2008 (10) TMI 382 - AT - Customs

Stay petitions - valuation of imported consignments - appellant undervalued the consignments by declaring the value as 1 PMT as against 3-5 PMT and that sold the imported goods in the local market at prices ranging from Rs. 210 to Rs. 230 per meter whereas the sale value was shown as Rs. 80 to Rs. 115, that they manipulated accounts to hide their sales transactions; their local sales invoices indicated quantity strangely - import value and the sale value have not been fully and correctly reflected in their invoices/book of accounts, and there have been collection in cash amounts in excess of invoices, their books are not at all reliable as indicator of their actual financial positions, appellant companies have not made out a case for total waiver of duties demanded from them, there is no justification for total waiver of penalties imposed

Summary

Issues:
Consideration of financial plea for waiver of pre-deposit by appellants.

Analysis:
The case involved the appellants, including private limited companies and a director, who imported fabrics at lower invoiced prices through intermediary suppliers, raising suspicions of undervaluation. Extensive investigations by the Directorate of Revenue Intelligence revealed the involvement of the director in negotiating lower prices with manufacturers and manipulating invoicing. Legal proceedings ensued, leading to orders confirming substantial demands and penalties against the appellants. Despite appeals and deposits made as per court orders, the Commissioner upheld the previous decisions, resulting in the case being brought before the Appellate Tribunal.

The appellants argued for a waiver of the remaining duties and penalties due to financial hardship, presenting evidence of their financial constraints, including limited resources and existing liabilities. They contended that the prices at which their suppliers purchased goods were irrelevant for customs valuation purposes and challenged the authenticity of evidence collected through overseas channels. Additionally, they claimed that affidavits from manufacturers supporting the declared values were disregarded, violating principles of natural justice.

The Tribunal carefully examined the submissions and evidence, finding a prima facie case of undervaluation against the appellants. It noted discrepancies in invoiced values, local market sales, and accounting practices, indicating potential manipulation. Considering the financial plea, the Tribunal held that the appellants' unreliable financial records and questionable practices did not justify a total waiver of duties and penalties. It emphasized the interest of revenue and the need to ensure accurate valuation and compliance.

In its final decision, the Tribunal acknowledged the deposit made by one of the appellants as per the Supreme Court's order but clarified that it was not a complete pre-deposit. The Tribunal then directed specific deposit amounts for each appellant, waiving pre-deposit for the balance duties and penalties subject to compliance within the specified timeline. Failure to comply would result in dismissal of the appeals without further notice. The Tribunal set a reporting date for compliance, concluding the judgment on 13-10-2008.