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TMI Blog1990 (9) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... undervalued and it was also suspected that the goods were wrongly claimed under OGL. The bill of entry No. 209835, dated 18th February, 1988 was recalled by the SIB Unit. After thorough scrutiny and verification of the invoice it appeared that the value of the goods, namely, 15 QTV-2C and 20 XTV-2C declared at a rate of US $ 8.76 per metre and 19.40 per metre, respectively were too low. It was also doubtful that the goods were covered under OGL Entry 476 of Appendix 6, list 8, part I as claimed. Business premises of the appellant as well as Raychem Corporation, U.S.A. at New Delhi, were searched and during the course of search certain incriminating documents were recovered. It was also noticed that the importers had already cleared one consignment of the same item vide bill of entry No. 219303, dated 24th November, 1987 under OGL and the prices declared by them in the invoice were quite low. The SIB Unit was in possession of one trade price list PS 809 to PS 817 for chemelex heat tracing system which was effective from 1st July, 1986. This trade price list was issued by M/s. Raychem Chemelex, Heat Tracing System, 2555 Bay Road, Redwood City CA 94063, in super session of the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansmits electrical energy from point to point, whereas heat tracer was not a carrier of electrical energy. It is a self-consumer of electrical energy and simultaneously dissipates it later. The individual conductors of a cable are fully insulated to avoid any contact between the two conductors otherwise, a short circuit blow out may result. The heat tracer on the other hand has current flowing between the two conductors through the semi-conductive core at each point along the heater length. Tracer resistance in this case varies as a function of its temperature. The cables on the other hand are specially manufactured to have low resistance and heat tracers are designed in a manner so that its resistance is high so as to generate heat. By characteristic, a cable has a rated voltage or KV rating with which the cable is designed to operate. The heat tracer on the other hand has no KV rating and it has only a temperature rating. It is also flat flexible in nature, therefore, would not get covered under S. No. 462 of Appendix 3A. The importers also stated that the goods, namely, heat tracing cables were all along being cleared under OGL Appendix 6 and this was the established practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the prevailing price list at the time of import. The importers stated that they are international distributors and they are falling in the category of stockists and produced different letters issued by M/s. Radiation Technology, Bombay to various customers confirming that M/s. Lloyd Insulation, Delhi, were international distributors of Raychem Auto Tracers. In view of the above, the importers stated that the value declared by them was quite acceptable under Section 14(1)(a) of the Customs Act, 1962. The importers also relied upon a xerox copy of the letter, dated 4-4-1988 from M/s. Raychem Cyprus explaining sale pattern of M/s. Raychem Corporation. As a matter of trade policy, the price charged from the stockists and distributors etc. were different from those meant for end-users. For bulk order forecast purchase further discounts are offered. The importers also stated that department did not try to make enquiries about contemporary imports of identical goods from Bombay etc. They stated that the price at which such goods are being released at Bombay are lower than the value declared by them. The department, therefore, has not been able to establish any case of under-inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants contended that DGTD opinion did not have any validity. The appellants also requested for cross-examination of Lakshman Misra and Prabhat Kumar. Importers also submitted an expert opinion from the Centre for Energy Studies, IIT Delhi. On valuation and declaration, the appellants stated that the revenue relied on a fresh price list obtained from South Korea of extremely doubtful authenticity. The Korean price list was not issued by the manufacturer, but it was a simple typed list issued to different individual distributors in Korea. Prices were in Korean currency and the price list was effective from 25th October, 1985 and issued on 21st October, 1985 and bearing Korean stamp, dated 19th October, 1985. The appellants further contended that the price list pertains to 1985, whereas the goods were imported in 1988. The Addl. Collector in his order has observed that he is passing the order only in respect of live bill of entry, whereas the other related to the past clearances and the other case will be taken up later after other formalities are completed. The Addl. Collector did not accept the request of the appellants for the cross-examination of Mr. Lakshman Misra and Mr. Prabha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The importers have stated that price lists were meant for distribution only in USA but for pricing of goods to India and China, invoices in respect of which are available, it appears that no uniform policy is being followed. Price for Chinese sale is lower by 10% than that applicable in the relevant column of the so-called price list dated 1-10-1987. The price for Indian sale is also not conforming to the price given in the relevant column meant for stockists and varies by 10-30% as discussed in the later part of this order. In fact, comparison of the price list submitted by the importers dated 1-10-1987 with that of the price list effective from 1-7-1986, available with the department would indicate that while the price list dated 1-7-1986 was quite exhaustive and contained 9 pages, the price lists dated 1-10-1987 submitted by the importers were of a page. Full price list has not been submitted at all. The price list dated 1-10-1987 also states that the same is representative price list, whereas the price list dated 1-6-1986 clearly states that it supersedes the price list dated 1-10-1984. From these, it would be clear that price list dated 1-10-1987 is not quite correct and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Rule 3(B) of the Customs Valuation Rules, 1963. He has farther observed that for ITC the goods were classifiable under Sl. No. 462(a) of Appendix 3A of the Import and Export Policy 1985-88 and the importers were liable to personal penalty under Section 112(a) of the Customs Act, 1962. He had enhanced the value of the goods from Rs. 5,15,696.00 to Rs. 10,71,721.70 under Section 14(1)(b) of the Customs Act, 1962 read with Rule 3 of the Customs Valuation Rules, 1963 and had ordered the confiscation of the goods under Section 111(d) and (m) of the Customs Act. However, he had given an option to the importers to redeem the same on a payment of fine of Rs. 10,00,000.00. He had also imposed a penalty of Rs. 1,00,000.00 under Section 112(a) of the Customs Act, 1962. 3. Being aggrieved from the aforesaid order the appellants have come in appeal before the Tribunal. 4. The appellants have also filed a miscellaneous application for the grant of permission for the additional evidences. The appellants as well as the respondents have filed miscellaneous application for admission of additional evidence. The appellants have filed 3 lists for the admission of documents. LIST NO. 1 (DOC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation unless failure to raise plea earlier either intentional or wilful. II. (1982) 133 ITR 231 - Atlas Cycle Industries Ltd. v. Commissioner of Income-tax, Putiala. Appellate Tribunal - Power to allow additional evidence - Tribunal has to allow or disallow additional evidence after applying its judicial mind. III. (1978) 114 ITR 19 - Hanutram Ramprasad v. Commissioner of Income-tax, Assam Where the Hon ble High Court had held that: At the appellate stage additional evidence may be taken and further enquiry may be made at the discretion of the Appellate Asstt. Commissioner. The Tribunal must while deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner in the light of the evidence and the relevant law. An order recorded on a review of only a part of the evidence and ignoring the remaining evidence cannot be regarded as conclusively determining the questions of fact raised before the Tribunal." IV. (1967) 66 ITR 462 (SC) - Udhavdas Kewalram v. Commissioner of Income-tax, Bombay City I Where the Hon ble Supreme Court had observed that: Appellate Tribunal performs a judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following documents :- I. Letter F.No. 1(2)/IED/CLA/376 dated 7-10-1988 of T.K. Bhaskara Verma, Development Officer, DGTD addressed to Asstt. Collector, Customs, New Delhi. II. Proforma invoice of Raychem Cyprus No. 048 dated 19-10-1987 received by Lloyd Insulation on 3-12-1987. III. Detention notice F.No. S/10-3148/87 dated 24-9-1987 issued by Customs, Air Cargo Complex against M/s. Radiation Technology. He has pleaded for the admission of the additional evidence. Shri Jain has opposed the admission of the additional evidence and pleaded that these investigations were after the filing of the appeal and the DGTD report should not be admitted. He has objected to the same and pleaded that no reliance should be placed on the same. In support of his argument, he has cited a judgment of the Supreme Court in the case of Mohinder Singh Gill v. Chief Election Commissioner, New Delhi Ors. reported in AIR 1978 SC 852. He has laid special emphasis on para No. 8. Shri Gupta, the learned SDR in reply has referred to a judgment of the Supreme Court in the case of State of Mysore v. C.V. Ray reported in 1976 AIR S.C. 477 para No. 7, page 479. 6. On merits, Shri A.K. Jain, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (4) ECC 60. He has pleaded that the DGTD opinion cannot be accepted. Opinion of Professor Grover of IIT, Delhi at pages 62 to 66 is correct. On valuation aspect Shri Jain has argued that invoice price has to be accepted in terms of provisions of Section 14(1)(a) of the Customs Act, 1962. In the present matter, Section 14(1)(b) is not applicable. He has referred to page 25 of the paper book where the telex recovered on search has been discussed in the order and pleaded that the appellants were not confronted with the telex. The telex comes in the order for first time. He has referred to the price lists No. 810 and 811 which appear on pages 31 and 32 of the paper book. Shri Jain stated that the price list is effective from 1st July, 1986, whereas the importation was made in 1988. He has referred to page 23 of the paper book bottom para which is the order-in-original. He has referred to page 10 of the paper book and has also referred to page 45 which is the Korean price list and has referred to the last Item 20 KTV2-CT. Shri Jain has argued that the department s reliance is on price list No. 810 and 811 and that also referred to Korean price list. He has referred to telex dated 27th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the undervaluation and there is substantial difference in prices. The invoice price is too low and the adjudicating authority has correctly followed the trade price list. He has pleaded for the dismissal of the appeal. 8. Shri A.K. Jain, the learned, advocate has referred to the letter from the foreign supplier. He has pleaded for the acceptance of the appeal. 9. We have heard both the sides and have gone through the facts and circumstances of the case. Both the sides have filed additional evidence. We have perused the additional evidence application. The appellants have filed three lists with the application for additional evidence. List 1 pertains to documents/evidence which have been referred to in the proceedings but have not been enclosed with the appeal paper book. We have perused the list No. 1 where there are 10 documents. Document at serial No. 10 is the Raychem price list dated 15th August, 1984. It is a fresh document which was not filed before the lower authorities. Document No. 2 is the DGTD letter No. 1(2)/I ED/CLA-129/88 dated 12th April, 1988 and document No. 3 is DGTD letter dated 24th June, 1986. Documents No. 4 and 5 are copies of the previous orders passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remove certain lacunae in presenting its case at the proper stage and to fill in gaps. Of course, the position is different where appellate court itself requires certain evidence to be adduced in order to enable it to do justice between the parties. 11. Now coming to the merits of the case, the department had relied on a telex dated 27th October, 1987 and the appellants had asked for the cross-examination of Prabhat Kumar which was not granted to the appellants and which has not been referred to in the show cause notice. The adjudicating authority has not mentioned the same. The appellants had pleaded for the cross-examination of Shri Prabhat Kumar which was not granted. We are of the view that there was denial of principles of natural justice. The issues to be decided in this appeal are: Whether the goods imported are dielectric components for heat tracing system falling under OGL, appendix 6, list 8 Part I, item 476 of the Import and Export Policy 1985-88 or cables? The revenue s main reliance is on the DGTD opinion. Shri Laxman Misra of DGTD, Industrial Adviser, had issued the official classification in this connection, as desired. The appellants had asked for the cross-e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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