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TMI Blog2014 (6) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments, accompanying the parcel, the contents of the parcel were declared as 'PERSONAL EFFECTS/CLOTHS/SEE INLAY' having declared value of HKD 720. On examination, the contents were found to be 40,000 pieces of memory cards of 'STRONTIUM' brand Micro SD Memory cards of 2GB capacity, made in Taiwan. Declared were B grade slow microprocessor unbranded made in China. Taking into account the contemporary price of the identical goods, the value of 40,000 memory cards worked out to Rs. 56,36,400/- involving customs duty of Rs. 5,27,342/-. In terms of the provisions of Section 82 of the Customs Act, 1962 the Speed Post receipt meant for Customs declaration, having tracking number EA108-652-615-HK and accompanying the parcel is to be treated as entry for the purpose of the Customs Act. The description and value of the parcel was mis-declared and accordingly the parcel was seized on 09.02.2012. 3. During the course of investigations Shri Aditya Batra initially submitted a photocopy of invoice dated 10.12.2011 while recording his statement on 07.02.2012. Later on, he submitted original copy said to be of the invoice vide letter dated 15.03.20212. In this invoice value of 40,000 memory cards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts for customs purpose, the description of the contents of the parcel was declared as 'PERSONAL EFFECTS/CLOTHS/SEE INLAY' having value of HKD 720. However, no personal effect/cloths were found in the parcel but the same was found to contain 40,000 pieces of 'STRONTIUM' brand Micro SD memory cards (Made in Taiwan), each of 2 GB capacity. We also note that no documents pertaining to these memory cards were found in the parcel. Further a photocopy of the invoice, which was submitted by Shri Aditya Batra on 07.02.2012, reflected the description of goods as 40,000 pieces of Slow Micro Processor B grade (Unbranded Made in China) and total value as HKD 48,000. This invoice did not bear any serial number and the Supplier's name and address was mentioned as 'HAINAN PENG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Yau Building, Portland Street, Mongkok, Kin'. However, the original invoice submitted subsequently by Shri Aditya Batra thought his letter dated 15.03.2012 reflect the invoice number as PO 09/40/11 dated 10.12.2011 and name of the of the supplier as 'PRIDE OASIS HK LTD., HAINAN PANG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Tak Building Kin Hong Kong'. However we find that the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing all the charges of misdeclaration, showing brands goods as unbranded goods and under valuation resulting in differential duty of Rs.5,27,342/- calculated based as contemporaneous imports of identical goods I find that based on intelligence that huge quantity of memory cards was being smuggled from Hong Kong to New Delhi through EMS Speed Post by mis-declaring its description, an EMS Speed Post Parcel having EMS tracking No. EA108-652-615-HK was detained and examined on 15.12.2011 and found to contain 40,000 pcs of Memory Cards. The consignee Mr. Batra (Shri Aditya Batra, Noticee 2), House No. 7, National Park, 1st Floor, Lajpat Nagar, New Delhi through his letter dated 16.12.2011 submitted that the parcel contained personnel effects, which were shipped by their shipper. The recovery of the memory cards is contrary to the declaration filed by Shri Aditya Batra, Noticee No. 2. It is noted that the memory cards were 'STRONTIUM' brand of 2 GB capacity, whereas the same were declared as 'Slow Micro processor B grade (unbranded made in China)' in the copy of the invoice submitted by Mr. Batra with his letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign supplier, arranging imports and further sale in the local market, documentation and payment to foreign suppliers. These statements are therefore reliable and have evidentiary value. Shri Aditya Batra has neither retracted his statements nor is it their case that the same were extracted under threat or coercion. There is no communication about the statement to be drawn under force/threat or coercion made to the undersigned. Thus Shri Aditya Batra stands by the said statements tendered being voluntary and truthful and they are valued piece of evidence. Para 35. I also find that in the Speed Post documents for customs purpose, the description of the contents of the parcel was declared as 'PERSONAL EFFECTS/CLOTHS/SEE INLAY' having value of HKD 720. However, no personal effect/cloths were found in the parcel but the same was found to contain 40,000 pieces of 'STRONTIUM' brand Micro SD memory cards (Made in Taiwan), each of 2 GB capacity. I also note that no documents pertaining to these memory cards were found in the parcel. Further a photocopy of the invoice, which was submitted by Shri Aditya Batra on 07.02.2012, reflected the description of goods as 40,000 pieces of Slow Micro P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also concluded that Strontium brand micro SD memory cards have been smuggled. Further department has been able to establish that there is huge under valuation. Earlier declared invoice value was HKD 720 only. But later on, it was declared as HKD 48000.00 @ HKD 1.20. However when the department was able to show identical imports of Strontium Brand micro SD memory cards, undervaluation was accepted by Shri Aditya Batra and assessable value was determined at Rs.56,36,400/-. It is also on record that invoice was manipulated to suit his design to hoodwink the Revenue to cause injury. 12. It also comes out that invoices which were furnished, were found fake. Shri Aditya Batra in his statement dated 06.3.2012 tendered under Section 108 of the Customs Act 1962, had admitted that as per the invoice of the similar goods shown to him, the value per piece was Rs.140.91 and that total value of the seized goods was Rs.56,36,400/- (Rupees fifty six lakh thirty six thousand four hundred only). 13. From the above stated investigations and facts on record, it clearly cames out that findings of the Commissioner of Customs are very elaborate and upto point clearly bringing out the truth. It is esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtnership unit, who imported goods to the extent of Rs.3 lakhs, I am of the view that separate imposition of penalty of Rs. one lakh on the partner may not be justified. The same is accordingly set aside. Difference of opinion i) Whether the redemption fine of Rs.12 lakh imposed by adjudicating authority, is required to be upheld, as observed by Member (Technical) OR the same is required to be reduced to Rs. 6 lakhs as held by Member (Judicial) ? ii) Whether the penalty of Rs. One lakh is required to be imposed upon Shri Aditya Batra in addition to imposition of penalty on the importing partnership firm as held by Member (Technical) OR the penalty is required to be set aside on the said appellant Shri Aditya Batra, on the ground that partnership firm already stand penalized as held by Member (Judicial) ? Date of hearing/decision : 03/01/14 Difference of Opinion Per. Rakesh Kumar :- 19. The appellant firm M/s Siddhant Enterprises is a partnership firm and Shri Aditya Batra is one of the partners. Shri Aditya Batra imported a post parcel declared to be containing personal effects/clothes with declared value of 720 Hong Kong dollars. The declaration accompanying on the parcel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the redemption fine of Rs. 12,00,000/- imposed by adjudicating authority, is required to be upheld, as observed by Member (Technical) OR the same is required to be reduced to Rs. 6,00,000/- as held by Member (Judicial) ? (2) Whether the penalty of Rs. 1,00,000/- is required to be imposed upon Shri Aditya Batra in addition to imposition of penalty on the importing partnership firm as held by Member (Technical) OR the penalty is required to be set aside on the said appellant Shri Aditya Batra, on the ground that partnership firm already stand penalized, as held by Member (Judicial) ? 20. Heard both the sides on the points of difference. 21. Shri V.S. Negi, the learned Counsel for the appellant, pleaded that there is no justification for confiscation of the goods under Section 111 (l) and 111 (m) of Customs Act, 1962, as Clause (l) and (m) of Section 111 of Customs Act, 1962 are not attracted in case of import through post parcel, that in this regard he relies upon the judgments of the Tribunal in the cases of CC, Mumbai vs. M. Vasi reported in 2003 (151) E.L.T. 312 (Tri. - Mumbai), Kuresh Laila vs. CC, Chennai reported in 2005 (189) E.L.T. 45 (Tri. - Chennai) and Sandhya Jewel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re liable for confiscation under clause (d) of Section 111 in as much as while Clause (d) of Section 111 provides for confiscation of any goods, which are imported or are attempted to be imported contrary to any prohibition imposed under this Act or any other law for the time being inforce, by Notification No. 78-CUS dated 02/4/38 as amended by Notification No. 151 dated 24th December 1938 and No. 44-CUS dated 26th July 1941 issued under Section 11 of the Customs Act, 1962, import of dutiable goods by letter, packet or post parcel is permissible only when such letter, packet or post parcel bears on front a declaration by the sender stating the nature, weight and value of the contents and the Commissioner of Customs is satisfied that the nature, weight and value of the contents of the letter, packet or post parcel has been correctly stated in the declaration, while in this case there is gross mis-declaration with regard to nature and value of the contents and, hence, in any case, the goods having been imported in contravention of the prohibition imposed under Section 11 would be liable for confiscation under Section 111(d), that in any case both the Members have upheld the confiscat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature, weight and value of the contents of the letter, packet or post parcel had been correctly stated in the declaration. In this case, undisputedly the nature of the contents and the value has been grossly mis-declared and hence this import is in contravention of the prohibitions imposed by the Central Government under Section 111 and hence irrespective of the applicability of Clause (l) and (m) of Section 111, the goods would be liable for confiscation under Section 111 (d). Therefore, the appellant's plea that neither the goods are liable for confiscation in view of the judgments of the Tribunal mentioned above nor penalty on the appellant firm or its partner would be attracted under Section 112 is without any merit. 25. Coming to the points of difference, the first point of difference is with regard to quantum of redemption fine. Quantum of redemption fine should be sufficiently high to neutralise to the entire margin of profit, as the basic principal is that no importer should be able to make profit by illicit imports. In this case while the Commissioner has imposed redemption fine of Rs. 12,00,000/- and the same has been upheld by Hon'ble Member (Technical), Hon'ble Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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