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TMI Blog2014 (8) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... nce (DRI) conducted search of the premises of M/s Laxmi Trading Co., Amritsar. The search of the office premises of the above firm, residential premises of Shri Arun Kapoor, Shri Om Prakash Kapoor and Mrs. Madhu Kapoor were undertaken and incriminating documents were recovered. The statements of the above persons were also recorded. In addition, search was also conducted in the premises of other importers of the above goods by the DRI and incriminating documents recovered. The investigation revealed that M/s Laxmi Trading Co., Amritsar is a proprietary firm of Mrs. Madhu Kapoor and day-to-day operations of the said firm were undertaken by Shri Arun Kapoor, husband of Mrs. Madhu Kapoor. It was further revealed that the appellant firm had submitted forged/fabricated documents to the Customs resulting in evasion of customs duty. (ii) In her statements on 4.11.2008, Mrs. Madhu Kapoor informed the DRI that her husband Mr. Arun Kapoor was looking after day-to-day operations and he was solely responsible for the operation of the said firm. Shri Om Prakash Kapoor, in his statements dated 7.12.2006, confirmed that his son Shri Arun Kapoor was engaged in import of poppy seeds from Turkey i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance documents etc. which showed undervaluation. From these documents, it emerged that the minimum and maximum price of while poppy seeds from Turkey were as follows:- Period Country of exportation Minimum value of poppy seeds USD/MT Maximum value of poppy seeds USD/MT July - Sept, 03 Turkey 975 1395 Oct - Dec,03 -do- 1500 1500 Jan - Mar, 04 -do- 1610 1665 Apr - June, 04 -do- 1460 1610 Oct - Dec, 04 -do- 1830 2080 July - Sept,05 -do- 2960 2960 Oct - Dec,05 -do- 3054 3054 July - Sept, 06 -do- 1750 1750 (v) The Public Ledger, a reputed journal which reports the prices of commodities traded at London, also indicated that the price of white poppy seeds of 99.5% purity varied from 1500 USD PMT to 2000 USD PMT during September, 2006 to December, 2006. The information obtained from UN COMTRADE Prices (Commodity Trade Statistics Database) also indicated that the average price of poppy seeds imported from Turkey into India ranged from USD 868.26 to 1196.10 PMT for the year 2003, USD 1350.83 for 2004, USD2271.62 for 2005 and USD 1948.54 for 2006. As against this data, the value declared by the appellant was very low and, therefore, it appeared that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Bureau of Narcotics, Gwalior and for obtaining this permission, the details of the contract entered into with the foreign supplier has to be furnished and the appellant had accordingly furnished details of contracts entered into with the foreign supplier and based on such contracts, the appellant was granted permission to import poppy seeds. Since the appellant had entered into long-term contracts, the price as on the date of contract is the relevant price and not that prevailing on the date of import. Reliance is placed on the decision of this Tribunal in the case of Bureau Veritas Vs. Commissioner of Customs, Mumbai - 2003 (156) ELT 688 (Tri-Mum) affirmed by the Hon'ble Apex Court as reported in 2005 (181) ELT 3 (SC) in this regard. (v) The Revenue has led no evidence of contemporaneous import of goods for enhancing the value as proposed in the show-cause notice. It is also argued that the statement of Shri Arun Kapoor cannot be relied upon as he has retracted his statement immediately on 9.12.2006 and a retracted statement cannot be relied upon. (vi) The appellant had imported both yellow poppy seeds and white poppy seeds whereas the price adopted for confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered and out of these invoices, the lowest value of USD 1460 has been taken. The invoice showing the said lowest value of USD 1460 is invoice No. 7418 dated 20.7.2004 issued by M/s Zimra of Turkey to M/s Motilal, Khari Baoli, Delhi, which is one of the relied upon documents. Similarly, for the other quarter also the value has been taken from the contemporaneous imports made by other importers. Only for the last two quarters i.e. April - June, 2006 and July - Sept, 2006, the data given in Public Ledger has been taken. Therefore, it is incorrect to say that the department has relied on information given in the insurance documents and not those in the contemporaneous invoices. He also placed reliance on the decisions of the Hon'ble Apex Court in the case of Ispat Industries Ltd. - Commissioner of Customs, Mumbai 2006 (202) ELT 561 (SC), Rajkumar Knitting Mills (P) Ltd. Vs. Commissioner of Customs, Bombay - 1998 (98) ELT 292 (SC), Varsha Plastics Pvt. Ltd. Vs. Union of India - 2009 (235) ELT 193 (SC), & Commissioner of Customs, Vishakhapatnam Vs. Aggarwal Industries ltd. - 2011 (272) ELT 641 (SC) in support of his various contentions. Accordingly, he pleads that the appellant shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the confessional statement of the accused, if found to be voluntary, can form the sole basis for conviction. If retracted, court is required to examine whether it was obtained by threat, duress or promise and whether the confession is truthful. If the statement made can be corroborated by other evidence of general nature, then also the retraction can be rejected. In the present case, we find that the undervaluation admitted by Shri Arun Kapoor is corroborated by the other documentary evidences available on record, which indicated a higher price for import of the identical /similar goods and, therefore, the retraction made by Shri Arun Kapoor cannot be accepted at all. It is also a settled position in law that if the retraction was not addressed to the officer before whom the statement was given, it cannot take away the effect of the statement as held by the Hon'ble High Court of Allahabad in the case of Zaki Ishrati Vs. Commissioner of Customs & Central Excise, Kanpur - 2013 (291) ELT 161 (All.). 5.4 As regards the reliance placed by the appellant on the South India Television case (supra) and Taito Watch Mfg. Inds. Case (supra), the question considered was whether export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sha Plastics Pvt. Ltd. (supra), the Hon'ble Apex Court held that the availability of evidence of contemporaneous import of the same goods obviously provides the best guide for determination of value of the import of goods but in the absence of evidence of contemporaneous imports, reference to foreign journal for finding out correct international price of imported goods may not be irrelevant because ultimately the assessing authority has to determine value of the goods, at which such goods are sold or offered for sale in the course of international trade at the time of importation. 5.7 Further, we observe that the appellant had not pleaded any financial hardship. Prima facie case, interest of revenue and financial hardship are the three factors which should be taken into account at the time of grant of stay. As noted by us earlier, the appellant had not made out a prima facie case for complete waiver of pre-deposit. Therefore, in the absence of any undue financial hardship, the interest of revenue needs to be protected. The decision of the Hon'ble Andhra Pradesh High Court in the case of SQL Star International - 2012 (25) STR 113 (AP) refers. During the course of argument, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that - "Prices reported in journals/magazines and adoption of the same for the purpose of valuation is not one of the prescribed methods under Rules 5 to 9 of the C.V. Rules and therefore they cannot be adopted or resorted to". So far the ruling of Hon'ble Apex Court in the case of Varsha Plastics Pvt. Ltd.(supra) is concerned, the facts in that case were the assessee had been found to have mis-declared the description, quality and value of the goods in the Bill of Entry. Further the assessee had admitted mis-declaration and waived show-cause notice. Such are not the facts obtaining in the present case. Further the quotations in trade journals are only indicative and do not give the exact transaction value. 12. That insurance documents of third parties cannot be relied upon as these are not the documents prescribed under the valuation rules. Further it have been held that value declared in insurance policy may very for various reasons, and the same is not reliable for customs valuation, Mihir Enterprises 2008 (227) ELT 75 (Tri.). 13. That so far as parallel invoices are concerned it is admitted fact that the same has not been recovered from the appellants. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case, the statement should be admitted in evidence, in the interest of justice. From the impugned order it appears, Mr.Arun Kapoor was not examined as a witness in the proceedings. Thus, the statement is not reliable, for failure to examine Mr. Kapoor as a witness. 16. Thus in the facts and circumstances I find that there is a strong prima facia case in favour of the appellants. The offer to pre-deposit another ₹ 15 lakhs in addition to payment already made, is fair for the purpose of stay. Thus, the appellants M/s Laxmi Trading Co. is directed to pre-deposit ₹ 15 lakhs within four weeks and report compliance on …………………………… On such compliance of pre-deposit, the balance of dues adjudged against shall remain stayed during the pendency of the appeals. DIFFERENCE OF OPINION In view of the difference of opinion between the two Members, the following points are placed before the Hon'ble President for reference to the third Member:- (i) Whether the statement of Shri Arun Kapoor can be relied upon, notwithstanding it subsequent retraction as held by the Hon'ble Member (Technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in the contract entered into by the appellant with the foreign supplier much before the actual imports is not relevant and the price of the contemporaneous imports have to be adopted for assessment purposes as held by the learned Member (Technical) relying on the decision of the Hon'ble Apex Court in the case of Ispat Industries Ltd. - Commissioner of Customs, Mumbai - 2006 (202) ELT 561 (SC) and Rajkumar Knitting Mills (P) Ltd. Vs. Commissioner of Customs, Bombay - 1998 (98) ELT 292 (SC). OR The contract value is relevant for determination of value as held by the learned Member (Judicial) (iii) IN the absence of a prima facie case and financial hardship, the pre-deposit should be ordered for an amount of ₹ 1 crore as held by the learned Member (Technical) relying on the decision of the Hon'ble Andhra Pradesh High Court in the case of SQL Star International - 2012 (25) STR 113 (AP) Or Pre-deposit of ₹ 15 lakhs would suffice as held by the learned Member (Judicial). 2. Shri D.B. Shroff, Sr. Advocate along with Shri Prabhat Kumar, Advocate appeared for the assessee and Shri K.S. Mishra, learned Addl. Commissioner (AR) appeared for the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een relied upon is procured by the DRI from their own sources and does not bear any stamp or signature of any person. He would also submit that the contemporaneous import which the DRI is relying upon is incorrect inasmuch as the said documents have come from a third party and that form the appellant's premises nothing incriminating was found. He would also submit that the Revenue has not adduced corroborative evidence as to the additional repatriation of value by the appellant to overseas suppliers. At this juncture, he would draw my attention that overseas suppliers invoices in the name of the appellant and submits that the stamp of the Indian Bank, through which the documents were negotiated is to be noted. He would also submit that the entire investigation is based upon the documents which were unearthed in the case of Arushi Exports and the said Arushi Export's case came before the bench and Bench in the Stay Order NO. S/705-709/13/CSTB/C-I dated 22/4/2013 granted an unconditional stay, by recording that the Revenue has not provided any basis or evidence for dispute except for a bland statement that there exist a cartel and the cartel determines the prices. He would dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y according to the Customs Act and Valuation Rules made thereunder. Subsequently, he would read the statement of Shri Arun Kumar from the show-cause notice and submit that there was a categorical admission as to the undervaluation of the goods and repatriation of the amount through Hawala. He would submit that statement which is given by Shri Arun Kapoor is in his own handwriting and is a voluntary statement. He would also submit that voluntary nature of statement can be ascertained from the fact that the appellant had deposited an amount of ₹ 16.5 lakhs. He would submit that judgment of the Hon'ble Supreme Court in the case if Ispat Industries Ltd. and Tribunal's decision in the case of Bayir Extracts Pvt. Ltd. is correctly relied upon. He would also submit that the retraction on which the appellant heavily relies upon is also not correct inasmuch; and produces a copy of the letter which was written by the DRI, Sub Unit, Amritsar. After reading the said letter he would submit that the DRI authorities have categorically informed that the retraction letter of Shri Arun Kapoor is not received in the office of Sub Unit Amritsar and Delhi Zonal Unit, New Delhi. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave not recorded any statement of any individual who had been a conduit through whom the Hawala transaction took placed. (ii) Secondly, I agree with the view of the learned Member (Judicial) as regards the retraction that there is letter annexed at page No. 183 of the appeal memorandum vide which Sri Arun Kapoor had sent retraction letter addressed to the Addl. Director General of DRI. The said letter is reproduced below: Dated 9th December, 2006 To The Additional Director General DRI, Zonal Office, New Delhi Sub: Retraction of statement taken on 7 th and 8 th December by officials of DRI. Sir, Our premises were searched and I was taken to DRI Office at 7 PM in the evening on 7 th December, 2006. We were kept there for two days and my statement was recorded twice on 7 th and 8 th. I was never allowed to come out of the building at DRI's office at Lodhi Road during the course of my detention there. I was shown at the Reception gate of the building as if a fresh pass was made on 8 th December, while whole night I was detained in DRI's office on 7 th night. I was forced to write statements about under-invoicing and hawala payment concerning out imports of Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the goods. In my considered view statement recorded on 7 & 8.2.2006 has been retracted and the subsequent statement does not indicate any undervaluation which would lead to a prima facie conclusion that there is no statement which is incriminating. (iii) Thirdly, besides the said statement, I find that there is no much corroborative evidence, which has been recovered from the appellant's premises so as to indicate that there was an undervaluation. The invoice and the document which has been shown to me by learned AR did not instill any confidence to hold that those are values of contemporaneous import which were higher; for the reason that the said invoices are not authenticated by any authorities as being genuine. The specimen copy of the said document, which has been relied upon by Revenue does not bear any signature nor does it match with the invoices recovered from the appellant's premises. The address of the importer on the documents which were recovered from Shri Arun Kapoor did not match with the address on documents procured by DRI from their own sources. To come to the conclusion, whether this document is to be relied or not, in my view would need deeper con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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