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TMI Blog2017 (8) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... de the said orders. The High Court directed as follows:- "5. As a result of the above, this Writ Petition succeeds. Both the impugned orders are quashed and set aside. The Appeal shall now be re-heard by the West Zonal Bench. In order to put an end to the dispute expeditiously, we expect that the Appeal shall be assigned by the learned President to the Members who had not originally heard the subject Appeal. This order and direction also is passed in peculiar facts and circumstances of this case. This order shall not be treated as a precedent in any of the future cases. We clarify that none of the contentions raised by parties have been dealt with by us. Each one of them are kept open for being raised during re-hearing of the Appeal. The Appeal shall be decided in accordance with law. We clarify that our order and direction passed shall not be construed as any departure from the views expressed in the case of Zenith Computers Ltd. v. Commissioner of Central Excise reported in 2014 (303) E.L.T. 336. This Judgment and order of a Division Bench of this Court, to which, one of us (S. C. Dharmadhikari, J.) was a party, impressed upon the Tribunal to avoid any friction and unnecessary d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y M/s. Sartorious Mechatronics India (Pvt.) Ltd., Bangalore (SMIPL). The demand was confirmed and penalties imposed on the strength of above evidence. Aggrieved from the said order, the appellants are before us. 3.1 The Ld. Counsel for the appellants submitted that they were authorized distributor of M/s. Sartorious A.G., Germany since 1997 till March 2005. After March 2005, the appellants started importing the said goods from M/s. Ahmed Systems LLC, Dubai. M/s. Ahmed Systems LLC was authorized distributor of the principal located in Germany for the territory of gulf but not of India. Ld counsel submitted that the invoices produced by the appellants are genuine. He further submits that the key evidence relied by revenue is documents made available by third party, who also happens to be an interested party. He further submits that the documents supplied by third-party are inadmissible and not valid documents. He argued that the letter dt. 3.3.2008 and zerox copies of two unsigned invoices, zerox copy of two more invoices supplied by the Indian subsidiary of the foreign principal have been wrongly relied upon in these proceedings. 3.2 Ld counsel challenged the authenticity of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dubai. and invoices raised by M/s. Ahmed Systems LLC, Dubai on the appellant. He argued that these invoices clearly establish that the Dubai Distributor has purchased the goods supplied at lower price and sold them at much higher price to the appellant which has shown by the appellant before the Customs authorities at the time of clearance of the goods. Therefore, the allegation of undervaluation as appellant used fabricated invoices is not sustainable to support this contention. He relied on the decisions as follows: (1) CC, Mumbai Vs. Bussa Overseas - 2007 (216) ELT 659 (S.C.)] (2) Gayadia Algu Metal Refinary Vs. CC, Mumbai - 1998 (98) ELT 481 (T)] (3) Truwoods Pvt. Ltd. Vs. CC, Vishakhapatnam - 2006 (204) ELT 288 (T) (4) Venus Enterprises Vs. CC, Chennai - 2006 (199) ELT 661 (T) (5) Deepak Enterprises Vs. CC, Kolkata - 2003 (159) ELT 851 (T) 3.4 He argued that Revenue has not procured any evidence to show that appellant has paid more than the declared price i.e. the appellant has paid any amount over and above the transaction value to their supplier. He argued that all the payments were made to the supplier through banking channels only. He relied upon the Tribunals d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supplier of the goods or from their authorized officers. (iii) pricelists are not on the letterhead on the parent company and does not bear sign or logo of the parent company. He further argued that the pricelists for the year 2003 to 2005 and 2007 which are claimed to be evidencing transfer price to the 100% subsidiary are neither manufacturers price list nor are these pricelists authenticated or certified by the parent company. The pricelists for 2003-2004 is a single pricelists depicting transfer prices for both years namely, 2003 and 2004. Ld counsel argued that these pricelists have no evidentiary value and validity in the absence of any authentication by the parent company. The pricelists for the year 2005 is again neither on the letter head of any company, nor does it bear the logo of parent company. Similarly, the price for the 2007 is also neither on letterhead of any company nor bears of logo of company. Therefore, the unsigned and the unauthenticated documents cannot be relied upon to sustain the charge of undervaluation. 3.7 Ld counsel further argued that the transfer price lists supplied by Indian subsidiary in connection with imports made from parent company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacturer price list by 100% subsidiary and the domestic sale price of the model by the appellants clearly establish undervaluation. He argued that the appellants tried to prove the status of the authorised dealer of the German supplier and relied on the certificate of 05.06.1997 of the German supplier. However, it is a fact that the appellants could not produce the said agreement and stated that the same got washed away due to heavy rains. Ld. AR relied on the letter issued by the Indian subsidiary of the foreign supplier confirming that there is no such agreement after 2005. Ld. AR compared the prices of few models declared by the appellants in their bills of entry with the prices in the invoices submitted by the Bangalore office to assert that the declared price was much lower than the said price mentioned on the documents submitted by the Bangalore subsidiary of the foreign company. He further argued that Pramod Shah appellant no. 2, also admitted in his statement dated 26.11.07 accepted the reassessed value. He further relied on the local sale price of the imported goods to assert that they correspond to the value declared in the documents submitted by SMIPL. He relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking print out from old data taking it on any letter head adds no value to the document. The document supplied were not original invoices issued for transactions but only print out form computer database of the company which issued the original invoices. So there is nothing to be surprised that it is not on official stationery. The point to be noted is that these documents were forwarded under cover of letter referred to above and personally brought by Shri N. Ramesh who appeared before the investigating officer in response to summons issued to the company. Only discrepency is that one of the copies of invoices produced is signed while others are not signed. During cross-examination Shri Ramesh was not able to explain this discrepency. It is quite possible that while the printouts were taken for past invoices the person who had signed the original invoice 3010087902 dated 14.04.2005 was available which was not the case of other invoices which were not signed. So I do not find this discrepency to a reason to conclude that there is no undervaluation in this case." 5.2 When the prices in these invoices are compared with the prices at which the appellants have imported the goods it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... torious Germany. The said letter clearly admits that due to involvement of an employee wrong business transactions with the appellants were not as per company policy. It does not disown all the invoices issued during that period. It does not say if the past transactions were made at low prices or just the invoices were wrongly issued. It does not say if the differential price has been recovered from the appellant. The letter only disowns one transaction relating to order no s/1948. The letter does not say that they have received any amounts over and above the price declared by the appellants. In fact the letter raises more questions then it answers. The letter does not give actual invoices of the past imports. The letter is vague to say the least as it does not clearly say if the erring employee had just undercharged the appellants or just forged the invoices while charging full amount. All this needs to be seen in the backdrop of the fact that letter has been provided by SMIPL who is a competitor. 5.4 The appellants have challenged the authenticity of these documents produced by SMIPL through Shri N. Ramesh. It is seen that Shri N. Ramesh was cross examined in this regard and fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sartorius Germany to your company Are they signed and having their Logos? Ans. I have been working for 7 years. We do not go deep to verify whether each and every invoice is signed. Q.18 Are you aware of the policy of German Company in keeping office copies of invoices? Ans. I am not aware. Q.19. I put it to you that these invoices were farbricated and received by you? Ans. I donot know whether it was fabricated. Q.20. Please give the address of your consultant Mr. Nath.? Ans. I do not have his address with me right now. QUESTION PUT BY THE ADJUDICATING AUTHORITY. Q.21. Kindly see your statement dated 14.03.2008, you had stated that the invoices were received from your principals in Germany. Now, are you able to say from 'where you received the invoices? Ans. Yes. The invoices were received from our principals as stated in my letter dated 14.03.2008. It is apparent from his cross examination that he does not know the real source of these documents. He has just been handed over the documents to be given to Customs. He was handed over these documents by Sh Mohan Bhatt GM sales and marketing. Sh Mohan Bhatt has not been examined in this regard. The doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a proof of transaction value. Hon'ble Apex Court in the case of Eicher Tractors Ltd. (supra) and Tribunal in the case of Deepak Enterprises (supra) has held that transaction value cannot be rejected solely on the strength of price list or proforma invoice. In these circumstance we do not find that these price lists are enough to reject the declared transaction value. 5.7 Now we examine the evidence of NIDB data of CONTEMPRANEOUS IMPORTS listed in para 6 of impugned order. "6. NATIONAL IMPORT DATA BASE (NIDB) DATA SHOWING VALUE OF CONTEMPRANEOUS IMPORTS BY OTHER NON RELATED IMPORTERS 6.1 Printer model YDP 03 OCE 6.1.1 The printer model YDP 03 OCE imported by * M/s Rathiopharm India Ltd. from M/s Sartorius, Germany at Euro 354.00 per piece under B/E No. 835830 dt. 26.03.2004 was valued, * M/s Cadila Healthcare Ltd. at Euro 355. vide B/E No. 297986 dt. 31.05.05 * M/s Wockhardt Ltd., at Euro 339.00 under their B/E No. 813567 dated 03.11.2006 * M/s Cipla Ltd. at Euro 400.00 in their B/E No. 218594 dt. 23.07.2007 and * M/s Macleods Pharma. Ltd. at Euro 350.00 in their B/E No. 263422 dt. 07.09.2007. 6.1.2 For the same model, YDP 03 OCE, the prices declared by M/s SEEPL in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 B/Es). The values for the model GD 603 were declared at Euro 95.00 (one B/E) and Euro 100.00 (nine B/Es) in their imports from M/s Sartorius AG, Germany and US $ 95.00 (three B/Es) in their imports from M/s Ahmad Systems LLC, Dubai. 6.5.3 The values for the model GC 1603S-OCE declared by M/s SEEPL were only Euro 158.00 for their imports from M/s Sartorius AG, Germany and USD 158.00 for their imports from M/s Ahmad Systems LLC, Dubai throughout the period of investigation. 6.5.4 The date pertaining to imports of other importers of Sartorius electronic balances is available for other models and other importers also. This data also indicates that M/s SEEPL have been indulging in undervaluation of the goods imported by them on a habitual basis and defrauding the exchequer of huge amounts of duty over a period of at least five years." The appellants have contended that these imports cannot be compared with the imports made by them for the reason that they are bulk importers while the imports listed in NIDB data are retail /one off imports. To rely on the NIDB data it is necessary to show that the imports are at same commercial level. A perusal of the NIDB data shows that the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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