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TMI Blog1988 (5) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... had been heard on 19-10-1987 and orders were reserved on the miscellaneous application directing the parties concerned to advance their arguments in the cases keeping in view the order on miscellaneous application being delivered either way. After hearing the both sides and the decision that is proposed to be taken on the appeals, we do not consider it necessary to pronounce a separate order on the miscellaneous application because we feel that both the appeals can be decided without considering the additional evidence sought to be brought on record by the respondent-Collector. Accordingly, no orders are being passed on the miscellaneous application. 3. Brief facts in the two appeals are as follows :- (1) The appellant company herein filed a bill of entry in this Custom House on 6-8-1976 through their authorised Custom House agents M/s. Express Clearing Agency for clearance of 7 vacuvators with accessories imported per s.s. Lok Shevak, Rot No. C88/76. The bill of entry was signed by Commander K. Chelliah, Chairman and Managing Director of the appellant company as importer. (2) In the bill of entry the C.I.F. and assessable values of the subject goods were declared to be Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the following observations :- The payment of the cost of vacuvators amounting to Rs. 32 lakhs in dollars was made in U.S.A. No approval of the Reserve Bank of India was obtained therefor and it would appear to amount to violation to Foreign Exchange Regulation Act. The payment of Customs duty has also been evaded as the value declared to the Customs was only $ 2000 which was not correct. On receipt of the extract of the above Report further investigations were carried out by the Custom House Calcutta. Shri H. Ghosh of the appellant company by his letter dated 12.7.1978 informed the Custom House that the relevant papers and files had already been taken over by the CBI and hence no information could be furnished at that stage. Shri Ghosh further informed that as far as they could recollect 7 vacuvators were purchased by them from Captain of vessel Kapetan Markos on payment of Rs. 17,920/- (equivalent to U.S.$ 2,000/-) made through their agent M/s. M.M.P. Lines Ltd. as per agreement dated 4.2.1976. A copy of the said agreement was also sent by Mr. Ghosh along with the said letter. This agreement was entered into between M/s. Vencedora Oceaonic Nariera S.A., the owners of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions between the appellant company and M/s. Vencedora Oceanic Naviara S.A. informed the former that in view of the former s difficulty in obtaining suitable and efficient discharging equipment they were prepared to discuss with M/s. Vencedora Oceanic Navaira S.A. the details of providing first class vacuvators in order to facilitate the operation and that it was understood that the rates and payment terms shall have to be negotiated under the revised conditions. (f) On 16.1.1976 the appellant company informed the Ministry of Shipping and Transport, New Delhi that the owners of Kapetan Markos were insisting that the contract for the discharge of grain would be awarded to the appellant company subject to the said company using vacuvators of reputed American manufacturers, namely Dunbar Kapple Illinois, U.S.A. They further informed the Ministry that M/s. Vencedora Oceanic Naviara S.A. were prepared to hand over the vacuvators on successful completion of the operation by the appellant company at a nominal cost of U.S. $ 2,000.00 payable in non-remittable Indian currency. The Ministry was further informed that the previous request seeking permission to import vacuvators and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly Kapetan Markos in discharging will be the responsibility of CIWTC. The agreement was signed by Commander Chelliah on behalf of CIWTC. (k) On 4.2.1976 Commander Chelliah, on behalf of CIWTC entered into another agreement with Vencedora at New York regarding the sale of 7 vacuvators to the former on payment of U.S. $ 2,000 payable in Indian currency as already stated and received along with the letter dated 12.7.1978 of Shri H. Ghosh of CIWTC. (l) On 28.4.1976 M/s. M.M.P. Lines Pvt. Ltd. Calcutta as agents of Vencedora, handed over 7 vacuvators along with accessories and spares to CIWTC Ltd. on board Kapetan Markos . (m) On 30.4.1976, CIWTC Ltd. sent to M/s. M.M.P. Lines Pvt. Ltd. a cheque for Rs. 17,920.00 equivalent to U.S. $ 2,000 in re-imbursement of the amount paid by the letter on behalf of the former to the Captain of Kapetan Markos as cost of 7 vacuvators and accessories etc. (n) In response to the Lok Sabha Secretariat s letter No. 42/1 (3)PU-77, dated 17.2.1978, CIWTC informed, inter alia, as follows :- As per the agreement with the owners of Kapetan Markos NL Messrs Vencedora Oceanic Naviara of Panama, they advanced on behalf of C.I.W.T.C. a sum of U.S. Do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same day another show cause notice was issued as to why the aforesaid amount of duty of Rs. 19,82,667.55p be not recovered from them under proviso to Section 28(1) of the Customs Act. In the 2nd show cause notice regarding short-levy the cause was to be shown to the Assistant Collector of Customs. On due adjudication by the Assistant Collector of Customs, Calcutta, short-levy mentioned above was confirmed vide his order dated 18.4.1980. On appeal before the Appellate Collector of Customs, Calcutta against the confirmation of short-levy the appellant herein did not succeed. They filed a revision application to the Government of India which now stands transferred to this Tribunal. In respect of the other show cause notice regarding proposal of penalty, Collector of Customs, Calcutta by his order dated 28.10.1981 imposed, inter alia, a penalty of Rs. 5 lakhs on the appellant company herein. Appeal before the Central Board of Excise and Customs decided vide their order dated 18.6.1982 also failed. The appellant company, therefore, have filed the appeal before the Tribunal which is the second mentioned appeal now. 5. The appellants learned advocate has now contended that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M of the ship as cargo. Therefore, the value of the goods has to be taken as on 6.8.1976 when the bill of entry was filed. Obviously, it cannot be the same as the ex-factory price of the new goods before lightering operation. 6. Another argument of the learned counsel is on the question of short-levy regarding the time bar. He has submitted that there is no charge of suppression of bailment agreement or discharge contract in the show cause notice. It cannot be pleaded in the facts and circumstances of this case that any fraud was played by the appellant company. Value of the goods could be easily discovered by the Customs Officers by contacting the local agents of the manufacturers. This having not been done by the Customs Officers, charge of suppression of fact or wilful mis-representation cannot be laid against the appellant. There is no definite proforma of declaration of prices; therefore, the fact about the price of new goods as on 14.1.1976 cannot be treated as relevant for this purpose and this knowledge on the part of the appellant company, cannot be a wilful mis-representation or a suppression. Accordingly, learned advocate asserts that the show cause notice for short-le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, creates the relation of buyer and seller or only a relation of principal and agent, is the intention of the parties to be gathered from the whole scope and effect of the language used and mere verbal formulas, if inconsistent with the real intention, are to be discharged. Viewed in the above context, learned SDR submits that vacuvators can be said to have been imported into India on the date when Kapetan Markos anchored at or of the port of Calcutta near Sagar on 12.3.1976. It is this date which is the date of importation and relevant for the purpose of determining the value of vacuvators in terms of Section 14. On this date the vacuvators were new and their CIF value as disclosed from the quotation dated 14.1.1976 of M/s. Dunbar Kapple has to be taken into account. Another submission of the learned SDR is that the sale in the instant case has been done in the course of import of vacuvators. It is immaterial that the sale in the strict sense has been effected subsequently inasmuch as title in the goods to CIWTC has passed only in April 1986 after the lightering operation. Import of vacuvators in the instant case has been occasioned by the purported sale to be effected at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Replying, learned advocate for the appellant company submits that agreements have to be read in what is stated in black and white there. Wisdom of the Court cannot be imported or implied by substituting the words in the agreements. He relies for this proposition on Supreme Court s judgment in the case of Hakam Singh v. Gammon (India) Ltd. (AIR 1971 SC 740). He also submits that sale is a necessary ingredient of Section 14 and it is the sale price which is to be taken into account for determining the value under that Section. 9. We have carefully considered the pleas advanced on both sides. On an overall reading of all the three contracts entered into by the appellant company with Vencedora on 4.2.1986 no doubt is left that the vacuvators were imported by or on behalf of the appellant company. The agreements have been entered into merely for the purpose of giving a cover of ownership to Vencedora till the lightering operations are over. In our view, the device adopted by the appellant company is nothing but a colourable exercise on the part of the appellant company to avoid payment of full duty of Customs. We agree with the learned SDR that the agreement of contracts entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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