2014 (12) TMI 810 - AT - Customs

Waiver of pre deposit - Import of measuring tapes imported - levy of anti-dumping duty - misdeclaring the country of origin and undervaluation of goods - Held that - There is no direct evidence available in the record showing that the goods under import are of Chinese origin. No enquiry has been made by the Customs authorities through the Consulate at Hong Kong to ascertain whether ZOOM brand measuring tapes are manufactured in China. Though the appellant s claim of Malaysian origin of M/s. Adikem Petangor SDN BHD stands disproved, it is to be noted that there are imports of the same brand by the appellant himself from M/s. Honwills Holdings (M) SDN BHD and the Malaysian Chamber of Commerce has certified that measuring tapes of ZOOM brands is a product of Malaysian origin. Further, the container track record also shows that the container which was detained, in which the appellant imported the goods, were loaded at a Port in Malaysia and not elsewhere. The traders who stated before the Customs authorities that the goods were of Chinese origin have admitted that the transactions were only paper transactions and they were not the actual purchasers of any goods from the appellant. Further they have also, during the cross-examination, gone back on their statements and have confirmed that the statements were recorded as per the dictations of the investigating agencies. Appellant has also made a pre-deposit of ₹ 2.09 crore as against the demand of ₹ 4.8 crore. - Prima facie case is in favor of assessee - Stay granted.

Summary

Issues Involved:

1. Differential duty demand and anti-dumping duty on imported measuring tapes.
2. Allegations of misdeclaration of the country of origin and undervaluation of goods.
3. Imposition of penalties under Sections 114A, 114AA, and 112(a) of the Customs Act, 1962.
4. Jurisdiction and liability of foreign suppliers and their partners under Indian Customs law.

Issue-wise Detailed Analysis:

1. Differential Duty Demand and Anti-Dumping Duty:
The adjudicating authority confirmed a differential duty demand of Rs. 1,00,45,588/- and an anti-dumping duty of Rs. 3,80,17,585/- along with interest on measuring tapes imported by the main appellant, M/s. Krish International. The investigation revealed that the goods were undervalued, and the country of origin was misdeclared. The market survey indicated that the actual assessable value should be Rs. 4,84,19,531/-, leading to an additional duty demand. Since the goods were found to be of Chinese origin, anti-dumping duty was also imposed.

2. Misdeclaration of Country of Origin and Undervaluation:
The investigation started based on an alert circular indicating undervaluation of measuring tapes imported from certain countries. The appellant claimed that the goods were manufactured in Malaysia by M/s. Adikem Petangor SDN BHD. However, enquiries revealed no such firm existed in Malaysia. Further, the supplier, M/s. Reva Technologies LLC, Dubai, was found to deal in electronic goods, not measuring tapes. Statements from purchasers indicated that the goods were of Chinese origin, but these statements were later retracted during cross-examination, claiming they were dictated by investigating officers. The Customs authorities did not verify the origin from Hong Kong, and the container track record showed loading at a Malaysian port.

3. Imposition of Penalties:
Penalties were imposed under Sections 114A and 114AA of the Customs Act, 1962, on the appellant and under Section 112(a) on Shri Sunil Dutt Prem Prakash, a partner of M/s. Reva Technologies. The appellant argued that similar imports by Western Impex were not subjected to anti-dumping duty as the investigating agency could not prove the Chinese origin. The Tribunal found no direct evidence that the goods were of Chinese origin and noted that the Malaysian Chamber of Commerce certified the goods as Malaysian origin. Given the lack of corroborative evidence and the pre-deposit made by the appellant, the Tribunal granted an unconditional waiver from pre-deposit of the dues.

4. Jurisdiction and Liability of Foreign Suppliers:
Shri Sunil Dutt Prem Prakash argued that as a partner of a foreign supplier, he was beyond the jurisdiction of Indian Customs and had no statutory obligation to make declarations under the Customs Act, 1962. The Tribunal agreed, noting that the Customs Act does not extend to Dubai, where the supplier is located. Therefore, the penalty of Rs. 50 lakhs imposed on him was deemed unsustainable in law, and an unconditional waiver from pre-deposit of the penalty was granted.

Conclusion:
The Tribunal found significant gaps in the evidence provided by the Customs authorities, particularly regarding the origin of the goods. The lack of direct evidence and the retraction of statements by traders weakened the case against the appellant. The Tribunal granted an unconditional waiver from pre-deposit of the duties and penalties, highlighting the need for concrete evidence to substantiate claims of misdeclaration and undervaluation.