by both the sides. The Bench observes that M/s. Applicomp India Ltd. (Applicant No. 1) has pleaded that a sum of ₹ 5 crores deposited by M/s. VIL may be treated as payment towards their duty liability because the VIL has deposited this sum on their behalf. The Revenue has contested this fact and stated that the deposit made by M/s. VIL was towards the duty liability of M/s. VIL only. In this same SCN, a duty of ₹ 127.30 crores has been demanded from M/s. VIL. M/s. VIL and M/s. Applicomp India Ltd. are two separate legal entities and therefore, the liability of M/s. Applicomp cannot be adjusted against the payment made by M/s. VIL. Thus, M/s. Applicomp India Ltd. has not fulfilled the condition (c) of the First proviso to Section 127(B)(1) of the Customs Act, 1962 and is liable to be rejected on this ground alone - The Bench has also observed that the applicant is not interested in settling of their case and is asking adjournments on one ground or other. It appears that the applicants are adopting this tactic to delay the proceedings before the Commission. The Commission is statutorily bound by the time limit laid down by the statute to settle the cases and cannot indefinitely postpone the matter without any solid and cogent reasons. The whole tactic adopted by the applicant is to simply delay the proceedings and to gain time and for that they give different excuses at different time. The applicant has not co-operated with the Commission in disposing of the case in accordance with the provisions of the Customs Act. The Bench, by virtue of the power vested in it in terms of Section 127-I(1) of the Customs Act, 1962, sends the case back to the respective adjudicating authorities for adjudication in accordance with the provisions of law. The adjudicating authorities will decide the case as if no application for settlement has been filed by the applicants in this regard - matter remanded.

Issues Involved:
1. Evasion of Anti-Dumping Duty (ADD) on import of Coloured Picture Tubes (CPTs).
2. Artificial enhancement of the assessable value of imported goods.
3. Relationship between importers and suppliers.
4. Maintainability of settlement applications without the main applicant.
5. Compliance with conditions under Section 127B of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Evasion of Anti-Dumping Duty (ADD) on import of Coloured Picture Tubes (CPTs):
The Directorate of Revenue Intelligence (DRI) initiated an investigation based on intelligence that M/s. Videocon Industries Ltd. (VIL) and its group companies were evading ADD on 14" and 21" CPTs by artificially enhancing the assessable value of the imported goods. The investigation revealed that VIL and its associates were importing CPTs from M/s. TGDC Guangdong Display Co. Ltd., China, and M/s. TTD International Ltd., Hong Kong, and were deliberately over-valuing the imports to avoid ADD as per Notifications No. 90/2008-Cus and No. 50/2009-Cus.

2. Artificial enhancement of the assessable value of imported goods:
The investigation found that VIL and its associates were importing CPTs at inflated values during the ADD period to evade the duty. The declared import value of 21" CPTs increased from around USD 28 C&F per piece to USD 41 C&F after the imposition of provisional ADD, and similarly, the value of 14" CPTs was also inflated. Once the ADD period lapsed, the declared import values reverted to pre-ADD levels.

3. Relationship between importers and suppliers:
The SCN alleged that VIL managed and controlled the affairs of the suppliers (M/s. TGDC and M/s. TTD) and formed a web of group companies to manipulate the import prices. The investigation found that VIL and its associates were related to the suppliers, and the transactions were not at arm's length. The SCN also detailed the roles of various individuals and companies involved in the conspiracy to evade ADD.

4. Maintainability of settlement applications without the main applicant:
The Settlement Commission examined whether the applications of other applicants could proceed in the absence of the main applicant, VIL. The Commission noted that VIL was a crucial entity in the case, and without its participation, the settlement applications of the other applicants could not be maintained. The matter was fixed for hearing to decide on the admissibility of the applications.

5. Compliance with conditions under Section 127B of the Customs Act, 1962:
The Commission observed that M/s. Applicomp India Ltd. (Applicant No. 1) did not fulfill the condition (c) of the First proviso to Section 127B(1) of the Customs Act, 1962, as it did not make a full and true disclosure of its duty liability. The Revenue contested the claim that a deposit made by VIL should be treated as payment towards Applicomp's duty liability. The Commission found that Applicomp and VIL were separate legal entities, and the liability could not be adjusted. The applications were also delayed due to repeated adjournments requested by the applicants.

Conclusion:
The Settlement Commission rejected the settlement applications and sent the cases back to the respective adjudicating authorities for adjudication as if no settlement applications had been filed. The adjudicating authorities were directed to decide the cases in accordance with the provisions of the law. The Commission emphasized that the applications of the co-applicants could not be maintained independently as no duty was demanded from them.

Order:
The case was sent back to the respective adjudicating authorities for adjudication. The adjudicating authorities will decide the case as if no application for settlement had been filed. The applications filed by the co-applicants were also sent back as they could not fulfill the eligibility requirements under Section 127B of the Customs Act, 1962.

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