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TMI Blog2006 (7) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... , the officers conducted search of the premises of M/s. Trimula (sic) Seven Hills (P) Ltd. and found 2 Nos. of Dual Mode Automatic Fusion supplier 3000 made in USA at by M/s. Aurora Instruments Ins. bearing Sl. No. 0001542-2-1 and 0001542-2-2, along with adopters in a suit case marked Shri Vinod Kumar Khetawat Managing Director of M/s. Tirumala Seven Hills (P) Ltd., who could not produce, on the spot, any documents for procurement or import of the said machines. Later in his statements, the Managing Director informed that the said machines were of foreign origin and imported by M/s. Eastern Exports and Imports Co. Delhi and purchased from them and produced challans for the delivery and other information. 1.4The documents tendered on this appeal reveal the purchase invoice were for Model 2000 SI in both cases and were imported and cleared from customs on Bill of Entry No. 205995 dated 24-02-2000, which had declared the two Fusion Splicer Machine for junction cables with accessories and were supplied on invoice of M/s. Lalasis Trading Pvt. Ltd., Singapore at USD 1875.00 i.e. Rs. 82,125/- and were sold, at Rs. 2,40,000/- each, by M/s. Eastern Exports and Imports Co. to M/s. Tirumala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on other than the manufacturer or producer. Thus from the above it appeared that the induced the Singapore supplier to incorporate in the invoice the tariff description of the goods only suppressing the actual name of the machine as well as country of origin. The actual price of the subject Fusion Splicer machine as offered by Agents Private International, Ontario, Canada following an open query through internet was found to be US$ 20950.00 which is more than ten times of the declared price of US$ 1875. Thus it appears that the importer deliberately suppressed the Country of Origin and the actual name of the goods with a sole motive to evade duty by projecting a lesser price in the invoice. Now, considering USD 20950.00 (i.e. the price declared in the Quotation of M/s. Agents Pvt. International) as the actual unit price for fusion splicer machine of Model 3000 (i.e the same model; which is the subject matter of this notice), the cost for two such machines comes to USD 41900. This price is FOB value of the above two machines as clearly indicated in the quotation comes to Rs. 18,60,075.28. CALCULATION FOB= USD 41900 equivalent to Rs. 18,35,220.00 Freight = SGD 172.15 Equiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Ashim Kr. Chatterjee the representative of CHA M/s. Saikh and Pandit. Therefore, it appears that there was a nexus between Shri Vinod Kr. Khetawat of M/s. Tirumala Seven Hills P Ltd. and Shri Madusudan Bajaj prop. of M/s. Eastern Exports and Imports Co. in importing the two nos. of Fusion Splicer machines under seizure at a grossly undervalued price. From the above it also appears that the said Shri Madusudan Bajaj Prop. of M/s. Eastern Exports and Imports Co. knowingly and consciously had misdeclared the value of the said two nos. of Fusion Splicer machines in the Bill of Entry No. 205995 dated 24-2-2000 and had thus violated the provisions of Section 46(4) of the Customs Act and by such act of misdeclaration his company i.e. M/s. Eastern Exports and Imports Co. had evaded Customs duty amounting to Rs. 10,35,100.07 (as per calculation at para 19) such action on his part has rendered the said two nos. of Fusion Splicer Machines under seizure liable to confiscation u/s. 111(m) of the Customs Act. Thus, Sri Madusudan Bajaj prop. of M/s. Eastern Exports and Imports Co., by his act of misdeclaration of value in respect of two Nos. Fusion spilcer machines model 3000 had rendered h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not be taken as Rs. 18,78,676.03 for the purpose of assessment of Customs duty. (iii) M/s. Eastern Exports and Imports Co. shall not pay the duty amounting to Rs. 10,35,100.07 which had been evaded by them in terms of the proviso of Section 28 (1) ibid. (iv) Penalty shall not be imposed and realized from Shri. Madusudan Bajaj prop. of M/s. Eastern Exports and Imports Co. in terms of Sec. 114A of the CA'62. (v) Penalty shall not be imporsed on M/s. Tirumala Seven Hills P. Ltd. Shri. V.K. Khetawat M.D of M/s. Tirumala Seven Hills P. Ltd Shri P.K. Baid , Director M/s. Tirumala Seven Hills P. Ltd. and M/s. Saikh and Pandit, Custom House Agent, in terms of Section 112(b) of the CA'62. and proceeding was conducted by issue of notice and concluded. Commissioner Found - (a)As regards valuation the goods, declared to be of Singapore originbut was found on examination to be manufactured by Aurora Instruments Inc. USA. There was a gross misdeclaration at the time of filing Bill of Entry; no invoice was furnished from the manufacturer in terms of Rule 10 of the 1988 rules. (b)For valuation; on the validity of and reliability of the quotations, as obtained it was found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-2000, the date of Bill of Entry no. 205995. Insurance has been calculated on 1.125% of the FOB as it was calculated in the aforesaid Bill of Entry No. 205955 dated 24-2-2000." and duty demands of short paid were worked are to Rs. 10,35,100.07 along with penalty of equivalent amount under Section 114A of Customs Act. (b) Thereafter same gross under valuation was arrived by the Commissioner to cause liability to confiscation under Section 111(m) which was upheld and a redemption fine of Rs. 5 lakhs was agreed. (c) Thereafter penalty liability was arrived at under Section 112(a) on M/s. Eastern Exports and Imports Co. and 112(b) and Shri V.K. Khetawat MD. of M/s. Tirumala Seven Hills (P) Ltd., and CHA M/s. Shaikh and Penalty of Rs. 50,000/-. Hence these appeals. 2.1From the following paragraph in the reply to the notice (I) "Model No. 3000, 3500 etc. only show the capacity of Fiber Optic Fusion Splicer. It is not a name of a brand but a general name of the machine like car, truck etc. A car may be of Fiet, Opel, BMW and its price will vary. Similarly, the price of a Fiber Optic Fusion Splicer will vary on the basis of its quality, its specification, facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a source to confirm undervaluation. 2.3The submission of the appellants that, "We certify that the goods are of USA origin" is seen to be clearly indicated on the Invoice No. LLS/3032/2000/INDT21/021200 of the Singapore supplier M/s. Lalsis Trading Pte. Ltd. is to be upheld on perused of the copy of this invoice covering the goods under Import and presented to the proper officer of Customs who appraised the goods which was submitted along with B/E showing part of loading on Singapore, that relevant material has been ignored by the adjudicator the plea of declaration of the country of origin as Singapore as made in the B/E cannot be on a mala fide reason since the invoice to the contrary is not withheld. It has to be accepted that such a declaration on BE, is as an understanding of the persons concerned, with making an Entry on BE's filed. It cannot be an attempt to clear USA origin goods as of Singapore origin. The reliance on decision in the case of Filaments India Ltd. [2000 (123) E.L.T. 954 (Tri.)] is well founded to call such errors to be a Technical Mistake; That cannot be a reason to order confiscation of goods and call for a penalty. 2.4The E-mail relied by the departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the duty demands made cannot survive. Consequently the demands of duty and penalty under Section 114A of the Central Act 1962 cannot be upheld and are to be set aside. 2.7Once liability to confiscation for misdeclaration of country of origin and misdeclaration of value is not being upheld, redemption fine offered and penalty liability under Section 112(b) as ordered is to be set aside. 2.8The Commissioner has found a penalty liability under Section 112(a) on M/s. Eastern Exports and Imports Co. by misdeclaration and no penalty was ordered under Section 112(a) in the operative parts of the order. The only conclusion that could be drawn is that either the Commissioner has not applied his mind or he did not consider the visit of penalty under 112(a) to be called for or to be upheld. 2.9In view of the findings arrived, we would not go into the other pleas made by the appellants an facts of the role played by them or other grounds, as urged and the question of bar of limitation on demands being made before us. 3.1Appeals, in view of findings to be allowed after setting aside the order. 3.2Order set aside. 3.3Appeals allowed. (Pronounced in Court on 4-7-2006) - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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