Import Duty Dispute: Upheld Penalties for Fabric Under Customs Act Sections 111(m) and 112

INTRADE IMPEX PVT. LTD. Versus COMMISSIONER OF C. EX., NEW DELHI

INTRADE IMPEX PVT. LTD. Versus COMMISSIONER OF C. EX., NEW DELHI - 2006 (206) E.L.T. 660 (Tri. - Del.) Issues:
1. Duty demands and penalties related to imports of 'Printed Flock Fabric' by the appellants.
2. Violation of provisions of Section 111(m) of the Customs Act.
3. Imposition of personal penalty on the third appellant under Section 112 of the Customs Act.
4. Requirement for pre-deposits of duties and penalties.
5. Contention regarding the assessment of goods based on transaction value.
6. Commercial nature of purchase prices and understanding between traders and manufacturers.
7. Refusal to allow placement of relevant evidence.
8. Evidence supporting the actual transaction value.
9. Justification for granting waiver of penalties.

Analysis:
1. The judgment concerns duty demands and penalties regarding the import of 'Printed Flock Fabric.' The appellants, two limited companies, and a director were involved in imports from the USA and Belgium between February 2000 to May 2002. The Customs authorities accepted invoice prices from traders in Taiwan, Singapore, and Japan. However, subsequent investigations revealed higher actual transaction values between the manufacturers and Indian importers, leading to duty differentials and penalties under Sections 111(m) and 112 of the Customs Act.

2. The appellants argued that the relevant value for customs assessment should be the sale price between them and the traders, not the manufacturers. They contended that the transaction values with the manufacturers were irrelevant as they were not part of those transactions. Additionally, they claimed that the higher prices in the manufacturers' invoices were not final due to agreements for lower net payments.

3. The judgment highlighted that the evidence, including documents from the manufacturers and seized records, supported the direct transactions between the manufacturers and Indian importers. The Customs Valuation Rules mandate the transaction value as the assessable value, justifying duty demands based on the actual transaction values. The involvement of the third appellant in arranging the duty evasion was also established through clear evidence, warranting penalties under Section 112.

4. The appellants sought a waiver of pre-deposits of duties and penalties, which the Tribunal denied based on the overwhelming evidence supporting the revenue's case. The refusal to allow the placement of relevant evidence, the direct dealings with foreign suppliers, and the clear involvement of the third appellant in the fraudulent activities justified the Tribunal's decision to uphold duty demands and penalties, requiring compliance with deposit deadlines.