2003 (1) TMI 403 - AT - Customs

Tribunal grants waiver due to unreliable evidence in under-invoicing case

The tribunal found that the evidence presented by the DRI was not reliable enough to establish a prima facie case of under-invoicing against DPC and the ... Stay/Dispensation of pre-deposit Issues Involved:1. Allegations of under-invoicing by DPC.2. Authenticity and evidentiary value of duplicate invoices with suffix 'A'.3. Involvement of high seas buyers in the alleged under-invoicing.4. Liability and penalties imposed by the Commissioner of Customs.5. Waiver of pre-deposit of duty and penalties.Issue-wise Detailed Analysis:1. Allegations of Under-invoicing by DPC:The Directorate of Revenue Intelligence (DRI) received information that DPC was under-invoicing imported goods. The modus operandi involved issuing two sets of invoices: one with understated values and another with the suffix 'A' showing the correct prices. Additional payments were allegedly made through undisclosed banking channels. The DRI seized documents during searches at DPC and Anil Mody's premises, including fax messages indicating under-invoicing.2. Authenticity and Evidentiary Value of Duplicate Invoices with Suffix 'A':The main evidence against DPC was the duplicate invoices with suffix 'A'. Anil Mody, in his statements, denied knowledge of these invoices and claimed they were indicative of a payment dispute rather than under-invoicing. Dungarmal Doshi also denied any additional payments and called the 'A' suffix invoices forged. The DRI's evidence included faxed invoices and handwritten notations, but the authenticity of these documents was questioned. The tribunal noted that the documents were several years old, not authenticated by banks or ODC, and their origin was not disclosed.3. Involvement of High Seas Buyers in the Alleged Under-invoicing:Statements from high seas buyers (Suparshva Industries, Alfa Transcore Industries, and Transtamp Laminators) did not corroborate the under-invoicing allegations. The buyers admitted to paying lower prices but denied knowledge of under-invoicing or making additional payments. The tribunal observed that there was no evidence of additional payments made by the buyers to DPC.4. Liability and Penalties Imposed by the Commissioner of Customs:The Commissioner confirmed differential duty and imposed penalties on DPC, Anil Mody, and the high seas buyers. The penalties were based on the alleged under-invoicing and additional payments. However, the tribunal found that the evidence presented was not strong enough to establish a prima facie case against the appellants. The handwritten entries and faxed documents lacked authentication and clear authorship, casting doubt on their reliability.5. Waiver of Pre-deposit of Duty and Penalties:The tribunal granted waiver of pre-deposit of duty and penalties for DPC and the high seas buyers, including Doshi, Anil Mody, and A.G. Deshmukh. The tribunal noted that the evidence against them was not sufficient to establish a strong prima facie case. The absence of corroborative evidence of additional payments and the questionable authenticity of the duplicate invoices led to the decision to waive the pre-deposit requirements.Conclusion:The tribunal concluded that the evidence presented by the DRI, including the duplicate invoices with suffix 'A' and faxed documents, was not reliable enough to establish a prima facie case of under-invoicing against DPC and the high seas buyers. The tribunal granted waiver of pre-deposit of duty and penalties, emphasizing the lack of corroborative evidence and the questionable authenticity of the documents.