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TMI Blog2011 (1) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... garmal as a supplementary invoice in respect of the goods already supplied under an original invoice. In fact, even the source of these alphabetically marked invoices was not disclosed to the appellants. Thus the Revenue could not produce the originals of these documents either. In the circumstances, the contention raised by assessee had to be accepted that the presumption under Sec.139 of the Customs Act is not available in respect of the xerox copies of what appeared to be alphabetically marked invoices issued by ODC to Dungarmal . In any case, Dungarmal did not admit having received such invoices, nor did they admit that payment of any amount mentioned in any of such invoices was made to ODC either through banking channels or otherwise. The statements of Anil Modi, who was apparently confronted with these documents, would not be of any avail to the Revenue inasmuch as, undisputedly, the documents were not retrieved from his premises and also did not mention his name as indenting agent. Whatever was stated by Anil Modi in relation to the alphabetically marked documents will be of no relevance. For all these reasons, unable to accept the said alphabetically marked documents as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act. All these proposals were contested by the parties. It was in adjudication of this dispute that the Commissioner passed the impugned orders in relation to the 9 show-cause notices. (2) Most of the appeals were filed by Dungarmal aggrieved by the demands of duty and penalties. In 3 other appeals, the High Seas buyers have challenged the respective demands of duty and penalties. In the remaining appeals, Shri Anil Modi is aggrieved by the penalties imposed on him under Sec.112 of the Customs Act. At the present hearing stage of these appeals, there has been no representation for the 3 High Seas buyers despite notice of hearing. Shri Anil Balani, advocate, represents Shri Anil Modi. Though he filed a vakalatnama for one of the High Seas buyers, this Bench has not accepted the same considering the conflict of the contentions raised by Shri Anil Modi and the High Seas buyer. Shri V. S. Nankani, advocate has represented Dungarmal Pruthviraj Co. The respondent in these appeals is represented by the ld.SDR. (3) The ld.counsel for Dungarmal Pruthviraj Co. and the ld.SDR for the respondent have both submitted synopses grouping the appeals as follows:- Group I : A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods covered by invoice No.93288 and No. 93292. The ld.Commissioner further relied on Anil Modi s statements to buttress his findings. In one of his statements, Anil Modi had admitted having received commission from ODC based on the higher price of the goods mentioned in the commission-related fax message. Group II : The main appeals in this group are C/473/02 filed by Dungarmal Pruthviraj Co. and C/483/02 filed by Transtamp (I) Pvt.Ltd., both of which are mainly directed against demands of duty. The connected appeals, C/ 470/02 filed by Dungarmal Pruthviraj Co., C/484/02 filed by Ajay G.Deshmukh , C/486/02 C/488/02 filed by Anil Modi are directed against the penalties imposed on them. The amounts of duty demanded from Dungarmal Pruthviraj and Transtamp (I)Pvt. Ltd. in this group were determined by the adjudicating authority by enhancing the value of the goods on the basis of 4 invoices retrieved by the DRI from somewhere, viz. No. 53822A, 53823A 53824A all dated 18.9.1995 and No. 53815 A dated 6.9.1995. The adjudicating authority held that, in respect of the goods supplied by ODC under original Invoice No. 53822 dated 18.9.1995, No. 53823 dated 18.9.95, No. 5382 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of such evidence, there could be no valid rejection of the declared value. In this connection, the ld. counsel heavily relied on the Supreme Court s judgement in Commissioner of Customs, Calcutta vs South India Television (P) Ltd. [2007 (214) ELT 3 (S.C.). Referring to the documentary evidence considered by the adjudicating authority, the counsel submitted that the entire demand of duty in Group-I was based on unauthenticated fax messages coupled with misinterpreted statements of Dungarmal Doshi. All the fax messages were received at the premises of Anil Modi when the premises were searched by the DRI officials on 13.5.99. The counsel in this context referred to pages 131 132. At page 131 of the paper book was a xerox copy of a faxed letter dated 24.5.94 of Anil Modi to Derek Turner of ODC reading - CONFIRM WHETHER 38T INSPN REPORT RCVD OR NOT. PLS INFM EITHER WAY At page 132 was a xerox copy of another faxed letter dated 24.5.94 of D. S. Doshi (Mafia) addressed to ODC. This letter reads thus:- We hope that the total is around 38 kgs. Kindly inform us by telephone as soon as it is confirmed. At page 139 was a xerox copy of a document captioned BOOK CREDIT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Dungarmal Doshi, one dated 25.5.99 and another dated 27.5.99 were particularly referred to by the counsel. In his statement dated 25.5.99, Shri Dungarmal Doshi had, inter alia, stated to the effect that the expression 38 kgs used in his letter dated 24.5.94 (page 132/PB) meant US $ 38,000. He had also stated that Modi Bros. had been their indenting agents for procuring materials from ODC initially, but later on they started purchasing materials from ODC directly. This part of the statement of Dungarmal Doshi was used by the adjudicating authority as evidence of Dungarmal Doshi having paid US $ 38,000/- to ODC for the goods covered by invoices No. 93288 and No. 93292. The ld. counsel submitted that the above statement was subsequently retracted by Dungarmal Doshi in his statement dated 8.3.2000 wherein Dungarmal Doshi stated that he had no knowledge about 38 kgs mentioned in the aforesaid letter dated 24.5.94 (page 132/PB). In this connection, the ld.counsel also referred to a letter dated 27.5.99 of the advocate for Dungarmal Doshi addressed to the DRI (Page 167/PB) which was accompanied by a letter of even date written by Dungarmal Doshi to the DRI (page 170/PB). Dungarmal Do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and hence the same was liable to be set aside. (7) The ld. SDR submitted that the Revenue was not required to prove its case with mathematical precision. In this connection, he relied on Devi Dass Garg vs Commissioner of Central Excise, Delhi [2010 (257) ELT 289 (Tri-Del)] wherein it was held thus:- The standard of proof required in the Departmental proceedings under the provisions of the Customs Act, 1962 or Central Excise Act, 1944 or of the Rules made thereunder, for confiscation of goods, confirmation of demand for duty evaded, and imposition of penalty is the preponderance of probability. For establishing to be preponderance of probability, the adjudicating authority or the Tribunal has to evaluate the evidence of both the sides and decide what is most probable This view was taken by relying on the apex court s ruling in Collector vs D.Bhoormull [1983 (13) ELT 1546(S.C.)]. The ld.SDR submitted that the faxed documents were apparently retrieved from the premises of Modi Bros., the indenting agent for ODC, who handled all the purchase orders placed on ODC by Dungarmal Doshi during the material period. He submitted that Anil Modi, who was also present when the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,771.59 after a scrutiny of the 2 invoices with ODC s letter (page 134/PB) to Anil Modi. The unit price of the goods covered by invoice No. 93288 was US$ 585 and that covered by invoice No.93292 was US $ 485 PMT. The unit price for the 2 consignments, on the basis of which Modi Bros. received commission from ODC, was US$ 975 for the first consignment and US$ 825 for the second. The difference between the unit prices in respect of the first consignment was 975 - 585 = 390 PMT and the difference between the unit prices in respect of the second consignment was US $ 825- 485 =340 PMT. On this basis, the extent of undervaluation of the two consignments was determined and the differential duty in respect of Group.I was worked out on the basis of this amount. Ld. SDR urged us to uphold this demand. (9). After considering the submissions, we are of the view that the available evidence is predominantly in favour of the Revenue in Group.I. The most crucial documentary evidence gathered by the DRI and relied upon by the adjudicating authority is the faxed letter of Derek Turner of ODC dated 25.8.94 to Modi Bros, Bombay, the indenting agents of ODC. This letter was received by fax in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated 24.5.94 of D.S. Doshi (Mafia) to ODC by stating that he was called mafia by his friends. The expression 38 kgs used in the letter (page 132/PB) was decoded by himself to mean US$ 38,000 . He also admitted that Modi Bros. had indented for them to purchase the goods from ODC. He did not deny connection with the Bank Advice (page 139/PB) which indicated payment of US$ 37,982/- to ODC. It is pertinent to note that Doshi did not question the authenticity of any of the documents before the investigating agency. His conduct was acquiescent when he was confronted with the documents. He noted the contents of the documents and acknowledged their relevance to his transactions with ODC. In this scenario, the appellant cannot legitimately plead that the facsimiles have no evidentiary value without forensic examination of handwritten entries. (10) The statement dated 25.5.99 was retracted by Dungarmal Doshi on 27.5.99 and the ld. counsel has heavily relied on this retraction. In this connection, the submissions made by the ld.SDR are found to be forceful. Shri Dungarmal Doshi, in his retraction letter addressed to the DRI, alleged that his earlier statement dated 25.5.99 had been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the facsimile copies of documents (pages 132, 134, 139 etc. of Paper Book) which were acknowledged by Doshi to be genuine during the course of giving a voluntary statement under Section 108 of the Customs Act on 25.5.99. We also note that Section 139 of the Act is not applicable to documents received as facsimile copies of originals as in the present case. For this reason, the decision in the case of Bussa Overseas Properties Ltd. cited by ld. counsel in support of his plea for refusing to accept the bank advice (facsimile) as evidence is not applicable. By and large, the contents of the faxed documents were corroborated by the statements of Anil Modi and the statement dated 25.5.95 of Dungarmal Doshi. Considering this corroboration of documentary evidence by oral evidence, we see no reason to find fault with the Commissioner who is said to have ignored Dungarmal Doshi s plea for forensic examination of some of the documents and cross-examination of DRI officers. Neither of these examinations was warranted in the above situation. Thus the Revenue has made out a very strong case in support of the demands of duty on the goods covered by Invoices No. 93288 and No. 93292 ( Group. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 346(Mad)], wherein the Hon ble High Court considered a case of import involving undervaluation of goods and held that a penalty on the importer under Sec.112 of the Customs Act was justifiable even in the absence of mens rea . In other words, therefore, even if it be assumed that Alfa had no intention to evade duty, they were still liable to be penalized under Sec.112 of the Act on account of undervaluation of the goods. Again, as rightly stated by the ld. SDR, such penalty cannot be resisted on the ground that the goods were not physically confiscated. It is enough if the goods are found to be liable to confiscation under Sec.111 of the Act. Misdeclaration of the value of the goods rendered it liable to confiscation and its importer liable to penalty. The only question to be considered is whether the quantum of penalty imposed on Alfa by the Commissioner is reasonable. It is pointed out by the ld.SDR that the enhanced value of the goods covered by the two invoices is over Rs. 29 lakhs. We find that a penalty of Rs. 2 lakhs on Alfa is disproportionate to the offence found against them. Considering the fact that the misdeclaration of the value of the goods was not without the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, in Group II, the question arising for consideration is whether the alphabetically marked invoices gathered by the DRI and used by the adjudicating authority for enhancing the value of the goods can be accepted as valid evidence of undervaluation of the goods by those who filed the Bills of Entry. Xerox copies of these alphabetically marked invoices are found at pages 142, 144, 146 and 148 of the paper book. Though each of these documents purported to have been issued by ODC as invoices covering a certain quantity of CRGO material sold to Dungarmal , it has not been established by the Revenue that the document was issued by ODC to Dungarmal as a supplementary invoice in respect of the goods already supplied under an original invoice. In fact, even the source of these alphabetically marked invoices was not disclosed to the appellants. In this connection, one decision cited by the ld.counsel merits consideration and the same is Collector of Customs, Bombay vs East Punjab Traders, wherein it was held that, where the authenticity of photocopies of the Bills of Entry obtained by Indian Customs from abroad was suspected, any presumption under Sec.139(ii) of the Customs Act was not avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept the alphabetically marked so-called supplementary invoices as evidence of undervaluation of goods. The same principle would apply to the instant case and, consequently, the 3 appeals C/430, C/ 466 and C/472/02 will have to be allowed alongwith the connected appeals filed against penalties. In respect of the goods covered by the remaining 5 Bills of Entry, which constitute the subject-matter of Appeal Nos. C/431, C/467 and C/471/02, the standard chosen by the Commissioner as contemporaneous import for enhancement of value is the import covered by invoice No.93288 dated 30.5.94, which is one of the 2 invoices belonging to Group I. On going through the records, we note that the imports covered by these 5 Bills of Entry are not contemporaneous with the import in Group I covered by Invoice No.93288 dated 30.5.94. Hence the enhancement of value of the goods covered by the said 5 Bills of Entry on the basis of Invoice No.93288 ibid is not sustainable in law. Consequently, Appeals C/431, C/467 and C/ 471/02 are also liable to be allowed alongwith connected appeals filed against penalties. In the result, all the appeals in Group III will be allowed and it is ordered accordingly. (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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