TaxTMI 
TaxTMI 
2006 (3) TMI 786
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....of ₹ 88,95,393/-(Rupees Eighty Eight Lakhs Ninety Five Thousand Three Hundred and Ninety Three only) paid by the appellant M/s. Radhey Shyam Ratanlal to be adjusted against their customs duty liabilities, and further holding that the goods imported vide bills of entry Nos. 171956 dated 24.2.2001, 17184 dated 23.2.2001, 171954 dated 24.2.2001, 171092 dated 19.2.2001, 171815 dated 23.2.2001, 171957 dated 24.2.2001, 171955 dated 24.2.2001, 165289 dated 9.1.2001, 169069 dated 5.2.2001 and 165287 dated 9.1.2001 were liable for confiscation under Section 111(m) of the Customs Act, 1962 as these goods were mis-declared with reference to their value and also holding that the goods imported vide bills of entry Nos. 171954 dated 24.2.2001 and 171814 dated 23.2.1001, were also liable to confiscation under Section 111(m) of the said Act as these were mis-declared with respect to their quantity. Since the goods were not available for confiscation, as they were provisionally released to the importer, the Commissioner imposed a fine of ₹ 2 lacs (Rupees Two Lakhs only) in lieu of confiscation. Penalty of ₹ 10 lacs (Rupees Ten Lakhs only) was also imposed on the appellant firm of ....
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....em in March 2001 were at the re-negotiated price of US$ 5500 PMT, and they paid the differential amount of customs duty for clearing the two consignments provisionally. In the statement of Mr. Sanjeev Kumar Sharma, partner of M/s. R.S.K. Enterprises, it was admitted that they had imported consignment of cloves under bill of entry dated 7.3.2001 at the declared price of US$ 2900 PMT, though the actual price was US$ 5500 PMT. This firm also paid the differential duty in respect of these consignments. Mr. Balrajkumar Vinodkumar, proprietor of a concern, also admitted that the price declared by him in respect of the consignment of cloves imported under bill of entry dated 26.2.2001 was US$ 2900 PMT which was less than the actual price of US$ 5400 PMT. He also paid the differential duty and took provisional release of the goods. In the statement of Shri Mahendrakumar P. Parmar, Managing Director of M/s. Esjaypee Impex (P) Ltd., it was admitted that while submitting the documents for clearance of cloves under bill of entry dated 22.2.2001, he had declared the price of US$ 2900 PMT, but the actual price was US$ 5400. He admitted his mistake and agreed to pay the differential duty and got ....
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..../s. IJIMASIA for cloves, but a person of that concern had once contacted him requesting for business. According to him, the appellant had contracted with M/s. Ketan Trading Co. of Singapore for supply of cloves. Under that contract M/s. Ketan Trading Co. was to supply cloves at a unit price of US$ 2600 PMT. According to him, the original contract was with M/s. Ketan Trading Co. for supply of 300 MTs and it was signed in November 2000. He was having only a photocopy of the said contract. He stated that the international market price of cloves in the beginning of 2001 was only US$ 2900 to US$ 3000 and that in February, March-April the price went up to US$ 5000 depending upon the quality. As regards the invoice bearing No. 624/2K-01 dated 7.2.2001 issued M/s. IJIM ASIA in the name of M/s. Ketan Trading Co., Singapore, showing consignment of 24.538 MTs of cloves at the rate of US$ 5600, he stated that one consignment was imported by him under bill of entry No. 171954 dated 24.2.2001, which was the same consignment mentioned and shown against invoice No. 624/2K-01 dated 7.2.2001. While seeking clearance the quantity was declared as 23.488 MTs. However, on actual examination the consignm....
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....r Rule 5 of the Valuation Rules. It was further held that though initially the appellant had requested for cross-examination of all the importers referred in the show cause notice subsequently, by letter dated 13.8.2003, the advocates for the appellant had asked for cross-examination of five persons, namely, Mr. Bhumish Shah, Mr. Biharilal Ghura, Mr. Deepak C. Sheth, Mr. Balraj Kumar and Mr. Ashok Goyal. Notices were issued to all these for cross-examination. During the course of personal hearing Mr. Deepak C. Sheth and Mr. Ashok Goyal were cross-examined. Shri Bhumish Shah and Mr. Biharilal Ghura had sought some more time. However, on 12.11.2003, the advocate for the appellant pleaded that any further adjournment for personal hearing would amount to harassment and unnecessary delay in finalizing the case and requested that the case may be taken up for decision based on arguments and case law filed and excluding the statements of persons who had not appeared for cross-examination. In view of this stand taken up by the learned advocate for the appellant, personal hearing got curtailed. The learned Commissioner rejected the contention raised on behalf of the appellant that the statem....
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....reliction of duty. It was stated in this communication, that the hearing was closed on 14.10.2003 as the department could not produce any witness. The learned senior advocate, therefore, argued that no reliance could have been placed on the statements of any of the three witnesses including Mr. Bhumish Shah out of five witnesses for whom request was made for cross-examination on behalf of the appellant. 4.1. In support of his contentions, the learned Counsel for the appellant placed reliance on the following decisions: (a) The decision of the Supreme Court in Commissioner of Customs, Mumbai v. Bureau Veritas reported in was cited for the proposition that both Section 14(1) and Rule 4 provided that the price paid by an importer to the vendor in the ordinary course of commerce shall be taken to be the value in the absence of any of the special circumstances indicated in Section 14(1) and particularized in Rule 4(2). (b) The decision of the Supreme Court in Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai reported in was cited for the proposition that if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), t....
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....High Court in Nagraj Walchand Jain v. G. Koruthu, Collector of Central Excise reported in 2000 (123) ELT 50(Bom.), was cited for the proposition that refusal to afford opportunity to cross-examine the witnesses relied on by the department violated the principles of natural justice. (g) The decision of the Tribunal in P. Chandra Kumar v. Commissioner of Customs (P), Calcutta reported in 2000 (116) 101 (Tri.), was cited to point out that where cross-examination was denied without recording any reason, the Tribunal held that the cross-examination of various persons and officers asked for by the appellant ought to have been allowed In the facts and circumstances of the case, the Tribunal set aside the order and remanded the case. It was observed in paragraph 2 of the order that, "no doubt disallowing the cross-examination of witnesses or persons involved in seizure may not always be against the requirement of principles of natural justice, but it has to be considered by the adjudicating authority whether it is necessary to do so or not". (h) The decision of the Tribunal in Ramana International v. Commissioner of Customs, Nhava Sheva reported in was cited to point out that, it was....
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....were all cumulatively considered and the Commissioner had rightly rejected the contract on the ground that it was unreliable and adopted the value as reflected from the other transactions by following the provisions of Rule 5. It was submitted that there was clear reference to Rule 5 even in the show cause notice and it is not as if the Commissioner treated Rule 10A as a substantive provision for rejecting the transaction value put forth by the appellant. It was also argued that Mr. Bhumish Shah was only one of the various witnesses whose statements were recorded. Mr. Bhumish Shah was summoned by the Commissioner at the instance of the appellant. It was pointed out from the record of personal hearing at "Exhibit 10" to the memo of appeal that on 14.10.2003 when the learned advocate for the appellant had cross-examined Mr. Deepak Sheth, it was recorded that Mr. Ashok Goyal had asked for adjournment and that, "it is learned that Bhumish Shah had come to the Custom House at 3 P.M., but was not available when he was called for cross-examination." Thereafter, fresh notices were issued to the remaining witnesses. Mr. Bhumish Shah and Mr. Biharilal Ghura sought more time. However, in the ....
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....ight to cross-examine witnesses. The High Court relied upon the decision of the Supreme court in Kanungo & Co. v. Commissioner of Customs and Ors. (supra) and the earlier decision of the Calcutta High Court in Kishanlal Agarwalla (supra), for this proposition. (d) The decision of the Supreme Court in Surjeet Singh Chhabra v. Union of India reported in was cited for the proposition that the Customs officers are not police officers and the confession though retracted is admissible and binds the petitioner who had confessed and therefore, there was no need to call punch witnesses for examination and cross-examination by the petitioner. (e) The decision of this Tribunal in Jagdish Shanker Trivedi, and Ors. v. Commissioner of Customs, Kanpur (Final Order Nos. 763-767/05-CUS dated 27.7.2005) reported in 2005-TIOL-851-CESTAT-DEL, was cited to point out that following the decision of the Supreme Court in Kanungo's case (supra) and the two decisions of the Calcutta High Court and the decision in Ashutosh Ghosh and Anr. v. Union of India and Ors. (1977 Criminal Law Journal N.O.C. 67), it was held that a noticee cannot claim a right to cross-examine under Section 124 of the said Act....
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....Rule 10A of the Valuation Rules, 1988. The Commissioner held that the value of US$ 2600 PMT declared by the party could not be accepted as the value for the purpose of assessment in terms of the provisions of Section 14(1) of the said Act read with Rules 4 and 10A of the Valuation Rules. 7. Section 14 of the said Act relates to valuation of goods for the purposes of assessment and, inter alia, provides that the value of any goods chargeable to duty of customs shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation in the course of international trade, where the seller and buyer have no interest in the business of each other, or one of them has no interest in the business of the other, and the price is the sole consideration for the sale or offer for sale. By Sub-section (1A) of Section 14, which was inserted w.e.f. 16.8.1998, it is provided that subject to the provisions of Sub-section (1), the price referred to in that sub-section in respect of imported goods, shall be determined in accordance with the rules made in this behalf. The opening words "Subject to the provisions of Sub-sect....
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....are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade and the price quoted in the contract will not be conclusive and the value of such goods which shall be deemed to be the price at which they are ordinarily sold at the time and place of importation, will govern the field for the purpose of imposition of Customs duty chargeable on such goods. As noted above, the price in respect of the imported goods shall be determined in accordance with the rules, subject to the provisions of Sub-section (1) of Section 14. This is why it has been provided under Rule 3(ii) that if the value cannot be determined under Clause (i) to be the transaction value, it shall be determined by proceeding sequentially under Rules 5 to 8. Thus, when the transaction value sought to be relied upon by the appellant on the basis of the order dated 23.11.2000, was not found to be acceptable, it was open for the learned Commissioner to resort to Rule 5, of the said rules, as rightly done by him. Under Rule 5, it is inter alia, provided that the value of imported goods shall be the transaction value of identical goods sold for export to India an....
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....te of US$ 2600 PMT for two years from November 2000. Therefore, the Commissioner was justified in not relying upon such a copy of the contract which did not inspire confidence. 9.2 It is also evident that the Commissioner had not simply relied upon the figures in the Public Ledger or in the Weekly Bulletin of the Spice Market published by the Ministry of Commerce and Industry. There was plethora of other evidence on record which indicated that the prices of cloves of Indonesian and Zanzibar origin were much higher and as per the figures which reflected in the aforesaid international publication, Public Ledger as well as the Weekly Bulletin of Spices Market. 10. It was contended that the quantity imported by the appellant was large and therefore, the prices at which cloves were imported by other parties should not be compared with the imports made by the appellant under the said ten bills of entry. This contention is misconceived because it will be noticed from the imports done under the ten bills of entry by the appellant were of lower and comparable quantity. This is evident from the following table of the imports made by the appellant under the bills of entry in question: _....
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....hom the focus was placed all throughout for arguing that he was not allowed to be cross-examined, there is other plethora of evidence to indicate that the real price at which the cloves were imported under the contemporaneous transactions, was around more than double the price US$ 2600 shown by the appellant on the strength of the purported contract dated 23.11.2000, said to have been entered into between the appellant and M/s Ketan Trading Co. 11. It is evident from the material on record that the adjudicating authority had given full opportunity of being heard to the appellant during the proceedings. The five persons who were required to be cross-examined were duly summoned by the adjudicating authority and two of them were cross-examined. Mr. Bhumish Shah and Biharilal Ghura had sought some more time and further personal hearing was to be done for the purpose. However, the advocate for the appellant on 12.11.2003 pleaded that further adjournment for personal hearing would amount to harassment and unnecessary delay in finalizing the case and requested the case for being taken up for decision as on evidence, arguments and the cases cited and excluding the statements of persons w....
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....Shah had responded to the show cause notice issued for his cross-examination and had sought some more time, as noted above. He could not be cross-examined because the advocate for the appellant himself pleaded that any further personal hearing would amount to harassment and unnecessary delay and that the matter should be taken up for decision. All the particulars that Bhumish Shah had given in his statements were made known to the appellant in the show cause notice and the documents which were served. The appellants had failed to counter the documents submitted by Mr. Bhumish Shah which were brought to their notice. When the appellants were clearly informed about the allegations made by Bhumish Shah and had full opportunity to deal with them, including by cross-examining Bhumish Shah which they did not avail, there was no prejudice caused to the appellants when due to their own conduct no further personal hearing was held upon the move of the learned advocate for the appellant opposing adjournment for personal hearing, on the ground of harassment to the appellant and unnecessary delay. It is, however, quite clear from the record that, even apart from the statement of Bhumish Shah, ....
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....quantity as 24.538 MTs and not the gross weight of 25.790 MTs. The price of these goods was admittedly shown as US$ 2600 PMT by the appellant on the basis of the order dated 23.11.2000. The contention that the invoice of IJIMASIA Pvt. Ltd. showing procurement of the same goods by M/s Ketan Trading Co. at the price of US$ 5600 was a concoction made by Bhumish Shah, can hardly be accepted in view of the intrinsic evidence showing that the goods were sent in the same container, the number of which is appearing in both the documents, namely, the invoice prepared by IJIMASIA Pvt. Ltd. as well as the bill of entry produced by the appellant. It can hardly be disputed that the appellant had purchased Zanzibar cloves from IJIMASIA through M/s Ketan Trading Co. The copy of bill of lading produced by the appellant along with the bill of entry No. 171954 dated 24.2.2001 indicated that the goods were actually shipped by M/s. IJIMASIA Pvt. Ltd., Singapore in the said container to the appellant. There is, therefore, no scope that the invoice No. 624/2K/01 dated 7.2.2001 issued by IJIMASIA to M/s. Ketan Trading Co. for the cloves shipped to the appellants in the said container number, was concocte....
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....IA directly to the appellant at the instance of Ketan Trading Co. through whom the appellant admittedly purchased the cloves. Despite being asked, the appellant never produced the procurement invoices to show the real price at the time of importation. Even in respect of the said transaction reflected in the invoice of IJIMASIA showing shipment of goods under the said container in which the appellant had received them, the appellant has never produced any contrary evidence to show that these were not the goods procured through Ketan Trading Co. from IJIMASIA. 13. We, therefore, agree with the finding of the Commissioner that the correct transaction value for the purpose of assessment of the goods imported by the appellant under bill of entry No. 171954 dated 24.2.2001 was US$ 5600 PMT, and that the correct value for the purpose of assessment of the goods which were also cloves of Zanzibar origin imported by the appellant in and around the same period under the bill of entry Nos. 171955, 17956 and 171957 all dated 24.2.2001, the bill of entry No. 171092 dated 19.2.2001 and bill of entry No. 169069 dated 5.2.2001 was also US$ 5600 PMT in terms of Rule 5 of the said rules. 14. From....