TaxTMI 
TaxTMI 
2005 (7) TMI 262
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.... and found certain irregularities. It appeared that the appellants were over invoicing exports, under invoicing imports diverting imported spares and components in the domestic market illegally and selling assembled computers in the home market and failing to repatriate foreign exchange. During the searches, certain goods and documents were seized. Under Mahazar, follow up action was taken in the premises of the dealers of computers in Visak. On the basis of the investigations, show cause notice dated 13-5-97 was issued to M/s. HCEPL on the following persons. (1) Shri Anil Narra Managing Director of M/s. HCEPL (2) Shri M. Sreekiran, Director of M/s. HCEPL (3) Shri A. Srinivas Director of M/s. HCEPL (4) Shri R. Phanindra, Director of M/s. HCEPL (5) M/s Shashi Bhushan & Co No. 10. Tyagaraja Street, North Usman Road, T Nagar, Chennai The adjudicating authority held that the charges against the appellant except Shri R. Phanindra have been established. Therefore, the adjudicating authori....
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....upees fifteen lakhs) under Section 112(a) of the Customs Act, 1962 and Rs. 6 lakhs under Section 114(i) of the Customs Act, 1962. I impose on Shri M. Sreekiran, Director of M/s. HCEPL, a penalty of Rs. 10 lakhs (Rupees ten lakhs) under Section 112(a) of the Customs Act, 1962 and Rs. 4 lakhs (Rupees four lakhs) under Section 114(i) of the Customs Act, 1962. I impose on Shri A. Srinivas, Director of M/s. HCEPL, a penalty of Rs. 10 lakhs (Rupees ten lakhs) under Section 112(a) of the Customs Act, 1962 and Rs. 4 lakhs (Rupees four lakhs) under Section 114(i) of the Customs Act, 1962. Penal proceedings against Shri R. Phanindra, Director of M/s. HCEPL are dropped. (h) The proceedings to demand interest under Section 28AB are dropped. 3.Shri Sashidharan Senior Advocate and Shri M.S. Rajappa learned Consultant appeared for the appellants. Shri R.N. Viswanath learned SDR appeared for the Revenue. The learned Advocate advanced the following arguments : (1) The appell....
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....value is not correct. (6) The buyer and the seller are not related and no evidence has been brought forth by the Department even after scrutiny of buy back agreement. The department has also not produced any incriminating evidence to indicate any flow back of finance. (7) Relying on Shri Anil Narrah's statement, the imported values have been enhanced at a valuation rate of 25% across the board without going into the reasons as to how such value enhancement could be applicable to so many different items, as contained in table II of OIO. The statement cannot form the basis for rejecting transaction value. The department has not furnished any cogent reasons for discarding the transaction value. (8) The Commissioner never discussed the various judicial pronouncements cited in defence by the appellants. (9) Out of the 29 consignments imported, 24 consignments were imported by sea and the comparison of values is made with goods imported by air. It is incorrect on the part of the Commissioner to adopt Rule 6 of ....
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....ue addition option is monitored by the Development Commissioner. If the Development Commissioner is not satisfied with the export performance of the appellants, there are provisions under which he can take action against the appellants. (14) There is no question of demand of duty on goods where sale proceeds have not been repatriated because it is outside the purview of Customs Act, 1962 and only the Director of enforcement can adjudicate this issue. In Chinku Exports v. CC, Calcutta - 1999 (112) E.L.T. 400 = 1999 (33) RLT 395), it has been held that Customs Officer is not competent to adjudicate the case of non-realization of export proceeds as it is governed by Section 18(2) and not Section 18(1) of FERA. (15) It is incorrect to demand any duty on imported components in ineligible DTA sales. The question of under-valuation of imported components has already been pointed out. The appellant has explained that they have complied with the Development Commissioner's DTA approval letters. (16) The duty on computer components diverted/substituted from VEPZ is Rs. 58,167/-. No material was ....
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....; Diversion of imported components and substitution of the same by old and used ones. (2) Under-valuation of the goods at the time of import. (3) Smuggling of computer components into India by concealing the same inside the cabinets and suppressing these facts from the customs. (4) Exporting incomplete systems and clearing them as complete systems and therefore over-invoicing the exports. (5) They had under-valued imported consignments and over valued exports resulting in inflated and false value addition under the Exim Policy which had resulted in permission being granted for excess DTA sales over and above their actual entitlement. (6) In respect of 4 export consignments, wherein incomplete systems had been sent, foreign exchange had not been repatriated and consequently the process of export was not complete and the conditions of Notification 133/94, dated 22-6-94 are not satisfied. 6.As regards the first allegation of divers....
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....mself and Mr. Sukhdev Singh on 50:50 basis. The adjudicating authority relied on the decision of CEGAT Special Bench in the case of CCE v. SKEFCO India Bearing Co. Ltd. [1990 (49) E.L.T. 94 (Tri.)] wherein it was held that the lower price charged by foreign supplier to sole indenter is not the assessable value and that the assessable value is the price at which such or like goods are ordinarily sold or offered for sale. The CEGAT in the case of MD International v. Collector of Customs [1996 (86) E.L.T. 293 (T)] has held that after taking overall evidence and the facts and circumstances of the case, the Collector is right in determining the value of US $ 5 per piece based upon the voluntary statement of the party that it was a negotiated price against the quotation price at US $ 5.75 per piece. US $ 5 per piece is not the declared price, but admitted by the party and the difference in value was substantiated by way of compensatory payments and in the circumstances, the burden shifted to the party to adduce evidence that US $ 5 was not the normal price and the statement given by him with reference to the value was not voluntary. The adjudicating authority has observed that in the pre....
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....y the unit and during April, 95 to February, 96 they have exported 1056 computers systems with these casings, 71 casings were cleared on DTA sales. From the above it would be seen that there was an excess of 973 numbers. The adjudicating authority has also stated that there is further evidence regarding the selling of imported components. In view of the difference in weight shown in two different bills of lading for similar quantities of similar goods, the difference in weight according to the revenue is attributable to the additional materials in the consignments due to concealed components. The adjudicating authority has elaborately discussed this point with lot of details. When importers adopt ingenious methods of smuggling, direct evidence would not be forthcoming. In view of this, the charge of smuggling computer components is proved. 11.As regards the allegation of export of incomplete systems, in our view, the export has already been completed, the goods are not available. Only there are certain documents. Revenue is trying to show that incomplete systems have been exported. In the absence of proper evidence, we hold that this charge cannot be sustained. In view of our fi....