9911796707
TMI Blog2011 (11) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... harth Polymer Ltd., subsequently renamed as Siddharth Area Ltd., Flat No. 13L, 25, Gopala Towers, Rejendra Place, New Delhi (hereinafter referred to as SPL) with Shri Dinesh Aggarwal as its Director, M/s. Mono Acrylic Manufacturing Co. Ltd., Khasra No. 53, Gurudwara Road, Siraspur, Delhi (hereinafter referred to as MAML) with Shri Manish Agrawal as its Director, M/s. Global Enterprises, A-72, Swarup Nagar, Delhi (hereinafter referred to as GE) with Shri Sudhir Kumar Gupta as its proprietor and M/s. Gaitri Exports, 89-90, Industrial Area, Phase-I, Panchkula, Haryana (hereinafter referred to as GAE) with Mrs. Gaitri Devi as its Proprietor, and whose husband Shri Ashok Singla was running this firm, were, during the period of dispute i.e. from February, 1999 to October, 2001, engaged in import of Polycarbonate sheets. The polycarbonate sheets imported were opal white colour meant for signage/advertising industry. 1.1.1 During the period from January, 2001 to October, 2001, SPL imported 52 consignments of opal white polycarbonate sheets from Korea at declared price of US $ 1055 per M.T. out of which while 18 consignments had been purchased directly from the manufacturers in Korea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned customs authorities after accepting the declared value and examination of the goods. 1.2 The officers of Directorate General of Revenue Intelligence, New Delhi, on receiving an intelligence that SPL, MAML, GE & GAE are evading huge amount of Customs duty by misdeclaring the description of polycarbonate sheets being imported by them as having been made out of recycled polycarbonate waste and thereby under declaring the value, searched their office as well as godown premises and also the premises of M/s. Shubh Plastics, Goregaon (West), Mumbai, the consignment agent for SPL, MAML & GE and of - (i) M/s. Hanuman Graphics Pvt. Ltd., Goregaon, Mumbai, and (ii) M/s. Laxmi Sales Corporation, Goregaon (West), Mumbai, the dealers, who were purchasing the polycarbonate sheets from M/s. GAE. Certain stock of imported polycarbonate sheets found in the godown of SPL, MAML, GE and GAE and also in the godown of the consignment agents/dealers - M/s. Shubh Plastics, M/s. Laxmi Sales Corporation and M/s. Hanuman Graphics was placed under seizure. From the office premises of SPL, a bunch of the certificates issued by M/s. Sehwa Polytech Co. Ltd., Korea certifying that the polycarbonate sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising industry, of the type which are imported and marketed by SPL, MAML, GE and GAE, are made out of virgin polymer material and the sheets of this type and quality cannot be made out of this recycled material, that the price of virgin raw material varies from 2 U.S. $ to 3.5 U.S. $ per kg. and the polymer sheets of virgin material are available in the international market at prices ranging from 4 U.S. $ to 6 U.S. $ per kg., that it is not possible to make such sheets out of 100% scrap/waste, that the approximate cost of converting polycarbonate waste/scrap into polycarbonate sheets is about U.S. $ 0.50 to U.S. $ 1 per kg., that price of polycarbonate scrap in international market, as available on internet, is about 0.58 U.S. $ per pound which would be about 1.2 U.S. $ per kg. and, that thus, even if polycarbonate sheets are made 100% out of recycled waste their cost would be around 1.75 U.S. $ to 2.2 U.S. $ per kg. Inquiry was made with Shri Vinay Kumar, Director - M/s. Vergola India Ltd., Mumbai, an importer of polycarbonate sheets, who stated that they are importing polycarbonate sheets made out of virgin material from Israel and that during period from April, 2000 to December, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, these samples along with the samples drawn from the consignments imported by SPL, MAML/GE and GAE were sent to IIT, Delhi and CIPET, Chennai. CIPET, Chennai under letter dated 1-8-2002 and IIT, Delhi letter dated 30-7-2002 reported that the samples drawn from the consignments (non-certified) and the samples sent to them as certified samples appeared to be similar and appeared to have been made from similar material. 1.2.3 Consulate (Eco.), Consulate General of India, Hong Kong on a reference from the investigating officers sent two reports dated 5-7-2002 and 7-8-2002 in this matter. In the report dated 5-7-2002, it was reported that information regarding prices of polycarbonate sheets for export from Korea to India during January, 2001 to December, 2001 has been obtained from Korean Customs and that average export price during this period was U.S. $ 3577 per MT. This report also gave the total export quantity of the Polycarbonate Sheets from Korea to India during January and December, 2001 period as 965.199 MT and its total value as 35,52,685 U.S. $ and on this basis, the average export price per MT came to U.S. $ 3577. The second report dated 7-8-2002 gave the same info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs - SPL, MAML, GE & GAE under Section 114A of Customs Act, 1962; and (d) imposition of penalty under Section 112(b) of the Customs Act, 1962 on Shri Dinesh Agarwal, Director SPL; Shri Manish Agarwal, Director of MAML; Shri Ashok Singla, husband of the proprietor of GAE; Shri Sudhir Gupta, Proprietor of GE, Shri Anand Bhandari, Partner of M/s. Shubh Plastics, Shri Ram Kishore Mandhana, Partner of M/s. Laxmi Sales Corporation and Shri Bharat Kumar M. Rathi and Shri Abhishek Lohia, Director and Manager respectively of M/s. Hanuman Graphics, Mumbai under Section 112(b) of Customs Act, 1962. 1.2.5 The Commissioner of Customs (Adjudication), New Delhi vide Order-in-Original No. 3/GS/CC/DRI/NCH/2006, dated 31-7-2006 in the case against M/s. SPL - (a) ordered enhancement of assessable value from U.S. $ 1055 per M.T. to U.S. $ 3580 per M.T. and confirmed duty demand of ₹ 8,92,88,587/- against SPL under proviso to Section 28(1) of Customs Act, 1962 along with interest on this duty at the applicable rate under Section 28AB of Customs Act, 1962; (b) imposed personal penalty of ₹ 8,92,88,587/- on SPL under Section 114A of Customs Act, 1962; (c) confiscated the seized good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Against the above orders of the Commissioner, SPL and its Director Shri Dinesh Agarwal, MAML and its Director Shri Manish Agarwal, Global Enterprises along with its proprietor, Shri Sudhir Kumar Gupta - and GAE along with Shri Ashok Singla, the person in-charge of this company, filed appeals to this Tribunal. The appeals of SPL and its Director Shri Dinesh Agarwal were allowed by the Tribunal vide Order-in-Appeal Nos. 334-335/2007-Cus., dated 19-6-2007 on the grounds that - (a) since SPL in all the bills of entry had declared the goods as "Polycarbonate sheets" and not as "polycarbonate sheets made out of recycled material" and since the SPL's correspondence with M/s. Sehwa Polytech Ltd. in June, 2000 (which is reproduced in the Tribunal's order) indicated that the sheets being supplied by M/s. Sehwa Polytech Ltd. were, indeed, made out of recycled waste/scrap, the finding of the adjudicating authority that the consignments were misdeclared as regard their description is not sustainable; and (b) the allegation of the misdeclaration of value is based on the allegation of the misdeclaration of description and when the charge of misdeclaration of description is not sustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 16-9-2008 set aside the Tribunal's orders and remanded the matter to the Tribunal for de novo decision with regard to the question of misdeclaration as well as the question of undervaluation. In this regard, observations of Hon'ble Supreme Court are reproduced below :- "At this stage we may state that in all these cases the point which arises for determination is that whether P.C. sheets imported by the noticees were made out of re-cycled or re-generated polycarbonate? This point has not been discussed or analysed in detail by the Tribunal which is the final fact finding authority. After noticing the arguments advanced on both sides, the Tribunal merely states that there is no evidence either on the point of misdescription or value and it straightaway comes to the conclusion that the findings given by the Commissioner are unsustainable. In our view, the impugned judgment of the Tribunal is perfunctory. It does not analyse the evidence on record. Whether the Adjudicating Authority was right or wrong is not being answered by us? Our objection is directed only to the way in which the Tribunal has disposed of the appeals filed by the assessee before it. Therefore, keeping all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter examining all the necessary records, thoroughly examining the goods and getting the same tested, if necessary. (3) The test report dated 30-7-2002 of IIT, New Delhi and dated 1-8-2002 of CIPET, Chennai reporting that the samples drawn from the imported consignments and the standard sample, provided by the Department, on tests, appear to have been made of similar material, are of no evidence value as - (a) the so called standard sample along with manufacturer's certificate certifying the same to be made out of virgin polycarbonate resin, have been obtained through Indian Consulate in Dubai from one M/s. Afro Textiles, behind the back of the appellants and without disclosing as to how the material, from which the sample had been given to the Indian Consulate, had been acquired by them; (b) when the appellants checked up with M/s. Sehwa Polytech and M/s. Bayer Sewon, both the manufacturers have denied having any dealer like M/s. Afro Textiles in Dubai, have denied having issued any certificate and have denied having supplied any polycarbonate sheets to any dealer in Dubai and in this regard they have issued letters countersigned by Indian Embassy in South Korea; and (c) even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to polycarbonate sheets, covers polycarbonate film, foils, strips, plates, etc. Moreover polycarbonate sheets are of a large number of varieties - transparent, optical quality, bullet proof, double walled, etc., with very wide variation in price. Moreover the information about total quantity and value of the goods of SH 3920 61 00 exported from South Korea to India during 2000 and 2001 is unreliable as it is not known as to how this information has been compiled. The cross-examination of Shri T. Joyaraman, Consul (Eco.) who had submitted these reports was not allowed. (9) Cost of production of opal white polycarbonate sheets by M/s. GE plastics in India is not comparable with the cost of production of the imported sheets. Moreover as per explanatory notes to Rule 7A of the Customs Valuation Rules, it is the cost of production of the goods being valued which is to be adopted, not any other cost. (10) The bills of entry pertaining to contemporaneous imports of polycarbonate sheets are of import of other varieties multiwall and polygal (clear) sheets and that too from countries other than South Korea. Therefore these bills of entry are not the evidence of contemporaneous import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sin during the period of dispute was in the range of U.S. $ 2093 - 2114 per M.T. Even in domestic market the sale price of polycarbonate resin during 1999 and 2000 was ₹ 147 - ₹ 192 per kg. Therefore, the declared CIF price of U.S. $ 1040 - 1055 per M.T. for the polycarbonate sheets does not represent the true transaction value. (3) The appellants throughout the investigation, did not cooperate with the investigating officers. When they failed to bring the sample of raw material from the manufacturers, the Department, through Indian Consulate in Dubai located a dealer - M/s. Afro Textiles and the samples of opal white polycarbonate sheets of Hitech and Polyglass brand along with the manufacturer's certificate certifying the same to be made out of virgin polymers were obtained. In the tests conducted by CIPET, Chennai and IIT, Delhi, various properties of the samples procured from M/s. Afro Textiles, Dubai were compared with those properties of the samples drawn from the consignments imported by the appellants and it is on this basis that the CIPET, Chennai and IIT, Delhi opined that the samples procured from Dubai (standard sample) and the samples drawn from the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the polycarbonate sheets supplied have been made out of recycled waste, are not reliable. (8) In view of the above evidence of undervaluation and misdeclaration of description, the adjudicating authority invoking Rule 10A has rightly rejected the declared price of U.S. $ 1040 - 1055 per M.T. and has rightly enhanced the same to U.S. $ 3580 per M.T. and confirmed the duty demands. In this regard, reliance is placed on Tribunal's judgments in cases of - (i) CC, Bangalore v. H.M. Leisure reported in 2006 (199) E.L.T. 464 (Tri.-Bang.) (ii) Mytri Enterprises v. CC, Mumbai reported in 2004 (174) E.L.T. 389 (Tri.-Mum.) (9) Since the average price of polycarbonate sheets for export from Korea to India during 2000 and 2001, as reported by the Consulate General of India, Hong Kong is in the same range as the international price of polycarbonate sheets in different parts of the world during that period and since the quantity of the goods of SH 3920 61 00 exported from Korea to buyer in India during 2000 and 2001, as reported by CGI, Hong Kong roughly matches with the quantity of polycarbonate sheets imported by SPL, MAML, GE, GAE and M/s. Trade EXIM during the same period, the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of misdeclaration of description is linked with the issue of undervaluation. In this case, as mentioned above, all the appellants have claimed that the opal white polycarbonate sheets imported by them are made out of recycled polycarbonate waste and MAML, GE and GAE even declared to goods imported by them as polycarbonate sheets made out of recycled waste, in the bills of entry filed by them. In these circumstances, if the allegation of misdeclaration of description of the goods is found to be correct misdeclaration of value would be implied. 4. Were the imported polycarbonate sheets made out of recycled, regenerated polycarbonate. 4.1 Polycarbonate is a polymer which is chemically synthesized from Biphenyl A. The polymer chips can be extruded into sheets, tubes, etc. There are a large number of varieties of polycarbonate sheets for different applications with widely varying prices. The sheets made out of virgin polymer are transparent. The waste arisen in manufacture of polycarbonate sheets can be reused for making the sheets in two ways. In regeneration process, the waste is re-converted into basic chemicals - Biphenyl A and then re-polymerised. In recycling, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department from M/s. Afro Textiles, Dubai through Indian Consulate in Dubai along with the certificates from the respective manufacturers certifying the samples to be polycarbonate sheet made out of virgin polymer, and the samples from the seized goods imported by the appellants appear to have been made out of same raw material. 4.3 The appellant's plea in respect of the above evidence is as under - (i) The authenticity of the so called "standard samples" of 'Hitech brand' and 'polyglass' brand polycarbonate sheets of Korean origin, obtained from M/s. Afro Textiles, Dubai is doubtful as - (a) there is no letter of M/s. Afro Textiles, Dubai, introducing themselves as dealer of the products of M/s. Sehwa Polytech Ltd., and M/s. Bayer Sewon, Korea; and it is not known as to from where the samples along with the certificates have been obtained; and (b) M/s. Sehwa Polytech Ltd., Korea vide letter dated 3-7-2003 and M/s. Bayer Sewon Ltd., Korea vide letter dated 3-3-2004, both of which were seen by Embassy of India, Seoul and stamped by the Embassy in evidence thereof, have informed that they have never sent any samples to Consulate General of India in Dubai, that they do not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olycarbonate sheets to anybody in Dubai could have been discarded as false if some evidence showing import of polycarbonate sheets by M/s. Afro Textiles, UAE, or some other importer in UAE from whom M/s. Afro Textiles procured those samples, had been produced. But no such evidence about the source of these samples and the certificates has been produced. We also note that in the quality certificate in respect of Hitech brand of sheets, forwarded by the Indian Consulate in Dubai, the Korean manufacturer's name - 'M/s. Sehwa Polytech' is misspelt as "M/s. Sewha Polytech'. Shri Ponnu Swamy/Consul (Eco) in Indian Consulate in Dubai, the person who could throw light on the above points, has not been allowed to be cross-examined. It has been pleaded on behalf of the Department that the letters of M/s. Sehwa Polytech Ltd. and M/s. Bayer Sewon Ltd. denying to have issued the quality certificates and denying to have supplied any polycarbonate sheets to M/s. Afro Textiles, Dubai or to any person in Dubai are not acceptable as evidence, as the same have not been received through Indian Embassy/Consulate in Korea. But we find that these letters bear the stamp and signatures of the Indian Consul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the use of virgin polymer along with the polymer recycled from waste/scrap, about which nothing is known in this case. 4.5.1 On going through the case records we find that Consul (Eco.), CGI, Hong Kong vide his report dated 9-4-2002 to DGRI [page 165 of the Appeal paper book (Vol. III) of the Appeal No. C/640-641/06 of GAE] has reported that Bayer does manufacture polycarbonates from recycling and these are Base Recyclates. This letter is reproduced below "Consulate General of India Hong Kong No. HON/ECO/4/SK/01-03 Dated the 9th April, 2002 T Joyaramen Consul (Economic) My dear Balesh, Subject : Import of Polycarbonate sheets from Korea - reg. Please refer to your letter regarding information on import of Polycarbonate sheets from Korea. As regards the information sought regarding manufacture of Polycarbonate sheets out of regenerated/recycled scrap, it is seen that the Polycarbonate supplied is partly from Bayer Sewon Ltd. and information obtained from sources in Bayer AG Chem indicate that Bayer does manufacture Polycarbs from recycling and these are Base Recyclates and these are manufactured also by partner companies on Bayer AG's behalf. The details obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Allegation of misdeclaration of value. 5.1 Before coming to the question of misdeclaration of value, it would be worthwhile discussing, in brief, the scheme of valuation of imported goods in Customs Act, 1962. 5.2 As per the provisions of Section 14(1) of the Customs Act, 1962 where the Customs duty on any goods is ad valorem, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or, offered for sale, for delivery at the time and place of importation or exportation, in course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale. Sub-section (1A) of Section 14 provides that subject to the provision of sub-section (1), the value of the imported goods shall be determined in accordance with the Rules made by the Government in this behalf. The Rules framed for determining the assessable value of the imported goods are Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (hereinafter referred to as CVR, 1988). As per Rule 3 of CVR, 1988, the value of the imported goods shall be the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es some prohibited methods, some of which are, the value based on - (a) selling price in India of the goods produced in India; (b) price of the goods in domestic market of the country of export or the price of the goods for export to a country other than India; and (c) cost of production, other than the computed values determined for identical or similar goods under Rule 7A. 5.1.1 Thus the situation in which the declared transaction value can be rejected are - (a) non satisfaction of conditions for acceptance of transaction value, as specified in sub-rule (2) of Rule 4 and (b) existence of "reasonable doubt" by the proper officer under Rule 10A, for which as held by the Tribunal in case of CCE, Bangalore v. H.M. Leisure reported in 2006 (199) E.L.T. 464 (Tri.-Bang.), there must be some basis. Some of the situations warranting application of Rule 10A would be misdeclaration of description of the goods, contemporaneous imports of identical goods or similar goods in comparable quantities at much higher prices, import of latest models of goods in brand new condition at very low prices as stock lot sale, export price as declared by the supplier in the country of export being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be determined on the value of similar goods imported into India at the same time as the subject goods. Where there are no contemporaneous imports into India, the value is to be determined under Rule 7 by a process of deduction in the manner provided therein. If this is not possible the value is to be computed under Rule 7A. When value of the imported goods cannot be determined under any of these provisions, the value is required to be determined under Rule 8 "using reasonable means consistent with the principles and general provisions of these rules and sub-section (1) of Section 14 of the Customs Act, 1962 and on the basis of data available in India." If the phrase 'the transaction value' used in Rule 4 were not limited to the particular transaction, then the other Rules which refer to other transactions and data would become redundant. 14. It is only when the transaction value under Rule 4 is rejected, then under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules. Conversely if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question of determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. M.H. Polymer, mentioning that - (a) during 2000 & 2001, the price of polycarbonate sheets for signage/advertisement use was U.S. $ 3.2 to U.S. $ 4.5 per kg., depending upon the quality, (b) in 2002, M/s. GE Polymerland Korea sold polycarbonate sheets to M/s. GE Polymer shapes Singapore at U.S. $ 7.6 per kg. vide invoice No. 38245, dated 8-4-2002; and (c) M/s. SP Pacific Ltd., Tokyo vide letter dated 25-1-2002 had quoted the price of polycarbonate sheets as U.S. $ 6.12 per kg. to M/s. Structural Products Leader, Tokyo. (iv) Invoices produced by Shri Mayank Jain of M/s. GE Plastics showing import price of polycarbonate resin as U.S. $ 1.8 to 2.5 per kg. and its price in Korea as U.S. $ 1.6 to 3.2 per kg. (v) B/E No. 641213, dated 4-4-2000, 643849, dated 29-8-2000, 664099, dated 26-12-2000, 676251, dated 9-5-2001 and 228454, dated 19-12-2001, produced by M/s. Vergola India Ltd. showing import of polycarbonate sheets at much higher prices. 5.3 On considering each piece of evidence along with the appellants' contentions in respect of the same, our findings are as under - 5.3.1 Since as discussed in Para 4.1 to 4.6 above, the allegation of misdeclaration of the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to India of the goods of SH 3920 61 00, as downloaded from the website of Korea International Trade Association. 5.3.2.1 The learned Jt. CDR's contention that the facts that - (a) the average export price referred to in report dated 5-7-2002 of the Consul (Eco.), CGI, Hong Kong is comparable with the price of polycarbonate sheets in different parts of the world and (b) the total quantity of exports of the goods of SH 3920 61 00 from Korea to India during the years 2000 and 2001 as reported in Consul (Eco.)'s report dated 7-8-2002 almost match the quantity of polycarbonate sheets imported by SPL, MAML, GE, GAE and M/s. EXIM Trade during these years, are, in view of Hon'ble Supreme Court's judgment in case of CC, Chennai v. D. Bhoormal (supra) sufficient to raise a presumption in support of the Department's allegation of undervaluation against the appellants, is not correct, as - (i) neither the average price for export to India during the years 2000 and 2001 of polycarbonate sheets, which are of a number of varieties like transparent, optical quality, bullet proof multiwalled, embossed, opaque, opal white for signage/advertising, etc., with wide variation in prices, constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of import of polycarbonate sheets, totally different from the signage/advertising quality sheets - the polycarbonate sheets covered by these Bills of entry are embossed, bullet proof, compact embossed, multiwall, polygala, etc. Thus the goods covered by the bills of entry are not comparable with the goods imported by the appellants. As against this, we find that the appellants have produced copies of bills of entry in respect of import of identical goods from Korea and Taiwan at around the same price during the same period by other importers where the declared price was accepted and no action has been taken (pages 720-727, Vol. III of the compilation of Appeal No. C/625 of 2006 filed by SPL. Pages 565-586, Vol. II of the compilation of Appeal No. C/645 of 2006 filed by MAML.) 5.4 Thus from the above discussion it is clear that none of the evidences mentioned in Para 5.2 are the valid evidence for rejecting the transaction value on the basis of which duty had been paid. Hon'ble Supreme Court in case of CC, Calcutta v. South India Television (P) Ltd., reported in 2007 (214) E.L.T. 3 (S.C.) in Para 6 of the judgment has held that casting suspicion on invoice produced by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porting polycarbonate sheets of prime grade made out of virgin polycarbonate resin in the garb of regenerated/recycled polycarbonate sheets, resulting in misdeclaration of description of such imported goods so as to cause undervaluation thereof and also to evade payment of import duty, investigation was caused making search to the premises of the appellants on 5/6-10-2001. 10. Followed by search, both oral and documentary evidence was gathered by Revenue and also the samples drawn from the seized material were tested in Government laboratories following due process of law. Strangely sample of seized goods was not provided to the appellant by DRI, even though appellants had approached that authority repeatedly. 11. Statements were recorded from following persons in the course of investigation in respect of Sidhartha Polymer : Statement date Name of person whose Statement was recorded 8-10-2001 Dinesh Agarwal, Director of SPL 10-10-2001 Anand Bhandari, Partner of Shubh Plastics, Consignment agent of SPL Summon dated 14-1-2002 Shri Vinay K. Patel appeared 14-1-2002 Ramesh Jain, President & CEO of G.E. Plastics India Ltd. 6-2-2002 M.H. Polimers, Ahmedabad 15-2- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods imported by them was opal white. (Para 4 of show cause notice). Even oral evidence of the traders of appellants suggested the goods supplied by appellants were opal white and used by advertising and signage industry. 16. The appellants having claimed that the imported polycarbonate sheets were made out of regenerate/recycled polycarbonate resins, to ascertain whether P.C. Sheets imported by the noticees were made out of recycled or regenerated polycarbonates, Revenue referred 2 sealed samples drawn from seized goods, to CRCL, New Delhi on 18-10-2001 for testing (Ref : Pages 429-430 of Vol. 2 of Paper Book). That laboratory by a report dated 22-10-2001 suggested Revenue for testing of the sample by CIPET for answering above query. Accordingly, Revenue proceeded to send the samples to CIPET, Ahmedabad. That laboratory categorically informed the authorities by letter dated 6-2-2002 stating that unless raw material sample of recycled P.C. which is said to be used for making the PC sheets is made available for testing, they shall be unable to conduct desired tests (Ref : page 431 of Vol-3 of Paper Book). Accordingly whether the impugned goods were manufactured out of virgin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom scrap material". (Emphasis supplied) Aforesaid position remained uncontroverted in cross-examination of IIT Professor Sri A.K. Gupta on 31-3-2006 (Ref : Page 663 of Vol. 3 of Paper Book). 20. Similarly, another set of sample of both categories i.e. sample of seized goods and "certified sample" of "Hi-Tech" branch and "Polyglass" brand received from Consulate General of India in Dubai was sent to CIPET, Chennai on 17-5-2002. That institute also has same version in respect of all the appellants as that of IIT, Delhi and informed to Revenue by their letter dated 1-8-2002. (Ref : Pages : 476-479 of Vol. 2 of Paper Book). Relevant portion of the report reads as under : "The results appeared in the test report of certified samples and non-certified sample are comparable and appears to be similar. Therefore, it appears that the non-certified samples have been made by similar material as in the case of certified samples." [Emphasis supplied] 21. On the basis of oral and do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oratories were not summoned for examination by Revenue when test report of IIT, Delhi and CIPET, Chennai suggested otherwise. In view of correspondences of the appellant aforesaid it transpires that the appellant was deprived of samples from date of seizure of goods i.e. 6-10-2001 and date of obtaining of sample from Dubai i.e. 12-5-2002 till 28-6-2005. It may be stated that no litigant should be dealt with to the detriment of justice. 24. Relying on Para 68 of order of adjudication, in the course of hearing, Revenue disputed authenticity and identity of samples sent to CIPET, Bhopal and Amritsar by the appellant. Most particularly dispute was raised as to manner of sending of samples by the appellant to CIPET, Amritsar. Accordingly Revenue was directed on 25-2-2009 to find out whether the specimen that was sent to CIPET, Amritsar was under sealed cover. Revenue collected a report dated 27-2-2009 from CIPET, Amritsar. That report says that one sealed sample was received by that Laboratory from the appellant for testing. This has resolved doubt of Revenue and conduct of the appellant did not remain in question by Revenue further. 25. Shri Vinay K. Patel of M.H. Polymers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank Jain explained that manufacturing process of PC sheets out of virgin material and scrap is same. But manufacture from scrap or recycled material is tedious due to poor quality of resin. 26. In adjudication, when oral evidence of certain persons were used against the appellant M/s. Sidhartha Polymers, cross-examination of such persons was called for by the appellant by their letter dated 27-9-2005. But the appellant was not provided such opportunity in respect of all the persons except such examination permitted in respect of 3 or 4 persons. Cross-examination of Shri Vinayak K. Patel of M.H. Polymers was made on 16-3-2006 (at page 658 of Volume 3 of Paper Book). In answer to question No. 16, he stated that Polycarbonate sheets are also manufactured from scrap raw material. This was done by M/s. M.H. Polymers. Similarly in answer to question No. 16 he stated that the ratio of virgin material and scrap material for manufacture of polycarbonate sheets varies from case to case. The goods in question although disputed by Director of GE, he failed to appear for cross-examination. This has failed to provide basis to discard the plea of the appellant. No evidence was brought to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was irrelevant is unsustainable for the reason that the samples procured were "Hi-tech" brand and "polyglass" brand and were same as that was dealt with by appellants. Such brands were of Korean manufacture. That remained undisputed. When equal brands were compared with equals only, there cannot be any grievance of disparity or incomparability. It was also oral evidence of Sri Dinesh Agarwal, Director of Sidharth Polymer and traders that the goods dealt with by them in the trade as supplied by the appellants were opal white and used for advertising and signage industry. This leaves no doubt at all on the "certified samples". Nothing was whispered by them about dealing of regenerated or recycled polycarbonate sheets when preliminary statements were recorded from them as early as search to their premises. 31. Also plea of the appellant that name of the Korean manufacturer appearing in correspondences gathered by Revenue differs is flimsy plea and unsustainable. Even the objection of non-existence of Afro Textiles in Dubai is baseless when the Consulate General of India in Dubai has gathered the sample and informed existence of such concern to Revenue. 32. Appellant has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f evidence on record following due process of justice and granting fair opportunity of hearing to the appellants, there may not be grievance by the appellants and the authority can safely decide the valuation issue in accordance with law, taking advantage of detailed discussion on valuation issue dealt with by my learned brother Sri Rakesh Kumar. In view of the remand proposed as above, it has become redundant to deal with various citations made by both sides. Sd/- (D.N. Panda) Member (Judicial) DIFFERENCE OF OPINION Since there is a difference of opinion between the two members, the registry is required to place the records of these appeals before the Hon'ble President for appropriate orders u/s 129C(5) of Customs Act, 1962 to resolve following difference of opinion : "Whether the impugned orders are liable to be set aside and appeals of the appellants shall be allowed as held by the Member Technical or limited remand of the appeals to the learned adjudicating authority is required to decide the issues on the basis of weight of evidence on record as held by the Judicial Member?" (Pronounced in the open Court on 2-7-2009) Sd/- (Rakesh Kumar) Member (Technical) Sd/- (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the samples drawn from the seized goods. The reports are reproduced herein below :- 38. The first doubt cast upon such reports is due to the fact that M/s. Sehwa Polytech Ltd., Korea and M/s. Bayer Sewon Ltd., Korea denied having issued such certificates, denied having any dealer or distributor in Dubai and denied having shipped opal white polycarbonate sheets to Dubai. There is no letter of M/s. Afro Textiles, Dubai introducing themselves as dealer/distributor of either M/s. Sehwa Polytech Ltd., Korea or M/s. Bayer Sewon Ltd., Korea and there is no explanation forthcoming as to where the samples along with manufacturer's certificates, had been obtained from. No evidence has been produced regarding the source of these samples and the certificates. Therefore, the letters of the manufacturers cannot be discarded as false and are required to be accepted. The contention of the Revenue that manufacturers letters are not acceptable as evidence as the same have not been received through the Indian Embassy/Consulate in Korea is not tenable, as I find that these letters bear the stamp and signature of Indian Consulate in Korea, in token of having seen the same. 39. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generally dark and find use in opaque applications is based only upon the statement of M/s. M.H. Polymers who, as already noted earlier, is a domestic manufacturer and a competitor of the appellants. The further contention that percentage of the recycled material generated is only 5 to 10% of the total raw material and therefore the volume of polycarbonate sheets imported cannot be justified as being manufactured out of scrap or remains of polycarbonate sheets is again based upon the statement of local manufacturers and cannot be accepted as conclusive. 42. No enquiries have been made by the department from the actual user of these sheets in India. On the other hand, samples were shown to the adjudicating authority to establish that the sheets imported are used as a supporting base and are not "glow signed". In some cases, advertising material is put on transparent/translucent polycarbonate sheets and the backlit makes the materials glow. In other cases, advertising material is put on opal white polycarbonate sheets which are not transparent/translucent and the material is highlighted when light falls on it from the front. The appellants have been able to show that the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieties and Customs Tariff Heading 3920 61 covers all types of polycarbonate sheets. In this view of the matter, no reliance can be placed on the Bills of Entry relied upon by the Revenue. On the other hand, the appellants have submitted evidence of contemporaneous import at similar price by M/s. Subam Traders and no show cause notice had been issued to them alleging undervaluation. In contrast to the order recorded by learned Member (Technical), on both issues, namely misdeclaration of description and misdeclaration of value, learned Member (Judicial) has given his finding only on the question of misdeclaration of goods. He has come to the conclusion, by necessary implication, that the evidence on record is not enough to give a definite finding on misdescription of imported goods and it is for this reason that he has directed the adjudicating authority to collect samples of virgin material or "Hi-Tech" brand and "Polyglass" brand polycarbonate sheet from Korean manufacturers or "any other authentic source known to law". His direction of limited remand is contrary to the direction of the Apex Court to consider de novo two questions namely (1) misdescription and (2) undervaluation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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