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TMI Blog1996 (5) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... ire group of appeals, has filed any cross-objection. 4. On various dates between 7-9-1993 and 4-7-1994, the respondents caused import of Poppy Seeds (Khas Khas) declared to be of Pakistani origin, at the declared price of Rs. 10/- per kg. Since khas khas is considered to be a consumer good of Agriculture origin and the same falls within the negative list of the policy and specific licence is required to cause the import, they were not cleared. It also appears that the goods imported were undervalued and hence market enquiries were conducted. The records show that the importers in all the matters chose to waive issuance of show cause notice and during the personal hearings which were given on initiation of the adjudicating proceedings, they pleaded to have caused the import bona fide as import of the said item was permissible under Open General Licence during the earlier policy period. The importers also are said to have pleaded that the khas khas imported were of Pakistani origin which were of much inferior quality viz-a-viz Indian khas khas and the correct price quoted for khas khas of Indian origin can not be applied as the standard for the purpose of valuation. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the working out of the M.O.P. is produced; (ii) There is no evidence of contemporary imports. He has observed that the adjudicating authority has satisfied himself as to the inferior quality. He has also considered the fact that some consignments of similar goods which the importer did not get released, were put to auction, where the price realised was only Rs. 21.38 and Rs. 40.58 per kg. and hence assessing the M.O.P at the price of Rs. 74/- per kg. was not justified. Feeling the Orders-in-Original passed by the adjudicating authority to be fair and reasonable, the Commissioner of Customs(Appeals) has held that no modification in these orders is called for. He has thus rejected all the appeals filed by the Department. Aggrieved by the same, the present set of appeals have been filed where also, the issues raised are the same as those raised before the Commissioner of Customs (Appeals). With no cross-objection filed, the aspect as to the validity of confiscation does not arise. 9.1 Shri K.M. Mondal, the ld. SDR has submitted that provisions have been made in Section 125 of the Customs Act, 1962 to permit the importers to pay fine in lieu of confiscation, where the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is quoted at Rs. 74/- per kg. and even assuming that khas khas imported are inferior quality that can be sold at Rs. 74/- per kg. The price quoted in the same paper does not differentiate between Indian and imported quality and there could not be any justification in overlooking the same. He pleads that in addition to that, prices are also quoted in Spices Market Weekly published by the Spices Board of India, a Government sponsored body. There also, during the relevant period, the prices of khas khas are shown at Rs. 100/- per kg. and the ld. SDR has pleaded that even taking the prices of inferior quality of khas khas in Indian Market, which is Rs. 74/- per kg. the M.O.P. would be 570% which is much above 100% arrived at by the appellate authority. 9.5 Submitting on the approach adopted by the appellate authority, the ld. SDR has pleaded that the evidence from the market enquiry is available in record and the same have been overlooked. He has referred to the appeals filed by the Department before the Collector of Customs (Appeals) and has stated that the grounds were specifically raised and in spite of that, the same have not been considered by the appellate authority on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration. To substantiate the same, the ld. advocate has referred to the decision of this Bench in Collector of Customs v. K. Hargovind Das reported in 1992 (57) E.L.T. 143 (Tribunal). 10.2 On the merits, the ld. advocate has referred to the Orders-in-Original and has pleaded that the adjudicating authority has himself made a visual inspection and has opined that the khas khas imported by the respondents had lot of black particles indicating that it required lot of cleaning and removal of its black particles and obviously the value can not be equated with the quality not having any such impurities. 10.3 The ld. advocate has further pleaded that the department has not taken samples of the imported khas khas so as to compare them with even the lowest variety of Indian khas khas and abstract comparison can not provide any basis for comparison. Further, as is pleaded by the ld. advocate, the price quotations relied upon by the Department are for 50 kg. whereas the imported quantity is about [30.8] Mts. and obviously when such a bulk quantity is offered sale, there would be a tendency towards lower price. 10.4 Referring to the subject import, the ld. advocate has pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome guideline to work out the M.O.P., it is feared that blind adoptation thereof may at times, lead to unjust calculation. The universally accepted concept of profit is the one that results in actual net earnings to the importer. This can be arrived at on deduction on all actual expenditure whether or not, they fall within the generalised formula given. This miscellaneous expenditure germane to the imported items, have to be excluded from the price actually realised or is expected to be realised, to come to the actual profit margin. The correct criteria thus appears to be the one where all legitimate expenditure and the duty element as also the CIF value becomes deductable from the local market price or the price realised, to arive at the profit derived. 14. There exists a debate as to whether the market price prevailing on the date of import or on the date of order releasing the goods, ought to be considered. If the criteria is to deprive the importer from the profit that he could derive, the price prevailing on the date of release can be the relevant price. However, some contrary views also exist and this being not the material issue for consideration here, there is no need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have weighed with the authorities below is that the importers had to incur some additional expenditure. Though, as held earlier, this aspect can not be overlooked and is rightly not overlooked by the authority below, there is no data available to show what exact amount is spent or extra expenditure incurred in this regard and as has been held by the Tribunal in M/s. Jain Exports Pvt. Ltd. v. Collector of Customs - 1991 (51) E.L.T. 579 (Tribunal) for claiming such extra deduction, adequate data ought to have been provided. The importers do not seem to have provided such data, making it rather difficult to ascertain whether the conclusion to fix the redemption fine at the lower rate than the one which could be worked out on the probable price realisation, as given by the importers themselves, is justified and the discretion used is judicious. (c) Having challenged the said aspect initially by alleging undervaluation and at the first appeal stage by pleading that the entire M.O.P. is not covered up in the quantum of redemption fine, the Department has brought on record, that the local market price is much higher than what has been pleaded by the importers. Pleading that khas khas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r M.O.P. is the normal market price. Further, the basic concept in the auction sale and normal market sale are different. The auctions are held at places other than at regular commercial places, and have so many conditions attached, that the same would generally not attract a normal buyer and with "normal buyer" not participating the concept of "higher bidder" creeps in; such auction sales therefore, could not provide the correct criteria. That apart, even accepting the same on the standard, the price realised ranges from Rs. 21.35 to 40.58 and with realisation of Rs. 40.58 per kg, the margin of profit would be around 230% and vide ranging difference will exist. 19. Unless and until these aspects are properly examined, it appears difficult to conclude as to whether the discretion exercised is just and does not want any interference. 20. There is a vide ranging variations and differences in the redemption fine imposed and what the Department claims to have been imposable. There is also an order from another competent authority confirming the redemption fine of about 500%. 21. Because the re-examination of the aspect in the light of observations made above, may call ..... X X X X Extracts X X X X X X X X Extracts X X X X
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