9911796707
TMI Blog2012 (3) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... rter, Proprietorship firm 16,51,308.21 5,46,308.81 3. M/s. Opel Trade Corporation, Kolkata Applicant, Importer, Proprietorship firm 9,54,150.43 Nil 4. Sh. Vijay Kumar Gupta Co-applicant, Director of . M/s. AVI Trexim Pvt. Ltd., Kolkata and Proprietor of M/s. Bajranglal Vijay Kumar, Kolkata 5. Sh. Sachin Gupta Co-applicant, Individual. Son of Sh. Vijay Kumar Gupta, Director of M/s. AVI Trexim Pvt. Ltd. He also signed several documents and cheques in respect of import of cranes. 6. Sh. Karan Gupta Co-applicant, Individual, Nephew of Sh. Vijay Kumar Gupta, Responsible for maintaining records of imports made by M/s. AVI Trexim Pvt. Ltd., Kolkata and M/s. Bajranglal Vijay Kumar, Kolkata 7. Sh. Rajkamal Singh Co-applicant, Proprietor of M/s. Opel Trade Corporation, Kolkata TOTAL : 1,27,56,868 13,23,839 The above composite application received in the Secretariat of the Commission on 29-4-2011 was registered as SA (C) 96/2011. 2. No SCN was issued in the matter at the time when the present application was filed. The present application was filed under provisions of the Section 127B(2) of the Customs Act, 1962 i.e., after expiry of 180 days from seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the foreign suppliers and Shipping lines through unofficial channels. This modus operandi was adopted by the applicants in order to avoid payment of Customs duty on the freight component of the said goods. 2.3 The applicants hired services of one Sh. Madan Lalwani operating under CHA licence of M/s. M. Dharamdas & Co. (CHA No. 11/100). In respect of declaration of the value to the Customs authorities, the applicants in their application have submitted that the declared value of Rs. 40/- per Kg. of the said goods was suggested by the said Sh Lalwani. The said Sh. Lalwani used to collect 5% of the value of the cranes in cash from the applicants to facilitate smooth clearance of the said cranes. Sh. Vijay Kumar Gupta and Sh. Madan Lalwani were arrested by the DRI, Mumbai on 2-11-2010. The co-applicant Sh. Vijay Kumar Gupta was released on bail on 14-12-2010. 2.4 In the present application, applicant M/s. Opel Trade Corporation submitted that 06 cranes imported by them were still lying in the Port detained by the DRI. The said 6 cranes were also part of the present settlement proceedings. The applicant has admitted that it did not declare entire facts in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement of their cases and grant of immunity from fine, penalty and prosecution. They also prayed for release of the 06 cranes, imported in the name of M/s. Opel Trade Corporation, lying under detention of the Revenue. Application allowed to be proceeded with : 3. A notice dated 5-5-2011 u/s 27C(1) of the Customs Act, 1962 was issued to the applicants and the co-applicants, asking inter alia, as to why their application should be allowed to be proceeded with. Vide their reply dated 11-5-2011 the applicants replied that their application may be allowed to be proceeded with as they complied with all the conditions stipulated u/s 127B of the Customs Act, 1962. The bar under Section 127L of the Customs Act, 1962 also did not apply as this was the first application filed by the applicants. The applicants also prayed that they may be provided an opportunity to be heard. On the basis of the reply submitted by the applicants, the application was deemed to have been allowed to be proceeded with vide orders dated 23-5-2011 of the Bench on file. Report dated 27-6-2011 submitted by the DRI : 4.1 The ADG, DRI, Mumbai submitted a report F.No. DRI/MZU/B/INV-02/2010-11, dated 27-6-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- (c) M/s. Opel Trade Corporation Rs. 14,67,613/-. 4.4 The DRI further submitted that contention of the applicant that no duty liability arose in respect of the cranes which were sold on High Sea Sales basis by them was totally incorrect. However, the DRI did not substantiate the same. Further, the DRI worked out the estimated differential duty liability in respect of the cranes imported and cleared by M/s. A.vi Trexim Pvt. Ltd. and M/s. Bajranglal Vijay Kumar as under : S. No. Applicant's Name Admitted additional duty liability Duty liability as per value taken from importers own records 1. M/s. Avi Trexim Pvt. Ltd. Rs. 1,01,51,408.56 Rs. 1,95,98,898/- 2. M/s. Bajranglal Vijay Kumar Rs. 16,51 ,308.21 Rs. 1,13,66,376/- TOTAL : Rs. 1,18,02,716.77 Rs. 3,09,65,274/- [This was only the estimated duty as the final figures would have crystallized upon issue of SCN.] 4.5 In addition, the estimated duty evaded by the above mentioned two applicants on account of cranes imported by them and sold on High Sea Sales basis to other parties was as under (i) M/s. Avi Trexim Pvt. Ltd. Rs. 2,26,87,070/- (ii) M/s. Bajranglal Vijay Kumar Rs. 4,85,724/-. As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freight at 20% of the value of the cranes whereas they had paid a freight amount far in excess of the same. In fact, as per the DRI, the applicants must be in the know of the actual amount of freight paid by them and yet they have not submitted duty calculations on the basis of the actual freight paid by them. This shows that the applicants have not made true and full disclosure. 5.3 The representative of the DRI also opposed provisional release of the cranes submitting that once the same were released the applicants could dispose them off and it would be difficult for the Revenue to recover the differential duty and other levies that may be imposed on the applicants/co- applicants under adjudicatory or other proceedings including settlement proceedings. Therefore, as per the Id.Representative, the same should not be ordered to be released to the applicants without securing the amounts of differential duty, penalties and interest. 5.4 Considering the arguments of both the sides, the Bench passed an Interim Order dated 26-7-2011 directing both the DRI and the applicants for compliance as under : (1) The respective applicants concerned shall execute a Bond, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied for provisional release of only 8 cranes. The details of the Bank Guarantees and PD Bonds are as under : S. No. Name of Applicant PD Bond Amount & Date Bank Guarantee No., Date and Amount Remarks 1. M/s. AVI Trexim Pvt. Ltd. (For 2 cranes) Bond dated 23-8-2011 for Rs. 80,32,956/- 014GT01112250001, dated 13-8-2011 of HDFC Bank for Rs. 11,42,714/- Differential duty for provisional release 014GT01112280002, dated 13-8-2011 of HDFC Bank for Rs. 3,19,823/- 25% of differential duty 2. M/s. Opel Trade Corporation (For 6 cranes) Bond dated 23-8-2011 for Rs. 2,62,92,590/- 014GT01112290002, dated 17-8-2011 of HDFC Bank for Rs. 18,52,556/- Differential duty for provisional release 014GT01112290001, dated 17-8-2011 of HDFC Bank for Rs. 9,32,178/- 25% of differential duty 6.2 Vide a fax letter F. No. S/26-Misc-41/2011 VA, dated 4-11-2011, the Additional Commissioner of Customs (Imports), Appraising Group VA, New Custom House, Mumbai submitted that the applicant has obtained the provisional release of the above said 8 cranes after submitting Bonds and Bank Guarantees as per the terms & conditions imposed by the Bench in the said Interim Order dated 26-7-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii Sh. Sachin Gupta : He is the son of Sh. Vijay Kumar Gupta and his statement was recorded on 10-8-2011 under Section 108 of the Customs Act, 1962. He admitted that he had knowledge of import of cranes caused by their company M/s. Avi Trexim Pvt. Ltd. and all the work relating to import and trading was looked after by his father Sh. Vijay Kumar Gupta. He used to affix his signatures on the documents only on the instructions of his father Sh. Vijay Kumar Gupta. 7.3 The DRI further submitted that it made enquiries with Sh. Vijay Kumar Gupta to know the present status and location of the 26 cranes imported in the name of M/s. Avi Trexim Pvt. Ltd. and 16 cranes imported in the name of M/s. Bajranglal Vijay Kumar. In his statement recorder on 12-9-2011, Sh. Vijay Kumar Gupta stated that all the 40 cranes (except 2 cranes which were lying at Mumbai Port) imported have been sold by them. Later, vide letter dated 30-9-2011, Sh. Vijay Kumar Gupta submitted the details of buyers of their cranes. Sh. Vijay Kumar Gupta further submitted in the said letter dated 30-9-2011 that 5 more cranes were in the possession of M/s. Avi Trexim Pvt. Ltd. The DRI submitted that it was conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the apparent undervaluation in the import, in order to ascertain the actual value and authenticity of the transactions, the matter has been referred to COIN sources for obtaining additional information, reply of which is still awaited. Issue of the SCN dated 13-12-2011 : 8.1 A Show Cause Notice F. No. DRI/MZU/B/Inv-02/2010-11, dated 13-12-2011 was issued by the DRI, Mumbai Zonal Unit, Mumbai along with the relied upon documents running in two volumes as part of the said SCN. The said SCN dated 13-12-2011 was issued pursuant to the directions for the same contained in the Interim Order dated 26-7-2011. 8.2 The SCN dated 13-12-2011 reiterated the facts submitted by the DRI in its report dated 27-6-2011 and argued by them at the time of hearing on 8-7- 2011. Also the SCN brought out in detail the roles played by the applicants and co-applicants in the present case of duty evasion. The DRI carried forward its investigations after issue of the Interim Order dated 26-7-2011 and crystallized the differential duty amount demanded from the applicants in respect of the 42 cranes. The same are as under : S. No. Name of the applicant Duty paid on declared value Tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential duty and interest that may be adjudged under Section 28(2) of the Customs Act, 1962 in respect of the aforesaid 16 cranes; (v) the aforesaid 16 used cranes, imported and cleared in the name of M/s. Bajranglal Vijaykumar, from Mumbai port during the period from January, 2008 to November, 2008, (details as per "Annexure-D-1") with a declared value of Rs. 3,18,70,460/- CIF (re-determined value of Rs. 7,20,74,089/- CIF) should not be held liable to confiscation under Section 111(d) [read with provisions of Section 11(1) of the Foreign Trade (Development & Regulation) Act, 1992, Rule 11, Rule 14(1) and Rule 14(2) of the Foreign Trade (Regulations) Rules, 1993], and Section 111(m) of the Customs Act, 1962. (vi) penalty under Section 112(a) and/or Section 112(b) of the Customs Act, 1962 in relation to the aforesaid 16 used cranes, imported and cleared in the name of M/s. Bajranglal Vijaykumar, (details as per "Annexure-D-1") rendered liable to confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962, as aforesaid should not be imposed on each of them jointly and severally. (A)(II): M/s. Bajranglal Vijaykumar and Shri Vijay Kumar Gupta are required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act, 1962 in relation to the aforesaid 24 cranes; (v) the aforesaid 24 used cranes, imported and cleared in the name of M/s. Avi Trexirn Pvt. Ltd., from Mumbai port during the period from November, 2008 to October, 2010, (details as per "Annexure-D-2") with a declared value of Rs. 3,99,44,287/- CIF (redetermined value of Rs. 11,44,44,254/- CIF) should not be held liable to confiscation under Section 111(d) [read with provisions of Section 11(1) of the Foreign Trade (Development & Regulation) Act, 1992, Rule 11, Rule 14(1) and Rule 14(2) of the Foreign Trade (Regulations) Rules, 1993], and Section 111(m) of the Customs Act, 1962. (vi) penalty under Section 112(a) and/or Section 112(b) of the Customs Act, 1962 in relation to the aforesaid 24 used cranes, imported and cleared in the name of M/s. Avi Trexirn Pvt. Ltd., from Mumbai port during the period from November, 2008 to October, 2010, (details as per "Annexure-D-2") rendered liable to confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962, as aforesaid, should not be imposed on each of them jointly and severally. (B)(II): M/s. Avi Trexim Pvt. Ltd., S/Shri Vijay Kumar Gupta and Sachin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest that may be adjudged under Section 28(2) of the Customs Act, 1962 in relation to the aforesaid 2 cranes; (v) the aforesaid 2 used cranes, imported and cleared in the name of M/s. Avi Trexim Pvt. Ltd., from Mumbai port (details as per "Annexure-D-3") with a declared value of Rs. 26,50,600/- CIF (re-determined value of Rs. 39,49,994/- CIF) should not be held liable to confiscation under Section 111(d) [read with provisions of Section 11(1) of the Foreign Trade (Development & Regulation) Act, 1992, Rule 11, Rule 14(1) and Rule 14(2) of the Foreign Trade (Regulations) Rules, 1993], and Section 111(m) of the Customs Act, 1962. (vi) penalty under Section 112(a) and/or Section 112(b) of the Customs Act, 1962 in relation to the aforesaid 2 used cranes, imported and cleared in the name of M/s. Avi Trexim Pvt. Ltd., from Mumbai port (details as per "Annexure-D-3") rendered liable to confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962, as aforesaid should not be imposed on each of them jointly and severally. (C)(II): M/s. Avi Trexim Pvt. Ltd., S/Shri Vijay Kumar Gupta and Sachin Gupta are required to show cause to the adjudicating authority as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26.07.2011 of the Hon'ble Settlement Commission should not be appropriated against the penalty that may be imposed on them under the provisions of the Customs Act, 1962 in relation to the aforesaid cranes. 8.5 Due to issue of SCN dated 13-12-2011 which demanded differential duty amount which is more that the duty liability admitted by the applicants, the hearing was re-scheduled from 27-12-2011 to 17-1-2012 to enable the applicants to file fresh application or amendments to their original application. The applicant filed submissions dated 16-1-2012 at the time of hearing on 17-1-2012 seeking to amend their original application. Submissions dated 16-1-2012 filed by the applicants : 9.1 On 17-1-2012, on the date of hearing, the applicants filed submissions dated 16-1-2012 seeking amendments to their original application. In the fresh submissions, the applicants sought to amend certain disclosures made in different columns in their application. In column 6(a) of their application, the following details of the SCN issued in the case were sought to be inserted- 'DRI/MZU/B/Inv-02/2010-11, dated 13-12-2011 issued by ADG, DRI, answerable to Commissioner of Customs (Import) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91,02,202/- towards differential duty (Rs. 1,65,46,763/-) and interest (Rs. 25,55,439/-)" 9.2 In computing duty liability, instead of notional freight @ 20% of FOB value, the actual freight as provided in the SCN is taken to arrive at correct assessable value for the purpose of settlement. The revised table showing the accepted liability are annexed and marked as Exhibit-'CC'. For reference, a copy of the SCN dated 13-12-2011 is annexed and marked as Exhibit-'DD'. The applicants crave leave to refer and rely upon the documents forming part of SCN when produced during the course of hearing. 9.3 The applicants in true spirit of settlement are enclosing herewith as additional evidence in support of FOB value declared at US ports, copies of the purchase invoices of M/s. R.K. Gupta Corporation, USA now made available by them. These copies are hereto annexed and marked as Exhibit-EE'. It would be evident from the same that the value declared by M/s. R.K. Gupta Corporation before the US Customs were not less than their actual purchase value in US, and that the relationship had not influenced the declaration of value. Any of these documents, if found to be false and incorrect, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter of M/s. NGK Trading Company is hereto annexed and marked as Exhibit- 'FF' 9.6 In the matter of M/s. ABS International, wherein the case was settled by this Hon'ble Commission vide Order No. 53/FINAL ORDER/CUS/KNA/2011, dated 21-4-2011, the DRI relied on the actual transaction value under Section 14(1) of the Customs Act, 1962 as against under declared value, to determine the correct duty liability, despite the fact that the shipper allegedly was a related party in connivance with the importer. A copy of the said order dated 21-4-2011 passed by this Hon'ble Commission in the matter of M/s. ABS International is hereto annexed and marked as Exhibit- 'GG' 9.7 There is no reason to deal with the case of the applicants with a different yardstick, and therefore the revised assessable value may please be accepted for the purpose of settlement of the case and for considering the grant of immunities from fine, penalty and prosecution. Hearing held on 17-1-2012 : 10.1 In the hearing held on 17-1-2012 the applicants submitted that the residual method for calculation of assessable value and duty liability adopted by the Revenue was not correct, as the purchase invoices is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expedient, in such circumstances, that the case qua the present co-applicant may also be settled. He has submitted that the entire criteria of admissibility of the settlement application as laid down under Section 127B of the Customs Act, 1962 is satisfied. The co-applicant has prayed for admission of his case, its settlement and grant of immunity from penalty and prosecution. Application of co-applicant allowed to be proceeded with : 12.1 The co-applicant Sh. Mahesh Agarwal was issued a notice under Section 127C(1) of the Customs Act, 1962 asking as to why his application should be proceeded with. Vide his letter dated 6-2-2012, the co-applicant Shri Mahesh Agarwal, through his Advocate, submitted that in order to settle the case in its entirety his application is incidental to the main applicant's application. The applicant prayed that his application may be allowed to be proceeded with. The applications filed on 17-1-2012 by the co-applicant was allowed to be proceeded with under Section 127C(1) of the Customs Act, 1962 vide orders dated 7-2-2012 of the Hon'ble Bench on file. 12.2 Vide Commission's letter dated 8-2-2012 a report under Section 127C(3) of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per Chartered Engineer Certi-ficate (in USD) CIF value Assessed as per Chartered Engineer Certificate (in Rs.) Duty paid at the time of clearance (in Rs.) 1 2746203, dated 9-2-11 58000 2665100/- 85000 3905750/- 942606/- 2 2746204, dated 9-2-11 65000 2986750/- 100000 4595000/- 1108949/- 3 2746192, dated 9-2-11 85000 3905750/- 122000 5605900/- 1352917/- 4 2746214, dated 9-2-11 80000 3676000/- 107000 4916650/- 1186575/- 5 2746209, dated 9-2-11 35000 1608250/- 49200 2260740/- 545603/- 6 2746202, dated 9-2-11 80000 3676000/- 109000 5008550/- 1208754/- TOTAL : 4,03,000 1,85,17,850/- 5,72,200 2,62,92,590/- 63,45,404/- 14.2 The aforesaid 6 cranes were assessed at a total value of Rs. 2,62,92,590/- and a duty of Rs. 63,45,404/- was paid by the applicants in respect of the same at the time of clearance on 7-3-2011. As these 6 cranes were about to be given 'out of charge', the DRI received intelligence that these cranes in fact belonged to M/s. Avi Trexim Pvt. Ltd. and were attempted to be cleared in the name of M/s. Opel Trade Corporation, who are only name lenders. Scrutiny of the import documents revealed that the initial value de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llogical. These transactions have supposedly been undertaken by Shri Ranjan Gupta at USA, prior to the exportation of these cranes. However, Shri Ranjan Gupta has not participated in the investigations even when 2 summonses were issued to him. Besides, during the ongoing investigations, Shri Vijay Kumar Gupta was asked to submit the original invoices of cranes imported by them or in alternative the original purchase invoices of M/s. R.K. Gupta Corporation, USA. However, Shri Vijay Kumar Gupta did not submit these documents. Therefore, in absence of the data relating to actual transaction value, the value of the aforesaid cranes have been determined by applying the Custom Valuation Rules, 2007 and based on the local sale prices available in the original private records recovered from the premises of the applicants. The reasons, method and manner in which the values of these cranes have been re-determined are explained in detail in the show cause notice dated 13-12-2011 issued to the applicants. The Revenue reiterates the same and craves leave to refer to arid rely upon the same in the ongoing proceedings before this Commission. 14.4 The DRI further submitted that as regards ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (Over and above the duty on the declared assessable value in respect of 6 cranes imported in the name of M/s. Opel Trade Corporation.) This amount is finally assessed duty and has not been disputed. The applicants are wrongly trying to take credit of the difference on duty paid on the assessed values at the time of clearance of 6 cranes and the duty payable on the declared values of the said 6 cranes. This amount of Rs. 18,76,515/- is not available to them. 5. 4-10-2011 7,64,810/- Recovered by DRI towards duty from M/s. Manu Carrier Corporation (as per letter dated 4-10-2011) From the private records of the applicants, it was gathered that one P&H 650 crane (Sr. no. 30527 was sold to M/s. Manu carriers for a consideration of Rs. 41,50,000/- plus sales tax. The partner of M/s. Manu carrier also confirmed that he had purchased the above cranes for Rs. 41.5 Lakhs plus sales tax. Based on the sale price the CIF value of the crane was worked out to be ₹ 30,10,402/- (as against the declared CIF value of Rs. 18,47,659/-). Admitting the re-determined CIF value, partner of M/s. Manu Carrier voluntarily paid the above amount towards the differential duty, interest and other lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 13-12-2011 as against notional freight, no amendment in disclosure of duty liability has been made by the applicants. The applicants have not accepted any arbitrary valuation obtained by the DRI through Chartered Engineers as the actual value of the goods without any influence of the relationship, with supportive evidence is available on record. 15.4 The applicants have further stated that they are aware of the consequences of submitting false evidences, which would render the application to fail, and even immunities granted may be revoked. Hence, they would not gain anything by submitting false documents for settlement of their cases. None of the documents submitted by the applicants have been proved to be incorrect in the investigations. The applicants have co-operated fully for the settlement of their cases by making true and full disclosures. 15.5 The applicants have prayed for condonation of the delay in filing the present submissions. The submissions were to be filed by 28-1-2012 whereas the same bear the date of 31-1-2012 and have been filed on 1-2-2012 in the Secretariat of the Commission. The applicants have prayed for hearing in the matter before passing an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t thereof (at Exhibit-'M' colly to the application for settlement). 17.2 The applicant has further affirmed in his Affidavit that he had worked out the duty liability in the application for settlement, on the basis of the above correct transaction values shown in the certificates backed by authentic data of the values declared before US Customs taken as FOB value, and by adding thereto notional insurance @ 1.125% of FOB value and notional freight @ 20% of FOB value, to arrive at the CIF value. By adding 1% of CIF, to such CIF value, the assessable value was computed. The applicable duty on the same was calculated as per prevailing exchange rate on the date of importation and the interest under Section 28AB @ 13% was computed on the differential duty liability. 17.3 After admission of the case, a SCN bearing file No. DRI/MZU/B/Inv-2/2010-11, dated 13-12-2011 was issued by ADG, DRI. On receipt of the same, the differential duty liability was revised by him. For computing the revised differential duty liability, instead of notional freight @ 20% of FOB value, the actual freight as provided in the SCN was taken to arrive at correct assessable value for the purpose of settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,91,02,202/- towards differential duty (Rs. 1,65,46,763/-) and interest (Rs. 25,55,439/-) G. In true Spirit of settlement, the applicant also submitted as additional corroborative evidence copies of the purchase invoices of M/s. R.K. Gupta Corporation, USA in respect of the subject cranes. These additional corroborative evidence were submitted in support of the correct transaction value declared in the certificates issued by M/s. R.K. Gupta Corporation/the data of FOB value declared at US ports. A comparison of these purchase invoices vis-à-vis the value declared at US Ports would show that the value declared by M/s. R.K. Gupta Corporation before US Customs were not lower that their actual purchase value in US, and that relationship had not influenced the declaration of value/actual transaction value. H. I say that I am not seeking the computation of duty liability by taking the value declared on these purchase invoices, and that the same are submitted only as a corroborative piece of evidence to buttress the submission that actual transaction value declared at US port, which was not disclosed before the proper officer in India, has been admitted by me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility, neither there is anything to suggest that the value declared in US was underdeclared transaction value in FOB terms, nor any motive alleged for under declaring the transaction value at US ports. The direct and credible evidence of correct FOB value transacted in the matter is submitted by me in true spirit of settlement with absolute frankness by surrendering to the jurisdiction of this Hon'ble Commission. M. The applicant has further submitted that when direct and credible evidence is made available on record. Preference to any arbitrary and presumptive evidence would lead to mis-carriage of justice. N. The applicant has stated that in numerous cases, the DRI has itself relied on the value declared before US Customs authorities. O. In the matter of M/s. NGK Trading Company, the applicant-importer undervalued the goods in connivance with US exporters who issued two invoices - one for actual commercial transaction and the other for much lesser amount for Customs purpose. The correct value was arrived at on the basis of value declared before US Customs as evident from the chart reproduced in the Order No. 72/FINAL ORDER/CUS/LKP/2009, dated 17-8-2009, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is true and correct according to the best of his knowledge and belief and he believes the same to be true. Hearing held on 28-2-2012 : 18.1 Hearing in the case was held on 28-2-2012. The applicant was represented by S/Shri K.D. Mankar, Sanjay Agarwal and Yogesh Rohira, all Advocates whereas Jurisdictional Commissioner was represented by Shri Mohd. S.I. Faisal, Dy. Director and Shri D.S. Mehta, SIO, DRI, MZU, Mumbai. 18.2 The ld. Advocate of the applicant explained in detail the submissions contained in the amendment to the Settlement application filed by him as well as the affidavit filed on 27-2-2012. He stated that the value declared by the exporter before the US Customs was the true FOB value which is also supported by the Sale Invoices of the impugned goods by the sellers in US. He emphasised that the Respondent Commissioner had not produced any evidence to prove that these are not genuine invoices or are forged documents. On the contrary the applicant has filed an affidavit regarding genuineness of these documents and binding itself that if these documents are found forged or not genuine then he will be liable to all the consequences under the Customs Act, 1962. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Commerce, Chief Foreign Trade Division, are not acceptable to the DRI on their face value without verification and authentication of the same. 19.3 The DRI has recovered certain private records during the course of investigations. These records primarily contain details of the prices at which the applicants have sold the imported cranes in local markets. In addition, the said records also show certain figures allegedly pertaining to the amount of money remitted against import of cranes. The value of cranes at which these were imported is at large variance with the prices at which the same were sold in the local market, suggesting that the declared values of the said cranes were less than the actual value, resulting in evasion of payment of appropriate Customs duty. The DRI has also submitted that a crane, namely Krupp 5160 crane that was imported for a declared value of US $ 1,00,000 vide Bill of Entry No. 970997, dated 11-10-2010 was sold to one person named Sh. Umesh Jindal for US $ 3,70,000 CIF. In another example, one P & H 9125 crane was imported with a declared value of Rs. 23,60,000/- vide Bill of Entry No. 929768, dated 11-1-2010 and the same was sold for Rs. 1,04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vi Trexirh Pvt. Ltd., Kolkata), Shri Ranjan Gupta (son of Shri Vijay Kumar Gupta, who owns and controls the overseas supplier firm M/s. R.K. Gupta Corporation of USA), Shri Sachin Gupta and Shri Karan Gupta to defraud the exchequer of its legitimate revenue by importing used cranes by resorting to fraudulent means, which included misdeclaration of the transaction value of the said imported cranes. Shri Ranjan Gupta supplied used cranes to the applicants by raising manipulated invoices showing highly understated value of the crane with the motive of evading payment of appropriate custom duty. Opposing settlement of the case, the DRI submitted that the whole conduct of the applicants before the Hon'ble Commission was improper as they were trying to mislead, bargain and hoodwink the Hon'ble Commission. Accordingly, the DRI prayed that as the applicants were not making full and true disclosure of their duty liability, the settlement applications of the applicant and the co-applicants may be dismissed and department may be allowed to prosecute them. 19.6 However, vide his report dated 23-2-2012, the jurisdictional Commissioner i.e., the Commissioner of Customs (Import), New Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following value and resultant differential duty which has been admitted as the additional duty liability : S. No. Name of the applicant Value declared Value redetermined Differential duty accepted 1. M/s. Bajranglal Vijaykumar 3,18,70,460 4,22,31,082 36,00,968 2. M/s. AVI Trexim Pvt. Ltd. 3,99,44,287 9,13,99,353 1,16,37,449 3. M/s. Opel Trade Corporation 26,50,600 2,41,78,414 13,08,345 TOTAL : 8,44,65,347 15,78,08,849 1,65,46,762 19.9 The applicant has relied on two cases, settled by this Bench, to buttress his points in respect of valuation. In the matter of M/s. NGK Trading Company, the applicant undervalued the goods in connivance with US exporters who issued two involves - one for actual commercial transaction and the other for much lesser amount for Customs purpose. However, the correct value was arrived at on the basis of value declared before US Customs as evident from the chart reproduced in the Order No. 72/FINAL-ORDER/CUS/LKP/2009, dated 17-8-2009, and the case was accordingly settled. In another matter i.e., of M/s. ABS International, wherein the case was settled by this Bench vide Order No. 53/FINAL-ORDER/CUS/KNA/2011, dated 21-04-2011, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities should be loaded by the actual freight and insurance to arrive at CIF value which has been done by the applicants to arrive at the differential duty of Rs. 1,65,46,762/-. The documents containing FOB values of the goods indicated by US authorities submitted with applications on 29-4-2011 were sent to the respondent commissioner/ADG DRI on 24-5-2011. There was enough time available to the respondents to verify the authenticity of these documents which does not appear to have been done. Expressing doubt about genuineness of these documents by the respondents at this belated stage is without any basis particularly when the authenticity of these documents has been certified by the importers through a duly notarised affidavit before the Settlement Commission. The Bench, therefore, holds that correct CIF value of the impugned goods should be arrived at on the basis of the aforesaid documents. 19.12 The applicants have relied on two orders passed by this Bench. In the case of M/s. NGK Trading Company, the correct value was arrived at on the basis of the value declared before the US Customs. In the case of M/s. ABS International, the case was settled when the DRI relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts themselves. The amounts of interest settled in respect of the three applicants is as under : S. No. Name of the applicant Amount of interest settled 1. M/s. Bajranglal Vijaykumar 11,36,518 2. M/s. AVI Trexim Pvt. Ltd. 14,18,921 3. M/s. Opel Trade Corporation Nil TOTAL : 25,55,439 The applicants claim to have paid the differential Customs duty and interest thereon as above. The jurisdictional Commissioner will verify the claim of the applicant regarding payment of the differential duty liability and interest. In case any sum remains to be paid on account of the settled amounts of the additional duty liability and interest, the same shall be communicated to the applicants with a copy thereof endorsed to the Commission, within 15 days of the date of this order. The applicant, upon receipt of the said communication from the Revenue, shall pay the same within next 7 days and intimate payment thereof to the DRI, the Jurisdictional Commissioner and the Commission. Fine : A total of 22 cranes belonging .to the three applicants were seized by the DRI. Details of the same were provided in the Interim Order dated 26-7-2011 passed by the Bench. Following fines are impo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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