TaxTMI 
TaxTMI 
2005 (12) TMI 185
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....bbur - - Rs. 1,00,000/- The appeals against the Order-in-Original No. 2724/2004, dated 30-9-2004 passed by the Commissioner of Customs, Chennai are as follows : Appeal No. Appellant Differential Duty Redemption fine Penalty C/436/04 M/s. Carpenter Classic Exim (P) Ltd. Rs. 36,96,201/- - Rs. 9,61,506/- C/437/04 Ravi Karumbaiah, MD, CCEPL - - Rs. 9,00,000/- C/13/05 Thomas Mathew - - Rs. 5,00,000/- C/06/05 Sanjeev Kabbur - - Rs. 7,00,000/- 2. The DRI Officers received intelligence regarding the undervaluation of imported goods by the appellants. The business premises and the residential premises of the concerned persons were searched and incriminating documents were seized. Statements of S/Shri Ravi Karumbaiah, Managing Director of M/s. Carpenter Classic Exim Pvt. Ltd., V. S. Chandan, CADD Operator were recorded under Section 108 of the Customs Act, 1962. The residential premises of Shri Sanjeev Kabbur, Ex-Marketing Manager of the company were searched and some documents were seized. Statement of Sanjeev Kabbur was also taken. Ms. Jagruthy Sevak was the Executive of the appellant-company, her sta....
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....been cut out in almost all such documents ostensibly to hide the actual price from the customers. Thus, CCEPL substantially undervalued their import consignments in order to evade payment of customs duty. Similar modus operandi were adopted to import goods through Chennai Port also. On the basis of investigation, show cause notices were issued to the noticees. After observing the principles of natural justice, the adjudicating authorities at Bangalore and Chennai passed the impugned orders. 3.Shri B.V. Kumar appeared for the appellants-CCEPL and Shri Lakshminarayan appeared on behalf of Mr. Sanjeev Kabbur. Mr. K. S. Bhatt, SDR and Mr. K. S. Reddy, JDR appeared on behalf of the Revenue. 4.The learned Counsel urged the following points : (a) The impugned orders reveal non-application of mind by the adjudicating authorities. (b) The Orders have been passed merely on assumptions and presumptions without any evidence on record except for one consignment. This is an admitted fact by the Department in their own affidavit filed before the Hon'ble Settlement Commission, Chennai during the course of proceedings held in respect of the application filed by the appel....
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....iven by Shri V. S. Chandan, as he has only stated the normal business activities that are undertaken by the appellant-company on behalf of the customers. (j) As regards the statement of Jagruthy Sevak regarding payment by cash and cheque, it was submitted that such payments do not represent the cost of the goods imported as they are meant for civil work for availing the services of mansons, carpenters, plumbers and electricians who carry out the installation of equipments. (k) Reliance has been placed on a fax dated 21-4-1997 said to have been sent by Thomas Mathew. The Commissioner has observed that the fax reveals that for the imports made during the period from November, 1995 to December, 1996, the value paid to M/s. Veneta Cucine was Rs. 82.82 lakhs, whereas the CIF value of imports as per Bills of Entry filed with the Department during the same period comes to only Rs. 33.22 lakhs, which indicates that the declared value was lowered to the extent of 60% from the actual value. It was submitted that during the financial year 1995-96, only one import took place through ICD, Bangalore vide Bill of Entry dated 18-4-1995. The said import does not fall within the pe....
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....e representatives of the Italian Company's concerned. (q) No reliance can be placed on the fax messaged dated 21-4-97, which is an unauthenticated document. The learned advocate relied on a large number of decisions. (r) As regards the fax message dated 5-4-97, it was submitted that there is nothing contained therein to prove the case of the Department that the appellants under-valued the goods. A perusal of the facts shows that these are instructions given to Thomas Mathew of Proma SRL as to the procedures to be followed to ensure proper packing of the goods. Since these goods are imported against specific order, which are customs made and are also fragile. (s) The fax dated 5-4-1997 is a photocopy and an unsigned document and hence no reliance can be placed on this document. (t) As regards the fax message 8-10-98 alleged to have been signed by Ravi Karumbaiah and addressed to Thomas Mathew, the Commissioner has observed that this fax message confirms the fact that he had arranged for payment of US $ 60,000 and will organize more funds as and when needed. It was submitted that in the reply filed by Thomas Mathew to the impugned show cause no....
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....ment with the help of the Italian Customs to verify the Books of Account of the overseas supplier to ascertain the correctness or otherwise of the photocopies of certain documents purported to have originated from the said overseas suppliers. (z) No evidence has been placed on records to show that to support the allegation in the show cause notice or the findings in the impugned order that the invoice of the foreign supplier were either manipulated or prepared at Bangalore by the appellant-company and were sent by them to Italy. In the absence of such evidence to support such an allegation is not correct. (aa) The Commissioner has observed that Ravi Karumbaiah has admitted that Proma SRL was a front company set up in order to get the documents in the name of the said company and to evade payment of Customs duties. The appellants submit that from the extract from the Company's house record, it is clear that the Proma SRL is a genuine company, which is in existence. Hence, it is clear that there are discrepancies in the statement recorded from Ravi Karumbaiah and as such it is clear that the statement was obtained under duress and coercion. (bb) It was ....
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....otice was not served in accordance with the provisions of Section 153 of the Customs Act. The notice appears to have been sent to Bangalore were the noticee does not reside. In these circumstances, the notice was barred by limitations and not sustainable in law. In the proceedings before the Settlement Commission the appellant was not a party. None of the relied on documents has established the case against the appellants. The adjudication order copy meant for the appellant has been addressed to the advocate, as if the advocate is an agent for this purpose. The adjudicating authority failed to appreciate the contention of the appellant throughout the proceedings that the show cause notice has not been served in accordance with the provisions of the act and therefore, the said proceedings are rendered ab initio void. The Commissioner failed to appreciate and consider this specific judgment of the Hon'ble Tribunal in the matter of M/s. Jaishree Textiles wherein it has been held that what is required to be accomplished within six months is not the issue of the notice but service of the notice to the person concerned. 5.Shri Lakshminarayan, Advocate appeared on behalf of Mr. San....
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....perandi. There is also evidence to show that in India when the goods were supplied to the customers, part of the payment was made by cheque and the rest by cash. In establishing this case, Revenue has relied on the following documents. • Photocopy of a Fax dated 21-4-1997, said to have been sent by Thomas Mathew bearing No. VC/CC/9708, dated 21-4-97 addressed to Anchise Ballestrieri and Vittorio Tollardo of Veneta Cucine S.P.A., Treviso, Italy. • Photocopy of a fax message No. CCEPL/TM/089/97, dated 5-4-97, said to have been sent by Carpenter Classics to Thomas Mathew. • Photocopy of a fax message dated 8-10-98, said to have been sent to Thomas Mathew by Ravi Karumbaiah. • Photocopy of a letter No. CCEL/Proma/1362/97-98, dated 10-1-98 to have been sent by Carpenter Classics to Proma SRL. • Photocopy of Bill of quantity and Order confirmations of M/s. Veneta Cucine pertaining to shipment called lndia-13 and lndia-14. • Photocopy of packing list of M/s. Veneta Cucine pertaining to shipment called lndia-13 and lndia-14. 7. Several objections have been made by the learned advocate Shri B.V. Kumar with rega....
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....ou have shown me correspondence dated 9-10-98 signed by me addressed to Mr. Thomas Mathew contained in File No. 15 seized from our premises and requested me to explain the same for which I state that I have informed Mr. Thomas Mathew that I have kept ready Indian rupees worth US $ 60,000 to be given to him. On your specific enquiry I state that this money was to be handed over to him as per the understanding between us. To your request I state that I and Mr. Thomas had reached an understanding that a part of the proceeds collected by me in cash over and above the bills raised on our customers would be accumulated and the same would be handed over in cash to Mr. Thomas Mathew." 9. Further in his statement dated 19-12-1998 Shri Ravi Karumbaiah has stated the following : "As the market for such western kitchen is quite competitive in India, particularly in Bangalore, our company being new in the field had to sustain. The limited margin of profit was estimated to be very low in such a severe competition. Therefore, Shri Thomas Mathew who is one of the Director of the Company and also our source of strength located at Kuwait suggested that the amount of Customs Duty payable ....