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TMI Blog2003 (9) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed under two import licences, dated 23-1-1991 and 12-3-1991. valid for import of items permissible as per the provisions of paragraph 192 of the Import and Export Policy 1990-93, Bills of entry were assessed and clearance of the goods was allowed on declared value. Customs duty of Rs. 30,81,414/- and Rs. 30,26,148/- was paid. After the release of the consignments, a review application was filed before the Collector (Appeals) on the ground that the licences were not valid to cover the consignments; the Collector (Appeals) allowed the review application vide an Order-in-Appeal dated 2-3-1993; the importers filed an appeal before the Tribunal which remanded the case to the Collector (Appeals). The Collector (Appeals) allowed the Department s review application in de novo proceedings and thereafter a show cause notice was issued on 31-5-1994 alleging that the goods imported were covered by Entry No. 31 of Appendix 2B of 1990-93 Policy which read as Concentrate of Alcoholic Beverages and since the importer produced REP import licences which were valid only for items in Appendix 3A of the Policy, the import was unauthorised and the goods liable to confiscation under Section 111 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the goods imported was alleged to be as under :- Finacord Chemicals (P) Ltd. S.R. Nagpal Sons (India) Quantity of the goods imported (in bulk litres) 24,423 36,902 Amount paid under L/Cs @ 1.40 per bulk litre (converted at the exchange rate of 2.2900 = Rs. 100/- prevailing on the date of filing of the Bills of Entry). 34,192.20 = Rs. 14,93,109/- 51,662.80 = Rs. 22,56,017/- + Amount paid by direct bank transfer @ 2.38 per bulk litre, equivalent to US $ 2,66,500, being the actual amount transferred (converted at the exchange rate of US $ 3.8475 = Rs. 100/- prevailing on the date of filing of Bills of Entry) divided proportionately, between the two firms. US $ 1,06,135/- =Rs. 27,58,545/- US $ 1,60,365/- Rs. 41,68,031/- + Amount of Rs. 31,25,000/- (@ Rs. 50/- per bulk litre for 62,500 bulk litres) paid locally, as per Rs. 12,44,547/- Rs. 18,80,453/- the instructions of Mr. Ravi Khosla of M/s. Ravco International Ltd., divided proportionately between the two firms. Total CIF value Rs. 54,96,201/- Rs. 83,04,501/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nacord Chemicals (P) Ltd., I order that :- (a) the declared value of the goods at the rate of 1.40 per bulk litre CIF is not acceptable and the actual transaction value of the goods is determined as Rs. 54,96,201/- CIF. The Customs Duty on the said correct value was not levied/short-levied because of deliberate misdeclaration of value and suppression of the correct value by the importer. I, therefore, order recovery of short-levied Customs Duty of Rs 1,63,74,648/- from M/s. Finacord Chemicals (P) Ltd. under Section 28 of the Customs Act, 1962 read with proviso to sub-section (1) thereof. However, any part of this duty, if finally recovered in relation to the seized goods on deposit in lieu thereof in pursuance of other parts of this order shall stand abated from the said amount of Rs. 1,63,74,648/- held recoverable from M/s. Finacord Chemicals (P) Ltd. (b) I hold that the goods valued at Rs. 54,96,201/- CIF imported by M/s. Finacord Chemicals (P) Ltd. and finally in possession of M/s. MDL are liable to confiscation under Section 111(d) and (m) of Customs Act, 1962. An Order in this behalf is being made in relation to M/s. MDL. (c) I also impose a penalty of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeals. 5. We have heard both sides and carefully considered the rival submissions. Our findings are recorded as under :- (i) Validity of Import : The admitted alcoholic strength of the goods is 59.3% vol., and therefore overproof whisky as per ISI Standards, according to which degrees overproof and under proof are considered, depending on whether the liquid is more concentrated or more diluted than proof spirit. For example, 20 overproof (20 OP) refers to 120% proof spirit and 20 underproof (20 UP) refers to 80% proof spirit. 100% proof spirit is equivalent to 57.1% alcohol by vol. The question that remains to be answered is whether over-proof whisky is a concentrate of alcoholic beverages. We find that in the case of Bussa Overseas Properties Ltd. v. CC(I), Mumbai - 2002 (148) E.L.T. 328, the Tribunal has held that whisky of overproof alcoholic strength is to be treated as concentrate of whisky. In that case the goods were underproof whisky 55% by vol. alcoholic strength and this is what weighed with the Tribunal in holding that the goods were not concentrates of alcoholic beverages requiring specific licence for import on the ground that the goods were covered by seri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank transfer to M/s. Ravco from Habib Bank, New York or Hong Kong, who in turn would pay it to M/s. Morrison Bowmore. 2. Details of the transactions with M/s. Finacord Chemicals (P) Ltd. and M/s. S.R. Nagpal and Sons (India) are as under :- (a) M/s. Finacord Chemicals (P) Ltd. Invoice No. RI/922/91931 @ 1.40 per litre 17250.80 Invoice No. RI/922/91931A @ 1.40 per litre 16941.40 Total paid by letter of credit 34192.20 Invoice No. RI/922/91931 @ 2.38 per litre 29326.36 Invoice No.RI/922/91931A @ 2.38 per litre. 28800.38 Total paid by direct bank transfers 58126.74 Full amount actually paid by Finacord Chemicals (P) Ltd. 92318.94 Duly authenticated copies of invoices and letters of credit are at Annexure A (6 sheets). (b) M/s. S.R. Nagpal and Sons (India) Invoice No. RI/926/91938 @ 1.40 per litre 17103.80 Invoice No. RI/926/91938A @ 1.40 per litre 17151.40 Invoice No. RI/926/91938B @ 1.40 per litre 17407.60 Total paid by letters of credit 51662.80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrison Bowmore Distillers Ltd. was 231,808.50 minus 9976.25 commission = 221,832.25. A signed copy of a Ravco International Ltd. s debit note is as per Annexure C . Mr. Khosla also confirmed that the sum of $ 266,450 received in five unequal instalments from the Habib Bank (Hong Kong) between the period July, 1991 to September, 1991 related entirely to the consignments of spirits bought by Finacord Chemicals (P) Ltd. and S.R. Nagpal Sons (India). It has not been possible to discover the source of the payments received from the Habib Bank (Hong Kong). If necessary, enquiries may please be made from our source at Hong Kong. Mr. Khosla produced five transactions slips which are as per Annexure D . Mr. Khosla was also able to provide copies of the indents received from Finacord Chemicals (P) Ltd. and S.R. Nagpal and Sons (India) which are as per Annexure E . Regarding signed copies of invoices of M/s. Ravco International Ltd., the commercial practice in this country does not require invoice to be signed and hence the copies of invoices forwarded by H.M. Customs in this case are not signed ones. Invoices raised by M/s. Morrison Bowmore Distillers Ltd. in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as to co-relate or link the same to the said goods imported by SRN or FCPL. Apart therefrom, these two invoices refer to the balance sheet which works out to UK 2.3562 and UK 2.319 in the two cases and not UK 2.38, as alleged by the Department. Hence, these documents are not relevant or reliable. As regards the Report of the High Commission of India although the same refers to what is allegedly stated by Mr. Ravi Khosla of RIL, copies of these statements have not been furnished or disclosed to the appellants. There is a reference to receipt of payment by RIL from Habib Bank, New York or Hong Kong, but the documents relating to such payments which are at pages 212 and 213/Vol. II, do not connect either SRN or FCPL or Umesh Nagpal with such payments. On the contrary, as is evident from the letter dated 31-3-1992 written by H.M. Customs and Excise (page 220/Vol. II) records, it is not possible to discover the source of payment received from Habib Bank and enquiries would have to be made directly at Hong Kong. The Commissioner has also relied upon the statements of Umesh Nagpal, particularly, statements dated 8-10-1991 and 9-10-1991 recorded by the Enforcement Directorate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import of undenatured ethyl alcohol from Morrison Bowmore Distillers Ltd. where also the Department had sought to rely on the report received from the High Commission of India, U.K. The evidence relied upon in that case consisted of 4 documents :- (a) a copy of letter dated 1st December, 1992 of M/s. Morrison Bowmore Distillers Ltd. addressed to the Investigation division of HM Customs Excise, Glasgow in Scotland and four internal vouchers totalling to 1,56,000/-. (b) Documents stated to be extracts of sales ledger of MBL. (c) A copy of banker s cheque dated 11-10-1991 for 75,000/- payable to MBL and drawn on National Westminster Bank, UK. (d) Copy of letter dated 13th May, 1994 from K.K. Ajwani, Second Secretary (Trade), High Commission of India, London addressed to the Directorate of Revenue Intelligence in New Delhi. The Tribunal considered the entire evidence and the provisions of Section 139 of the Customs Act relating to presumption as to documents and held that the link necessary to prove payment beyond a preponderance of probability was missing. This decision is applicable on all fours to the present case and hence the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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