A.R. OVERSEAS TRADECOM PVT. LTD. Vs. COMMISSIONER OF CUSTOMS (PORT), KOLKATA
LAWS(CE)-2015-2-23
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on February 13,2015

A.R. Overseas Tradecom Pvt. Ltd. Appellant
VERSUS
Commissioner Of Customs (Port), Kolkata Respondents


Referred Judgements :-

G. H. SHAIKH VS. COMMR. OF CUSTOMS,PUNE [REFERRED TO]
MOTOR INDUSTRIES CO. LTD. VS. COMMR. OF CUSTOMS [REFERRED TO]
UNION OF INDIA VS. GANGADHAR NARSINGDAS AGGARWAL [REFERRED TO]
EICHER TRACTORS LIMITED HARYANA VS. COMMISSIONER OF CUSTOMS MUMBAI [REFERRED TO]
COMMISSIONER OF CUSTOMS MUMBAI VS. J D ORGOCHEM LIMITED [REFERRED TO]
COMMISSIONER OF CUSTOMS, MUMBAI VS. MAHALAXMI GEMS [REFERRED TO]
PUSHPANJALI SILK PVT. LTD. VS. CC [REFERRED TO]


JUDGEMENT

Dr. I.P. Lal, Member (T) - (1.)THIS appeal is filed against the order of the Commissioner of Customs (Port), Kolkata.
(2.)BRIEFLY stated the facts of the case are that the Appellant filed a Bill of Entry No. 2379666 dated 11.06.2013 through their CHA, declaring therein the imported goods as polyester knitted fabric and viscose knitted fabric, imported from China at a declared unit price of US$ 1.90 per kg. On the first check, viscose knitted fabrics were found in excess of the declared quantity. It further appeared from the Alert issued from DRI F. No. 23/13/2011 -DZU dated 09.05.2011 to the effect that certain importers are resorting to mis -declaration of value of import of fabrics from China. Accordingly, a proceeding was initiated against the importer. Issue of show -cause notice was waived by the importer on account of demurrage charges incurred by them, however, they requested for a personal hearing before adjudicating the case. After hearing, the ld. Commissioner - (i) confiscated 700.4 kgs. of viscose knitted fabrics imported in excess of the declared quantity under Section 111(m) of the Customs Act, 1962 with an option to the importing firm to redeem the goods on payment of redemption fine of Rs. 1,50,000/ -; (ii) confiscated 20,212.17 kgs. of knitted fabric (both viscose and polyester) used for concealing excess quantity of viscose knitted fabric under Section 119 of the Customs Act, 1962, with an option to the importing firm to redeem the goods on payment of redemption fine of Rs. 10.00 lakhs; (iii) imposed a penalty of Rs. 5.00 lakhs on the importing firm, under Section 11(a) of the Customs Act, 1962 for the said mis -declaration & also ordered that the importer shall pay the appropriate duty on the entire 20913.1 kgs. of the imported goods on enhanced value. Being aggrieved, the Applicant has filed the present appeal before this Forum. He ld. Advocate appearing for tHe Appellant, has mentioned that tHe Hon'ble High Court of Calcutta vide its Order dated 3rd September, 2014 in tHe Writ Petition No. 165 of 2014 filed by tHe petitioner (i.e. importer) has directed tHe Tribunal to dispose of tHe Appeal within a period of six months from tHe date of order. In tHe mean time, tHe petitioner/importer is allowed to obtain release of tHe goods on payment of duty and upon securing redemption fine of Rs. 16.50 lakhs by furnishing Bank Guarantee of that amount. It is tHe submission that tHe goods are still in tHe custody of tHe Customs Department and no release has been taken by tHe importer. As directed by tHe Court, present appeal is taken up for disposal.
3.1 It is submitted that tHe commodity, namely, viscose knitted fabric is prone to absorb tHe moisture and tHerefore, tHe weight of tHe commodity at tHe time of tHeir shipment and on arrival, is bound to variation. It is submitted that for concealment, it is necessary that tHere should be two types of goods, namely, (i) tHe one, concealed and tHe otHer (ii) concealing tHe goods. In tHe present case, tHe variation is on account of moisture content and difference in weighing tHe scale and tHerefore, tHe act of concealment is absurd. It is furtHer submitted that nothing was concealed as tHere was no variation in tHe length of fabric and number of bundles, in which tHe impugned fabrics were packed. It is submitted that tHe importer has sought tHe assessment of tHe goods after first CHeck and produced tHe invoices and packing list both at tHe time of first CHeck and tHerefore, tHere was no intention to conceal tHe viscose knitted fabric. Accordingly, it cannot be said that tHe Appellant has necessary 'animus' to conceal tHe offending goods. Under tHe circumstances, tHere is no condition precedent for invoking Section 119 of tHe Customs Act, 1962. He relies on tHe judgment of tHe Hon'ble Calcutta High Court in tHe case of Lakhotia Udyog Ltd. Vs. Union of India: : 1992 (58) ELT 385 (Cal.) in this regard. It is submitted that tHe Appellants sought tHe amendment of Bill of Entry for weight difference, which was not considered by tHe ld. Commissioner.

3.2 On tHe issue of under valuation, tHe ld. Advocate submitted that no evidence has been produced by tHe Revenue for rejecting transaction value. THe Department failed to show any contemporaneous evidence that tHe invoices were eitHer fabricated or fake that any relationship existed between tHe importer and tHe exporter. Accordingly, without discarding tHe transaction value, no resort can be made to determine tHe value under tHe Customs Valuation Rules, 2007. In this regard, He relied on tHe following decisions:

(i) Pushpanjali Silk Pvt. Ltd. Vs. Commr. of Customs, CHennai : : 2009 (238) ELT 135 (Tri. -CHennai);

(ii) Motor Industries Co. Ltd. Vs. Commr. of Customs :, 2009 (244) ELT 4 (S.C.);

(iii) Commr. of Customs, Mumbai Vs. J.D. OrgocHem Ltd. : : 2008 (226) ELT 9 (S.C.);

(iv) Comm. of Customs, Mumbai Vs. Mahalaxmi Gems : : 2008 (231) ELT 198 (S.C.);

(v) EicHer Tractors Ltd. Vs. Commissioner : : 2000 (122) ELT 321 (S.C.).

3.3 It is tHe contention that tHe variation in quantity in tHe present case, roughly works out to 3%. Demand is not sustainable for such a notional difference as Held in case of G. H. Shaikh Vs. Commr. of Customs, Pune : : 2003 (154) ELT 540 (Tri. -Mumbai).

3.4 It is submitted that even though tHe importer had specifically requested for tHe weighment before assessment, but tHe same was not considered by tHe Department.

3.5 It is tHe submission that tHe Hon'ble Supreme Court in tHe case of Union of India Vs. Gangadhar Narshingdas Aggarwal reported in : 1997 (89) ELT 19 (S.C.), Held that wHere tHe duty is leviable to weight basis depending on iron content in tHe iron fines, percentage of iron content, have to be determined after ignoring impurities including moisture in tHe lump. It is tHe submission that but for moisture content, tHere would not be any difference in tHe quantity declaring by tHe importer and tHerefore, tHe charges of mis -declaration of tHe quantity and its concealment do not survive.

3.6 THe ld. Advocate submits that while passing tHe order, tHe ld. Commissioner has ignored tHe aforesaid facts having bearing on tHe case and tHerefore, merits to be set aside.

(3.)AS per contra, the ld. A.R. for the Revenue, submitted that there was an existing DRI Alert in respect of mis -declaration of value of the imported fabric from China and therefore, evasion of Customs duty. In such case, invariably the goods were examined on first Check basis before assessment and therefore, there is no force in the argument of the Appellants that as they had requested for the first Check before assessment, they do not have any intention to evade duty. He submits that the Appellants themselves at the first instance, had waived the show -cause notice and also personal hearing, but later on, they requested for personal hearing, which was granted to them before adjudicating the case. During adjudication, the ld. Commissioner found that the excess quantity of the fabric, namely, viscose knitted fabric was concealed and not declared in the Bill of Entry, the said excess quantities were liable for confiscation. He however fairly agrees that weighment was not done before adjudicating the case. He submits that the Appellant never disputed the issue of valuation before the ld. Commissioner and therefore, there was no occasion to supply them the evidences in the form of contemporaneous import or otherwise before enhancement of value.
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