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TMI Blog2007 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... the search as well as the similar samples obtained. 4. Show cause notice dated 3 1-3-2003 was issued alleging that the imported consignments had been mis-declared both in regard to description and value, the allegation being that prime quality goods were claimed as regenerated/recycled and that the goods had been undervalued at around U.S. $1055 per M.T. as against the normal value of over U.S. $ 3500. The notice proposed to recover short levied duty of around Rs. 10 crores under Section 28 of the Customs Act, 1962 and to impose penalty under Section 112 of the same Act "for deliberate mis-declaration of value and wilful suppression of other material facts". Confiscation of goods seized during investigation was also proposed. 5. The appellant contested the allegations; but failed. Under an adjudication order dated 31st July 2006, the Commissioner (Adjudication), New Delhi held as under in regard to the charge of mis-description "74. From the above statements of S/Shri Vinay K. Patel, Subhash Baburao Joshi, Rakesh Jam, Mayank Jain and Vinay Kumar, it has abundantly been proved that as per trade and industry practice, only prime quality PC sheets were used in the advertising/sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the originally assessed value of about Rs. 4.4 crores. As the result of the re-determination of assessable value, the Commissioner ordered recovery of about Rs. 9 crores as short levied duty. The order also imposed penalty of an amount equal to the differential duty on the appellant importer and a penalty of Rs. 1.5 crores on Shri Dinesh Agarwal, Director of the appellant's importer (the second appellant in these appeals). The order also confiscated goods originally cleared provisionally and imposed a redemption fine of Rs. 1.4 lakhs. The present appeals are directed against the aforesaid duty demands, confiscation and penalties. 7. The submission of the learned counsel for the appellants is that the entire order is the result of erroneous noting of facts as regards the allegation of mis-description of goods. The submission of the learned counsel is that the imported consignment were never described in any of the customs documents as recycled or regenerated. The goods were always described only as polycarbonate sheets in import documents. The same was the description in the Bill of Entry filed before customs for the clearance of the goods. The counsel would therefore, submit th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as and Cipet Chennai, while test results from Cipet Amritsar and Ahmedabad of samples sent by the appellant had revealed that the material seized from the appellant was re-generated material. 10. As regards the valuation, the contention of the learned counsel is that the basis adopted by the Commissioner is entirely impermissible in law and in the facts of the case. It is being pointed out that the Commissioner had adopted a purported "lowest average value" of polycarbonate sheets supplies from Korea for 2001 to determine the assessable value of imports made during four years. The submission is that comparable values can be taken only in regard to time. That too in regard to identical/similar goods. According to the learned counsel, an average price for all polycarbonate sheets for an year would fail these requirements. Further, Commissioner's decision has also been influenced by export prices noticed from other countries like Israel arid Taiwan and manufacturing costs in India. According to the learned counsel both these criteria are impermissible. 11. Learned counsel would also submit that the so-called price information furnished by the Indian High Commission at Hong Kong abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prime quality material. He would also point out that chemical test by the IIT and Cipet Madras had confirmed this position. Further, during investigation, the appellant's Director, appellant's dealers had all stated the sheets under import were opal white prime quality sheets used in sinages/advertisement, The learned SDR would point out that investigation has shown conclusively that white sheets for sinages are not produced from scrap but are produced only from prime material. According to the learned SDR, this evidence clearly establish the identity of the goods as prime quality sheets produced from granules and not from scrap. The learned SDR would also point out that even though the appellant had not specifically declared the goods as re-generated/re-cycled material, the effort to pass off all the goods as re-generated/recycled material is clear from the fact that correspondence describing the goods was found during the search of the appellant's premises. He would, therefore, submit that the finding regarding mis-declaration is required to be upheld in these circumstances. According to the learned SDR, once the finding regarding mis-declaration of description is accepted, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is relying on its contemporaneous business correspondence to support its contention that the imported goods were sub-standard/not of prime quality. Following materials are specifically highlighted. (a) Minute of the Board of Directors meeting held on 15-6-2000 deal with defect of materials. Item No. 2 reads as under :- "ITEM NO.2 Authorise to intimate regarding defecting material The Chairman informed the Board about the repeated complaints being received for the defects in the Polycarbonate sheets from the Buyer. After due deliberation following resolution was passed unanimously. "Resolved to take up the matter strongly with Mis Sehwa Polytech Co. Ltd., for the repeated complaints being received and thanking them for their immediate response to the complainants and visit therefrom." Minutes of the earlier meeting held on 28-4-2000 also deals with com plaints of customers about the imported polycarbonate sheets. (b) The appellant sent several letters to Sehwa Polytech Co. Ltd. from March 2000 complaining about "black spots, broken rolls, cracks, variation in thickness, length and width". Samples of defective goods were also forwarded. Appellant's complaint dated June 20, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ref Claim Polycarbonate Sheets seen and verified by your Co. representative and Production Manager Mr. Kaby Cho & Mr. J.H. Kim Dear Sir. We are constraint and sorry to write that your material supplied since December has landed up us in to a big problem. People are claiming huge damages from us and we have to settle the claim immediately to gain trust and for future business in the Indian Market. We have to expedite at the earliest. We estimate minimum of 175 Rolls to be supplied approximately 20 tons material to settle and cool the buyers. As seen by Mr. Kaby Cho & Mr. Kim we noticed following problem in the materials. 1. Color (Big and major problem and if we consider the same It will be more than 2500 rolls.) 2. Shrinkage (Which is not expected in extrusion material) 3. Black spots 4. Broken Rolls (All 2 mm and 3 mm rolls received in last 34 container having 90 rolls in total performed broken which can not be accepted in PC sheets Please understand our situation and we request your goodsetf to expedite the claim immediately without any delay otherwise we will spoil our own market and we have to heavy financial loss. We also appreciate and thank your company for sending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced from scrap. 19. We have already noted appellant's contentions on the above evidence. It is to be noted that the evidence of the revenue is general and theoretical in character. No direct evidence about the mis-declaration of description of any of the consignments has come up in the investigation. Evidence specific to the transactions have to prevail over general evidence. And the materials relating to the transactions like the correspondence between the appellant and the Korean supplier noted in para '17' of this order support only the appellant's version. In the result, we hold that the finding that the consignments were mis-declared as regards their description is not sustainable. 20. The finding regarding mis-declaration of value is the off-shoot of the finding regarding mis-declaration of description. Otherwise, there is no material indicative of the fact that purchases were at a higher price or payments in excess at a higher price or payments in excess of invoice prices have taken place. Therefore, the finding regarding undervaluation is also not sustainable. 21. In the light of our findings above, demand of duty, confiscation and penalties imposed on the appellants are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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