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TMI Blog1995 (2) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... the dyes, their colour index number, concentration etc., required for the purpose of assessment of value, under Rule 10 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (hereinafter referred to as `Valuation Rules ). The packages were not marked as per the invoice, while the packages recovered had marks and numbers. The importer requested for getting the goods tested, and on test, the goods were found to be synthetic organic dye-stuff (disperse dye), in the form of coloured powder with the shade similar to colour index (CI) disperse blue 165/red 343. Under this classification, the CI lists blue GSL 400/resolin red F 3 BS. The value was found to be mis-declared, and was found to be more than the permitted value of Rs. 79,666/- Rs. 80,624/-, under the import license. Under Rule 8 of the Valuation Rules, the value was determined as Rs. 1207037/-, Rs. 977,168/-, and it was alleged in the respective show cause notices that the customs duty of Rs. 2617153/Rs. 3082591, had been evaded. Nirav filed a writ petition in Madras High Court, in December, 1991. In their order dated 30-4-1992, the Hon ble High Court observed in para 7 that the CC, Madras had taken al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under bill of entry No. 29399 dated 17-9-1991 at DM 69.3 per kg. CIF, confiscated the goods but allowed the redemption on payment of Rs. 4 lakhs and imposed a penalty of Rs. 1.25 lakh. 4. Both the appeals were heard on 26-10-1994 when Dr. N. Kantawala, Advocate with Shri N. Singh, Consultant appeared for the appellant, Shri A.K. Singhal, JDR represented the respondent. 5. Dr. N. Kantawala, the Ld. Advocate briefly recapitulated the facts of the case and stated that the goods had been imported at Madras. As there was delay in proceedings by the Department, they had taken up the matter with the Madras High Court. He mentioned that there was no import of the type of the goods as mentioned by the Collector. The Valuation Rules were very clear, and the Ld. Advocate pleaded that the Collector had wrongly gone to Rule 8 of the Valuation Rules. Relying on the Tribunal s decision in the case of Sai Impex v. CC, 1992 (62) E.L.T. 616 (T), the Ld. Advocate pleaded that the goods were of Chinese origin, wherein the import and export trade is controlled by the State. He also referred to the Tribunal s decision in the case of Varsha Poly Products Pvt. Ltd. v. CC, Kandla, 1994 (4) RLT 673 (T) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector of Customs, Madras. 7. In rejoinder, the Ld. Advocate referred to the order passed by the Collector of Customs, Bombay in identical matters, and pleaded for acceptance of their appeals. 8. We have carefully gone through the facts and circumstances of the case, and have given our due thought and consideration to the submissions made by both the sides. 9. The goods were imported by the trader for sale to other buyers. The foreign supplier was also a trader, and not the manufacturer of the goods. The goods were described as disperse dye red/blue. Under Bill of Entry No. 31963, dated 15-10-1991, the description was disperse dyes red, and under Bill of Entry No. 29399, dated 17-9-1991, they were mentioned as disperse dyes blue. There was no other description of the goods imported. Dye is a chemical compound used to produce long lasting colours in materials. The Textile Industry uses dyes to colour fibres, yarns and fabrics. Manufacturers also dye food, fur, ink, leather, paper, wood, plastics and a host of other items. Disperse dyes dissolve only slightly in water. Dyeing at high temperatures helps dissolve the insoluble dye particles, allowing them to be absorbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer to designate both the manufacturer and the class of dye, the second is the color, and the third is a series of letters and numbers used as a code by the manufacturer to define more precisely the hue, and also to indicate important properties which the dye possesses. The code letters used by different manufacturers are not standardized. A few of the more widely used designations include R for reddish, B for bluish, and G for greenish shades; L for light, S for sublimation and W for wash are used for fastness properties. Dyeing properties are indicated by N for neutral, and E for exhaust. There are instances where one manufacturer may designate a bluish-red dye as Red 4BL and another manufacturer uses Violet 2RL for the same dye. The CI system overcomes this uncertainty by the use of a standard hue-indication chart in the shape of a hexagon with the six primary and secondary hues (yellow, orange, red, violet, blue, and green) each occupying one segment of this hexagon (see Colour). The tertiary hues (brown and black) are inside the areas of the primary hues. This system is one of several that have been developed for the mathematical definition of color (4). A five-digit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the Department had received some intelligence reports as to the under-valuation of the goods imported in the instant case. 11. The importers had stated that the goods were purchased on FOB basis, and that they had not made any payment to the foreign suppliers. It has been stated by Shri H. Shashikant Zhaveri at page 144 of the paper book in Appeal No. C/197/94-A that : I have not made any payment to S.I. Group, Hong Kong. It was an understanding between me and the S.I. Group, Hong Kong that the amount i.e. CIF value not be remitted by me through the Bank i.e. Union Bank of India, Opera House Branch, Bombay after the sale of their consignment of Dye Blue. About the second consignment also he stated that he had not made any payment to the foreign suppliers for the same. He had visited Hong Kong and met one, Shri Ajay of S.I. Group Hong Kong, after the first consignment had been cleared. In his statement recorded under Section 108 of the Customs Act, 1962, he had stated that if any differential duty is levied after the test report of the dyes blue is received by you I promise that I will pay whatever the differential duty on these consignments of dyes blue cleared by m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s had also been made with M/s. Colour Chem Ltd., Bombay who are the agents of M/s. Hoechst, and it was informed by them in their letter dated 9-1-1992 that the correct CIF price by Sea of BIANIX/Samaron blue GSL 400 was DM 80.25 per Kg. As recorded in the order of the adjudicating authority, the appellants had pleaded before him that even if their other arguments are not accepted then they must be given the benefit of the lower price quoted by M/s. Chika Ltd. On page 16 of the adjudicating order it has been mentioned as under :- On 20-9-1993 Shri R. Raghavan and Shri R. Venkatavaradhan, Advocates appeared for personal hearing. Apart from reiterating the contents of the written reply already submitted vide their letter dated 30-11-1992, Shri Raghavan also handed over his written submissions. In addition he highlighted that in case even if the price of Blue quoted by M/s. Chika Ltd. and M/s. Colour Chem Ltd. was taken as referring the blue dye under import, in spite of difference in the strength quoted in the letters of M/s. Chika Ltd. and M/s. Colour Chem Ltd., the party must at least be given the benefit of the lower price quoted by M/s. Chika Ltd. In para 4.10 of the order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Court and to produce such material, which may satisfy the Court that the recital in the judgment crept in inadvertently or it was erroneous. There is no such rebuttal in this case. 13. In the case of Bhana Bhai Khalpabhai v. C.C. Another, 1994 (71) E.L.T. 3 (S.C.) = 1994 (1) RLT 284 (S.C.), the Hon ble Supreme Court have observed as under : It is well known that it is very difficult for the prosecution to prove every link in respect of the commission of the offence under the Act by direct evidence. The whole process of smuggling, for evading payment of Customs duty consists of different links. The links aid and abet each other, sometimes through a remote control (para 9). In the case of Poonam Plastic Industries v. C.C., 1989 (39) E.L.T. 634 (Tribunal), the Tribunal in para 18 had observed as under :- 18. We are aware of the difficulties the Customs face in ascertaining the correct value in circumstances when the deals are between two parties, the facts are not visible, and the transaction is covered by a veil of secrecy. Actual value cannot be proved with mathematical precision. In such conditions, reasonable help can be taken of the documents available and other c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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