AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2000 (12) TMI 204
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....ere in possession of quantity based advance licence for import of parts of footwear. They imported vide two bills of entries, both dated 16-2-1996, 5251 pairs of footwear uppers. At the same time, 5251 pairs of unit soles, insoles and insocks (sock liner) - parts of footwear, were imported in the name of PID. PID was a 100% owned subsidiary of PIL. 3.It was alleged in the show cause notice dated 7-5-1996 that the parts of footwear imported in the name of PIL and PID were nothing but three models of footwear of Reebock brand, in semi-knocked down (SKD) condition. Footwear were considered to be consumer items whose import required a specific import licence. Footwear were liable to a higher rate of customs duty, higher than the parts of footwear. Certain discrepancies were found in the relevant documents filed for customs clearance. It was alleged that the parts of footwear imported by PIL and PID were complete shoes imported in SKD condition, and were classifiable under sub-heading No. 6404.19 of the Customs Tariff, and that the complete footwear had been imported in contravention of the provisions in the relevant Import Policy. It was also mentioned that the unit soles and insoles ....
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....use notice dated 1-7-1996 also. In the show cause notice dated 1-7-1996 demanding duty for the clearances from 21-6-1995 to 4-11-1995, extended period of limitation was invoked. In this show cause notice dated 1-7-1996 the noticees were called upon to show cause as to (i) why the benefit of Notification No. 45/94 Cus. dated 1-3-1994 should not be disallowed in respect of the bills of entry mentioned in Col. 13 of Annexure J of the notice, in connection with the import of outer soles and insoles (ii) why the consignments of PIL and PID should not be clubbed together in respect of the said bills of entries for the purposes of assessment both under the Export Import Policy 1992-97 and the Customs Act, (iii) why the CIF value of Reebock footwear in SKD condition should not be taken as indicated in Col. 8 of the table of para - 31 of the notice, (iv) why the footwear uppers, soles, insoles and insocks imported under the aforesaid bills of entry and having total CIF value of Rs. 919,88,080/- should not be confiscated under Sections 111(d), (l), (m) and (o) of the said Act. Since those goods were no longer available for confiscation having been already sold by the noticees, why fine in li....
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....duty liability to such a huge extent without giving an opportunity to the appellants as to how this liability has been arrived at and further giving an opportunity to them to defend against the said liability." The impugned order was set aside on the ground that the additional duty liability of Rs. 2,16,47,301/- made under the corrigendum could not be sustained, for violation of the principles of natural justice. The appeal of PIL was allowed by way of remand. 6.On re-adjudication, the Commissioner of Customs under the impugned Order-in-Original dated 12-4-1999 with regard to valuation observed that as the Department had not filed any appeal before the Tribunal against the order of the Commissioner on the valuation aspect "the findings of the ld. Commissioner in the order dated 30-9-1997 on the aspect of valuation of the imported components have attained finality and the same cannot be re-adjudicated again in the de novo proceedings". (refer para-20 of the impugned order at page 460 of the paper book). With regard to the relationship between PIL and PID, he came to a conclusion that PID was a dummy unit of PIL. (refer para-50 of the impugned order at page 492 of the paper book).....
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....made by M/s. PIND, the exemption would not be available as no exemption to footwear is available under Notification No. 45/94 Cus. dated 1-3-1994 and all the components imported by M/s. Phoenix Industries would attract duty at the rate applicable to the fully finished footwear." With regard to the show cause notice dated 7-5-1996, however, he held that the exemption of customs duty under advance licences would not be applicable to the footwear uppers imported by PIL in as much as the nexus between imports and exports had not been established. Rejecting the plea of limitation, he confirmed the differential duty of Rs. 45,93,824/-. A penalty of Rs. 10,00,000/- was imposed on PIL. In readjudication order, no penalty was imposed on any other noticees. 7.No appeal had been filed by the Revenue against the first order-in-original dated 30-9-1997 read with corrigendum dated 4-12-1997 passed by the Commissioner of Customs, ICD. Against the re-adjudication order, which had been passed by the Commissioner of Customs after the first order dated 30-9-1997 had been remanded for re-adjudication, the Revenue had filed 10 appeals, the respondents being as PIL, PID and 8 other Directors and Comp....
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....the fax machine in unassembled form. The ld. Advocate submitted that the situation in the present case was similar and that what was imported were the individual parts, and not the footwear in un-assembled form. He also submitted that the first order was not reviewed by the Department and as the noticees filed appeal in the Tribunal and the Tribunal allowed their appeal by way of remand, that order got merged with the Tribunal's remand order. As regards the valuation, the ld. Advocate submitted that the matter is already settled by the Tribunal's decision in the case of Wipro G.E. Medical Systems Ltd. v. Commissioner of Customs, Bangalore - 1999 (106) E.L.T. 169 (Tribunal), wherein the Tribunal had held that when only 5 out of 6 essential components of CAT Scan System were imported in CKD (completely knocked down)/SKD packs, the transaction value as declared was acceptable, in absence of evidence of contemporaneous import of similar goods or of extra remittance. He also submitted that Rule 2(a) of the Interpretative Rules was not applicable to valuation. It was only for classification. The basis adopted for determining the customs prices after taking the prices in the international....
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..... - 1989 (40) E.L.T. 214 (S.C.), where the Hon'ble Supreme Court had held that when there was any fraud, collusion, wilful mis-statement or suppression of facts, then the Deptt. was justified to claim duty beyond a period of six months. The Apex Court had also held that penalty was imposable if there was deliberate suppression or wrong statement. He pleaded that a deterrent penalty was called for in the facts and circumstances of the case and that penalty was also imposable on the Directors/Company's Officials for their acts of commission and omission, leading to evasion of customs duty. 9.We have carefully considered the matter. Issues being common, the appeal filed by M/s. Phoenix International Ltd. and the other appeals filed by the Revenue are taken up together and issues discussed jointly. M/s. Phoenix International Ltd. (PIL) had imported during 21-6-1995 to 4-11-1995, shoe uppers in 20 consignments. For the clearance of these shoe uppers, they produced quantity based advance licence, issued in terms of the Export and Import Policy April, 1992 to March, 1997, under the quantity based Duty Exemption Entitlement Certificate (DEEC). They claimed the benefit of exemption under N....
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....e assembled to make or construct the parent goods could also be called as SKD parts. The expression SKD in ordinary meaning signifies partly assembled parts taken apart from a fully assembled article or the partly assembled parts, which could be readily assembled to form the finished article, (refer para-12 of Union of India v. Tarachand Gupta & Brothers - 1983 (13) E.L.T. 1456 (S.C.). 12.The footwear are not the type of goods that could not be transported without being knocked down or without being taken apart. In the present case, what were imported were the parts of footwear. The importers/manufacturers have submitted that a very elaborate process of assembly, manufacture and finishing is involved in obtaining the fully finished footwear having consumer appeal. Reference has been made to 18 components that were required for manufacturing complete shoe through the help of 37 machines and machinery items. (refer para-53 of the impugned order-in-original dated 12-4-1999). In reply to Question No. 5, Shri Bhupendra Nagpal, General Manager (Tech.) in his statement recorded on 20-3-1996 had replied as under :- "Question 5 : Whether complete shoe uppers, unit sole, insole, insock (s....