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TMI Blog1995 (10) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants have been imposed under Section 112(a) of the Customs Act, 1962. 2. The appellants have stated that they are partnership firm, who had imported a consignment of 47 packages containing 47 sets of Evinrude 10 HP KERO Outboard Motors Manual Start (OBMS) 20" shaft C/W fuel line/and tank at a total cost of US $ 9629.00 CIF Bombay i.e. US $ 175 per set under invoice No. 16390 dated. 30-12-1992 They filed a Bill of Entry dated 5-5-1993 at ICD, Delhi. These goods are stated to be parts of paper oriented boats used by fishermen at South Indian Coasts and the same was supplied by M/s. Mustang Marine Co. Hongkong, who are also one of the dealers of M/s. Outboard Marine Corpn. Asia Ltd. Hongkong (M/s. OMC for short), who are manufacturers of the impugned goods. The department on investigation and search on 3-8-1993 found incriminating documents and the same were seized under a panchnama on the basis of search and investigation, it was alleged by the department that the appellants are sole selling agent of the manufacturers of M/s. OMC, who had also supplied 4 such numbers to one M/s. Shalimar Works Ltd., Calcutta at US $ 1040.60 CIF per piece. This price was CIF, Calcutta as quoted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also called upon to show cause as to why penalty under Section 112(a) of the Customs Act, 1962 should not be imposed on each one of them for deliberately misdeclaring the value and producing apparently bogus, manipulated and forged price lists dated 25-1-1991 and 18-1-1993 and apparently attempting to conceal facts which appeared to be in the conscious knowledge of Shri P.K. Himatsingka with an intention to evade duty. 4. The appellants have sent their reply dated 15-1-1994, wherein they submitted that the show cause notice was based on conjectures and surmises and the value declared on the basis of invoice was correct value. They submitted that the transaction value was for kerosene operated OBMS and not for petrol operated one as was being relied upon in the impugned show cause notice. It is also stated that M/s. Shalimar Works Ltd. had imported only 4 items instead of 47 imported by the appellants. The appellants had taken delivery of the goods which had become outdated and which the manufacturer had discontinued manufacturing for past two years and as such they have sold the entire remaining stock consisting of 47 units at a very low discounted price to clear off the old st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny appeal. Therefore, the question before us is only pertaining to undervaluation of misdeclaration of the value of the goods, imposition and confiscation of fine and penalty in this case. 6. We have heard Shri J.S. Agarwal, the learned Advocate for the appellants and Shri A.K. Singhal, the learned DR for the Revenue. 7. The learned Advocate submitted that the department had relied on the invoice of M/s. Shalimar Works Ltd. which is purchased by July, 1992 while the appellants had purchased their goods 5 months latter in December, 1992 and as the quantity differed from each other. Therefore, the method for determining the assessable value should be on the basis of Rule 5 of the Customs Valuation (Determination of Price of Imported Goods), Rules, 1988 which lays down that a transaction value of the identical goods, in a sale at the same commercial value and substantially the same quantity should be taken into consideration. He submitted that as the quantity in respect of M/s. Shalimar Works Ltd. and that of the importer does not match with the time and quality of the goods imported by the appellants, therefore, invoice value is a transaction value and the same is required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of Customs, Kandla, 2 4 Collector of Customs, Kandla v. 2. Varsha Polyproducts (P) Ltd., Bombay, 4. Pushpak Plastics Pvt. Ltd., Bombay [1994 (74) E.L.T. 151 (Tribunal) = 1994 (4) R.L.T. 673]; (4) Arihant Auto Accessories v. Collector of Customs, Madras [1995 (76) E.L.T. 431 (Tribunal) = 1995 (5) R.L.T. 93]. 8. The learned DR vehemently countered the arguments of the learned Advocate and pointed out that the goods imported by M/s. Shalimar Works and their country were identical. The appellants had admitted in their statement about the goods being comparable and being of the same model. He also pointed out to the proforma issued by the appellants to M/s. Shalimar Works Ltd. He submitted that the goods are identical as can be seen from the respective invoices. He also pointed out to several descrepencies in the invoice inasmuch as the contract No. has been left blank. The L/C also shows less amount of US $ 205. The supplier had not recovered this amount of US $ 205 nor they questioned about the same to the importer. He submitted that M/s. Shalimar Works Ltd. had imported the goods through the appellants, as has been clearly brought out in the evidence by the learned Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1] (2) Peak Craft v. Collector of Customs, [1991 (53) E.L.T. 122] (3) Nav Bharat Enterprises Pvt. Ltd. v. Collector of Customs, [1988 (34) E.L.T. 388] (4) Collector of Customs v. Skefko India Bearing Co. Ltd. [1989 (40) E.L.T. 94] (5) Pradeep Kedia v. Collector of Customs, [1993 (67) E.L.T. 519] (6) Hind Packaging Industry v. Collector of Customs [1989 (40) E.L.T. 168 (7) Metal and Alloys Industries v. Collector of Customs [1989 (40) E.L.T. 207]. 9. We have carefully considered the submissions made by both the sides and have perused the impugned order and the evidence on record. 10. The department has recorded the statement of Shri Pawan Kumar who is attorney holder of the firm. In his statement he has admitted about the low price of the goods and has explained that the supplier has sold the same at throw away price and given special discount price to clear their stock. He has also explained that the price difference is because, their principal is the manufacturer and M/s. Mustang Marine is a dealer whose prices can be higher. The price list of M/s. Mustang Marine Co. in which the price list of Johnson/Evinrude OBM model 10 Rope is shown as HKD8140.00. The price lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue. The importer was confronted with two fax messages from M/s. Outboard Marine Hongkong showing the value of 10 HP as US $ 880.00 (FOB Hongkong) and HKD 8143.00 (ex-factory). The importer explained that their price list is the dealer price and two fax messages must be general price given by Outboard Marine Hongkong. On this point also the Collector found explanation to be totally incorrect and this is not properly explained before us also. Therefore, the findings arrived at by the learned Collector on this point is required to be accepted. The main grounds taken by the importer for variation of the fax price, with that of imported one is that the supplier had stopped manufacturing the items and hence they wanted to sell the goods at throw away prices. On this point the department confronted the importer to explain as to how the listing of the same model in manufacturer price list dated 18th January 1993 was found. For this question the attorney could not answer at all and he has merely explained by saying that it is for the principal to explain this point and they did not know about this point. This clearly discloses that the supplier had not stopped manufacturing of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for reducing the redemption fine. However, the penalty being on higher side, we reduce the same from Rs. 5 lakhs on each of the appellants to Rs. 1 lakh each, in view of the fact that the duty payable only Rs. 5,45,396/-. This is in keeping with the ratio of the judgment noted infra. 11. The appellants has relied on the case of Punjab Niryat Pvt. Ltd. (supra). In this case, the Tribunal has held that the transaction value as declared by the appellants has to be accepted as there was a gap of 7 months 6 days between the imports of M/s. Mash Leather and the impugned imports. Therefore, it was held that the invoice dated 23-3-1990 cannot be treated as an import at or about the same time as the impugned imports. This case is clearly distinguishable as the time gap is very small and the importer is the same. 12. In the case of Honesty Traders (supra) the Tribunal held that for comparison of value, goods should be the same in respect of physical characteristic, quality, country of origin, and timing of import. In this citation, the Tribunal has found on evidence difference in respect of goods which were being compared by the department as one having been imported from Japan havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Choudhury of M/s. United Trade Agency who had also furnished price list of other foreign suppliers whom also they represented. Since price list for the product is thus seen available with the other suppliers, the claim made that M/s. Daniel, the supplier of present consignment did not have any such price list, the Tribunal held, fails to carry conviction. The Tribunal found that the importer themselves say in their letter dated 1-4-1985 to M/s. United Trade Agency (Calcutta) that normally price lists are available and non-availability was only for the time being. The price of 2.95 per kg. is not that of import at the same time as the present consignment. The Bill of Entry has been filed in April, 1985 and hence the Tribunal held that the proceedings initiated against the appellants thereafter the price adopted by the Customs House as ascertained from the same supplier is near enough in point of time is to be accepted. Thus, the charge of under-valuation was held to be established. We find that this citation cited by the learned DR supports the Revenue s point and the same as squarely applicable to the facts of the present case. 17. In the case of Peak Craft (supra), the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1 lakh has held to be appropriate. Therefore, in the facts and circumstances of the case, we reduce the penalty on the firm and on the attorney of Rs. 1 lakh each, in view of deliberate misdeclaration and under-valuation done by the importer. 21. In the case of Skefko India Bearing Co. Ltd. (supra), the Tribunal held that the lower price charged by foreign supplier to exclusive dealer or indentor not to be the assessable value. The Tribunal has held that the assessable value should be on price at which such or like goods are ordinarily sold or offered for sale and also has rejected the plea for quantitative discount. The Tribunal has also held that the invoice price was less than the normal discount to be deemed as assessable value and has rejected the plea of the importer that the quantitative discount should be based on commercial consideration and in this regard as relied on the ratio of the rejected case in General Marketing Manufacturing Co. Ltd..v. Collector of Customs, [1987 (27) E.L.T. 344]. This judgment cited by the learned DR also applies squarely, meets the contention raised by the learned Advocate. 22. In the case of Pradeep Kedia (supra), the Tribunal upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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