TaxTMI 
TaxTMI 
2003 (12) TMI 345
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.... of goods imported by them, the officers of Customs, Intelligence Unit, Coimbatore visited ICD, Singanallur on 23-11-2000. The consignment covered under Bill of Entry No. 113/18-11-2000 was examined by the officers and it was noticed that the value of goods under import was not reflective of the true transaction value and the importers had also not declared in the import documents all the goods covered under import. On perusal of the Invoice No. P012/2000, dated 21-9-2000 filed along with the B/E No. 113/18-10-2000 it was noticed that the said invoice contained 3 pages for a total value of Singapore $ 12472.07, whereas the total value shown in page 1 of the invoice is Singapore $ 11759.02. It was also noticed that the Bill of Entry showed only Singapore $ 11759.02 Further scrutiny of the prices showed that the unit price of goods packed in 5 litres cans (bulk packing) is slightly more than the unit price of goods packed in 1 litre can which does not appear to be the normal trade practice of any trade either domestic or International. For example the unit price of Sparkling Gold 5 Ltr. tin has been declared as Singapore $ 3.50 per litre, whereas Sparkling Gold 1 litre has been decla....
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....ha Trading Corporation imported the wall putty from M/s. Esper Trading Agencies, Singapore prior to May, 2000. The goods dealt by M/s. Ebeneze Trading House were the goods supplied by M/s. Esper Trading Agency, Singapore and imported by M/s. Prasiddha Trading Corporation. 6. A statement was recorded from Mr. A. Arokiasamy, Managing Partner of M/s. Prasiddha Trading Corporation on 16-11-2000. In his statement, the importer had stated inter alia that Mr. M.R. Singam has got interest indirectly in M/s. Prasiddha Trading Corporation since he is a director in their sister concern M/s. Ebeneze Trading House Pvt. Ltd. The importer admitted in his statement dated 16-11-2000 that profits earned by M/s. Ebeneze Trading House, Coimbatore is to be shared among Mr. M.R. Singam, Proprietor of M/s. Esper Trading Agencies, Singapore and other local directors of M/s. Ebeneze Trading House, Coimbatore, viz Mr. Arokiasamy and Mr. T. Natraj. He also stated that since they are yet to finalise the Balance Sheet, the profit is yet to be shared between them. However, as per the statement of Shri Arokiaswamy, Managing Partner of the importing firm, the profit so gained by M/s. Ebeneze Tarding House....
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....iged to become one of the directors of a promoted private company by name Ebeneze Trading House Pvt. Ltd., w.e.f. 20-4-1999 and that they are also making expenses on behalf of the manufacturers for product promotion by participation in exhibition, making advertisement etc. and also by giving coupon to dealers. This activity shows that the sale effected between M/s. Esper Trading Agencies, Singapore, and M/s. Prasiddha Trading Corporation, Coimbatore are not at arms length, but an influenced price wherein the buyers and sellers are mutually interested in each others and hence the transaction value mentioned in the invoice cannot be accepted. The manufacturers invoices produced by the importer relating to 25 kg pail Wall Putty manufactured by R.J. London Singapore also does not appear to be actual transaction price between the manufacturers and traders in Singapore, since as per the version of the importer himself, the price is much below the local sale price prevailing in Singapore market which is devoid of freight, insurance, profit, loading and unloading charges, etc., when shipped to India. In this connection, it is pertinent to note that the price reduction in respect of the imp....
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....834/- should not be recovered. 4. It was further alleged that on examination of the goods that they were sending undeclared goods viz. 3,179.4 Kg of Lacquer Thinner and 48 Kg of Roof Sealer without any manufacturer's invoice and hence the value of the goods were fixed as per Rule 8 of the CVR 1988. 5. The appellants filed their detailed reply to the show cause notice issued with regard to undervaluation, revision of valuation, invocation of larger period and recovery of amounts of undeclared items. The appellants filed their reply and contended, inter alia, that M/s. Prasiddha Trading Corporation are the importers of wall putty and M/s. Ebeneze Trading Agencies, Singapore are their marketing agents. They contended that M/s. Esper Trading Agencies, Singapore are the company incorporated in Singapore who were appointed as sole distributors for South East Asia of the products manufactured by R.J. London Chemicals Pvt. Ltd., Singapore. They stated that Mr. Singam of Esper Trading Agencies, Singapore is one of the Directors in their marketing Co., viz. M/s. Ebeneze Trading House Pvt. Ltd., Coimbatore and on that ground Revenue was attempting to establish the relationship....
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....y of their pleas neither he has considered the case law relied upon by them. He has proceeded to hold that as the Director was common in supplier's company and the trading of the appellants, and that profit earned by this company has been shared along with foreign partner as they were related persons. The valuation has been held to be revised from US $ 8.00 CIF to US $ 11.50 CIF. He has confirmed the demands raised. On this very sole plea, the order is passed. The Commissioner has also confirmed the demands raised on the undeclared goods and has imposed penalty of Rs. 5 lakhs for the alleged contravention besides penalty of Rs. 50,000/- on the Custom House Agent under Section 112 of Customs Act, 1962. The appeal of the Custom House Agent is not linked and heard today. 7. Appellant's Counsel Shri A.K. Jayaraj and Shri M.S. Kumaraswamy, Consultant, submitted that mere fact of common director in supplier's company and the fact of appellant's marketing agent cannot be a sole ground to revise valuation of the imported items. In this regard, they relied on the judgment rendered in CC, Bombay v. M/s. Maruti Udyog Ltd., 1987 (28) ECR 390 which has been confirmed by the Apex Court a....
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.... is very high and penalty has to be restricted only to the value of the seized goods which was to the extent of only Rs. 2,15,567/- and the duty demanded is Rs. 1,44,615/-. He submits that in the normal course, it would be only about 10% and the penalty can be restricted only to Rs. 25,000/-. 8. Ld. SDR referred to the findings recorded in relevant paras of the order impugned and the written submissions. 9. On a careful consideration of the submissions, it is seen that the Revenue has proceeded solely on the basis that Director of the supplier's firm and the Director in the appellant's marketing agency is common. There is no evidence of contemporaneous import for the purpose of revision of value. There is no evidence to show that appellants had any interest in the foreign supplier's firm. They are two independent units and the fact that there are large number of judgments on this point has not been taken notice of by the Commissioner itself shows his non-application of mind. Revenue has not discharged its burden, which is clear on record. Appellants also produced manufacturer's invoice to show that their price and the price declared in the invoice is same and not in....