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TMI Blog2006 (12) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... that in such cases the importer should obtain pre-shipment certificate and where the invoice value was less than 465 US$ per MT, the import required a licence. 2. Subsequently it was found that a consignment of (Tin Free Sheets Seconds/Defective) sought to be cleared under Bill of Entry No. 404351 dated 20/6/02 were actually tin sheets/coils. This consignment was imported through CFS CONCOR and comprised a quantity of 48.851 tons and the sheets were of width above 600 mm. The price declared was US$ 200 per metric ton. As the import was invoiced at a unit price much below 465 US$, also in the case of earlier imports, the imports were felt to be in violation of policy provisions. Therefore, goods lying in the factory covered by the Bill of Entry dated 27/5/02 and 16/4/02 were seized under a mahazar dated 22/06/02 and the goods covered under the Bill of Entry No. 404351 dt. 20/06/02, lying at CFS, CONCOR were seized on 25/6/02. Representative samples from the seized goods were drawn and got tested at National Metallurgical Laboratory (NML) and were found to be tin sheets of width of above 600 mm. Shri Prem Gupta, Partner of M/s. Baburam Premchand, deposed in his various statements th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of past clearances. (8) To confiscate 68.4 MTs of tin coils/sheets seized from the factory of the importer under Section 111(d), (l) & (m) of the Customs Act, 1962. (9) To hold 31.6 MTs of tin coils/sheets of width above 600 mm valued at ₹ 7,22,792/- already sold by the importer to be liable for confiscation under Section 111(d), (l) & (m) of the Customs Act, '62. (10) To hold 67.13 MTs of TFSSD coils valued at ₹ 8,59,776/- used to conceal 100 tons of Tin Sheets/Coils mentioned at 4 above were liable for confiscation under Section 119 of the Customs Act, 1962. (11) To confiscate 48.851 MTs of tin sheets covered by Bill of Entry No. 404351 dated 20/06/02 valued at ₹ 11,20,005/- under Section 111(d), (l) & (m) of the Customs Act, 1962. (12) To impose penalty on M/s. Baburam Premchand under Section 114A in respect of past clearances. (13) To impose penalty on M/s Baburam Premchand under Section 112(a) in respect of consignment covered by Bill of Entry No. 404351 dated 20/06/02. 3. In reply it was submitted that the goods had been cleared only after verification by customs. The DRI had not verified the stock of 31.6 tons. Value of the imported goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advised the supplier to mis-declare the description and value of these goods. The value declared had to be rejected and re-determined in accordance with the value of contemporaneous import of similar goods. The following value was adopted in respect of various Bills of Entry as shown in the table in the SCN. Details of contemporaneous imports of Tin Sheets (Secondary/defective) imported through Chennai Port. Bill of Entry No./Date Description of goods Overseas supplier Unit price Per PMT 398572/28.05.2002 Tin Sheets (Defective/Secondary) Euroferco N.V. Belgium US $465/- 400157/04.06.2002 Tin Sheets (Defective/Secondary) Euroferco N.V. Belgium US$465/- 407039/02.07.2002 Tin Sheets (Defective/Secondary) Euroferco N.V. Belgium US$465/- 389055/10.04.2002 Tin Sheets (Defective/Secondary) Sehgal GMBH, Germany US $475/- 393031/03.05.2002 Tin Sheets (Defective/Secondary) Sehgal GMBH, Germany US $475/- 6. As the importer had not challenged the differential duty demand of ₹ 7,43,752/- on 100 tons of tin sheets/coils, the Commissioner determined the same as amount of duty due. He decided that 68.4 MTs of tin sheets/coils valued at ₹ 15,64,525/- under seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd under Section 114(A) ibid, and also imposed penalty of Rupees one lakh under Section 112(a) of the Customs Act for rendering the goods covered by Bill of Entry No. 404351 liable for confiscation. 8. In the instant appeal filed against the impugned order, the appellants have argued that the SCN in the subject case had been issued by the DRI officers and that the same was not valid. Though the SCN acknowledged that there was no contemporaneous import of identical goods, the department enhanced the assessable value without valid reasons and adequate proof of contemporaneous imports thus violating principles of natural justice. They cited various case law such as, Jindal Strips Ltd. v. Commissioner of Customs, New Delhi, Eicher Tractors Ltd. v. Commissioner, Rajkumar, Knitting Mills v. Commissioner, State of Punjab v. Baldev Singh - 1999 (84) ECR 545 (SC) in support. Therefore, the differential duty collected should be refunded to them. As the goods had been cleared by the customs after examination, seizure of the same by DRI and further proceedings initiated were illegal. The SCN had to be set aside and the extra duty collected should be refunded to them along with interest. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been legally imported. It was submitted that penalty was not imposable under Section 114(A) when penalty was levied under Section 112(a). The Ld. Consultant for the appellants produced case law in the matter of CC Kandla v. Sahil Trends and Ors. (supra) in support of his above argument and that redemption fine was not imposable where goods were not available for confiscation and they were not redeemable. Citing Jindal Strips Ltd. v. CC, New Delhi, it was argued that in the absence of special circumstances indicated in Section 14(1) of Customs Act, 1962 and Rule 4(2) of Customs Valuation Rules, 1988, transaction value could not be rejected. Relying on the decision of the Bangalore Bench of the Tribunal in Orion Systems v. CC, Cochin 2005 (192) ELT 1117 (Tri.Bang.), which was upheld by the Supreme Court, it was argued that when Bills of Entry relied upon by the department to enhance the value was not available on record, it could not be concluded that the goods imported on such Bills of Entry was identical to the goods imported by the assessee. Claiming support from the decision of the Supreme Court in Rastriya Ispat Nigam v. CC, it was argued that penalty was not imposable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not confiscated. It is also claimed that they had deposited duty demanded in the order prior to the issue of show cause notice and therefore penalties under Section 114(A) and 112(a) were not imposable. 13. From the statements obtained from Shri Prem Gupta it is obvious that the appellants had deliberately mis-declared the description, of the goods. In the case of latest import the assessee also had admittedly advised the supplier to conceal tin sheets in tin free sheets seconds and defective coils, which the supplier had not followed. The appellants have not denied that the goods under seizure are tin sheets/coils except 16.5 MTs covered by S. No. 17 to 23 and 27 & 28 of the annexure to the mahazer dt. 20/06/02. It would appear that out of the past clearances of tin sheets/coils in the guise of TFSSD, 100 minus 16.5 MTs were tin sheets/coils. There is no dispute that 48.851 MTs seized from CFS CONCOR are tin sheets liable for confiscation for import in violation of prohibition as the same are of width above 600 mm and invoiced at less than 465 US$. These goods are liable for confiscation under Section 111(d) of the Customs Act, 1962. They are also liable for confiscation under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, goods not in the custody of customs cannot be confiscated as in the instant case as the goods had not been released under bond. 16. The classification ordered under CTH 7210.90 in respect of goods covered by Bill of Entry No. 404351 dt. 20/06/02 is appropriate. The argument of the appellants that copies of Bills of Entry relied on had not been furnished to them before enhancing the assessable value of the consignments of tin sheets imported by them and the same was violation of principles of natural justice carries considerable force. Principles of natural justice require that the assessee be put on notice of all the information relied on before deciding any allegation against the assessee, especially to raise assessable value whereby his duty liability also gets enhanced. The penal liabilities including fine on the appellants are linked to the quantum of value suppressed. So also the interest liability confirmed in the impugned order. With the value being enhanced, profit comes down and so also should the fine. The Tribunal, in AL-FALAH (Exports) v. CC, Surat reported in 2006 (198) ELT 343 (Tri. LB), decided that paying the duty due before issue of SCN subsequently confir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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