TaxTMI 
TaxTMI 
2015 (2) TMI 1138
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....) of the Customs Act? (2) Whether the CESTAT erred in disregarding the contraventions of relevant statutory provisions of the Customs Act, namely, sections 2(33), 11, 50(2) as also section 18(1)(a) and section 67 of the FERA read with the relevant notifications thereunder, all of which justify the confiscation of the said cassettes under section 113(d) and (i) as held in the order in Original? (3) Whether the CESTAT erred in disregarding the contraventions of the Income Tax Act, i.e. sections 80HHC inter alia, duly considered in the order in Original leading to the confiscation of the said video cassettes for violation of the Customs Act provisions as well as other applicable statutes collateral to Customs Act? (4) Whether the CESTAT was justified in allowing the consequential relief to the respondents herein, in terms of setting aside the penalty imposed under section 114 despite illegal exportation of goods, which were held liable to absolute confiscation under section 113(d)and (i) vide Order in Original dated 9.7.2003?" 3] The few facts regarding the contentions raised before this Court can be summarized as under: The present Respondent No.1 claime....
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....orded under section 108 of the Customs Act, 1962, it is claimed by the Revenue that the Director of the Respondent No.1 company has admitted that the transfer was over valued and same was done with an intention to derive the benefit under section 80 HHC of the Income Tax Act. 10] Based on the above referred factual matrix, the Revenue has issued a show cause notice to the Respondent herein under section 124 of the Customs Act calling upon the Respondent No.1 as to why the 8 VHS prerecorded video cassettes under the seizure having been declared value of Rs. 1,10,71,850/shall not be confiscated under section 113 (d) and (i) of the said Act. The Respondent No.1 was also called upon as to why 6 VHS prerecorded video cassettes exported under the Shipping Bill dated 27th January, 1999 and 12 video cassettes exported under Shipping Bill dated 16th February, 1999 total valued at Rs. 74,30,625/shall not be held liable for confiscation under section 113 (d) and (i) of the Customs Act, 1962. It was also informed to the Respondent No.1 as to why penalty be not imposed under section 114(i) of the Customs Act. 11] The Commissioner of Customs while passing the Order in Original on 14th July....
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....ms Act. He submits that the very parameters which are required to be considered in the light of the scheme of section 14 were adhered to by the Revenue while determining the value of the goods in the light of statement and conduct of the parties, so as to reach to a conclusion for determining the true value. Said aspect according to him was duly appreciated and gone into by the Commissioner of Customs. According to him, due weightage was given to the statement given by Mr. Dand, representative of the Respondent No.1 which was recorded in exercise of power under Section 108 of the Act which according to him in view of Section 108, same has strong evidentiary value. Based on the same, Mr. Sethna submits that the Tribunal overlooking the said factual matrix and the evidence thereof, has drawn conclusion to the detriment of the interest of the Revenue and has allowed the Appeal. According to him, Mr. Hirachand Dand in his statement recorded on 8th March, 1999 in clear terms admitted that the goods in question that is the video cassettes are over valued and the same according to him is done with an intention to claim benefit under section 80HHC of the Income Tax Act. He further submits ....
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....he scheme thereof. He submits that there was enough material before the Revenue to form an opinion that the goods are over valued and proper value of the goods under export is Rs. 21,000/. So as to support the said contentions, he has taken us through the contents of the show cause notice, the Order in Original passed by the Commissioner of Customs and the considerations thereof by the learned Tribunal. 18] While resisting the above referred submissions, Mr. Jain, learned Counsel, appearing for the Respondent No.1 has urged that the very approach of the Tribunal is just and proper. According to him, every event of export of the goods, duty cannot be leviable by Revenue unless provided so expressly. He has urged that valuation of the goods was very much established before the Revenue, while responding to the show cause notice. He submits that what is required to be taken into account is not the value of the video cassettes as is available in the shop but also with intellectual rights with which the said goods were purchased by the Respondent No.1. He further submits that the Revenue is not able to establish the over valuation of the goods particularly having regard to the content....
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....1. Respondent No.1 against shipping bill No.16379 dated 4th March 1999 for export of 55 episodes of T.V. Serial "Dekh Bhai Dekh", claimed the manufacture of the goods by respondent No.2 in SEEPZ. Respondent No.2 have produced photocopy of agreement between respondent No.1 and SetSatellite, Singapore dated 18th January 1999, which was admitted by the representative of respondent No.2." 21] The Commissioner further noted that the representative of respondent No.1 Mr Hirachand Dand in his statement recorded under Section 108 of the Customs Act, 1962 stated that on 14th May 1998, respondent No.1 has entered into MOU with M/s. ABCL, wherein respondent No.1 acquired sole and exclusive rights of T.V. Serial, which include second telecast for satellite cable and Pay T.V. 22] The first telecast right was with M/s. Madhu Videotec which had sold it to M/s. Sony. 23] Respondent No.1 had purchased the said rights for a sum of Rs. 50 Lacs and has entered into a contract with SetSatellite, Singapore for a consideration of Rs. 1.32 Crores, in support of which he has produced original contract and receipt of Rs. 1.32 Crores from M/s. SetSatellite, Singapore against different foreign inward....
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....en respondent No.1 and SetSatellite as regards receipt of consideration of Rs. 1.32 Crores under foreign remittance. The Tribunal has also taken into account the approach of the Commissioner while passing the order in original in the matter of valuation of the goods. 26] The evaluation of the issue, as regards whether the goods could be termed as prohibited goods, as is declared by the Commissioner and reversed by the Tribunal, if analyzed, it is noted that the forged agreement produced by the representative of respondent No.2, to which respondent No.1 admittedly is not a signatory, cannot be read in isolation to the detriment of respondent No.1. Respondent No.2, for production of such forged agreement will face independent action and as is informed, that is already underway. However, it is required to be noted that the genuineness of the agreement between respondent No.1 and SetSetellite for transfer of viewing rights to be telecasted on Sony T.V. for the second time was very much established pursuant to the agreement in between SetSatellite and respondent No.2 against shipping bill dated 4th March, 1999. The receipt of the foreign remittance and the production of original agre....
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....the judgment of the Apex Court in the matter of Tata Consultancy Services (cited supra) and the relevant observations in paragraph 27 thereof read thus : "In our view, the term "goods" as used in Article 366 (12) of the Constitution of India and as defined under the said Act are very wide and include all types of movable properties, whether those properties be tangible or intangible. We are in complete agreement with the observations made by this Court in Associated Cement Companies Ltd. (supra). A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that programme may remain with the originator of the programme. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put on to a media, whether it be in the form of books or canvas (in case of painting) or computer discs or cassettes, and marketed would become "goods". We see no difference between a sale of a software programme on a CD/floppy disc from a sale of music on a cassette/CD or a sale of a film on a video cassette/CD. In all such cases, the intellectual property h....
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....as to the terms arrived at in the agreement between the Respondent No.1 and the purchaser about transfer of the rights thereof, was not dealt with on record so as to establish that the said was over valued. The Tribunal has also looked into the approach of the learned Commissioner that the export though also admitted to be under an agreement entered into with a foreign buyers and the remittance of Rs. 1.32 crores received by the Respondent No.1 through local banking channel was also not properly appreciated. The Tribunal has also looked into the description and the valuation of the goods as was declared in the shipping bill in terms of the agreement and the physical value of the cassettes and the cost of recording thereof. The Tribunal having regard to the evidence brought before it, in our opinion, has rightly taken into account the transaction value of the goods declared as per the agreement to the extent i.e. Rs. 1.32 crores having regard to the transfer of not only the video cassettes but the contents thereof and right to telecast the same. 30. The reliance placed by the learned counsel for the Appellant in the matter of Om Prakash Bhatia (supra) so as to canvas the overinvo....