ORDER
S.S. Kang, Vice-President
1. Heard both sides.
2. The appellant filed this appeal against the adjudication order passed by the Commissioner of Customs.
3. The appellant made import of two consignments declaring the goods is toys and dolls made of plastics. The appellant declared the value of the consignment is Rs. 8,35,964/-, On enquiry conducted by the Custom authorities, it was found that actual value of the toys is Rs. 25,71,726/-. After issue of show cause notice, the adjudicating authority confiscated the goods on the ground of mis-declaration and allowed the same to be released on payment of redemption fine of Rs. 10 lakhs and duty of Rs. 5,20,729/- was confirmed and penalty of Rs. 10 lakhs was imposed on the appellant.
4. The contention of the appellant is that they made import of the goods from M/s. Zeptron (HK) Ltd. and filed the Bills of Entry. The contention is that there is no evidence on record to show that the appellant made mis-declaration in respect of the value of the goods and there is no evidence on record that similar goods are being imported at higher price into India. The contention is that the Revenue is relying some information supplied by Customs and Excise Department, Hong Kong regarding the value of the goods. The contents in the letter cannot be made basis to penalise the appellant on the ground that the appellant mis-declared the value of the goods. The appellant relied upon the decision of the Tribunal in the case of Truwoods Pvt Ltd. v. CC reported in 2005 (186) E.L.T. 135 to submit that value of the imported goods cannot be enhanced on the basis of photocopy of the export declaration obtained from the Foreign Custom Offices. The appellant also relied upon the decision or the Eicher Tractor v. CCE to submit that the transaction value cannot be rejected without any basis. The appellant also relied upon various decisions of the Tribunal to this effect.
5. The contention of the Revenue is that the Indian Custom authorities made enquiries from the Customs and Excise authorities at Hong Kong from where the goods were imported. The Custom and Excise department, Hong Kong vide letter dated 24th July, 1999 informed the Indian Custom authorities through the Consulate General of India, Hong Kong that the CIF value stated in the invoices under which the goods are imported were false. The CIF value stated in the invoices represents only about 30% of the CIF value of the goods. The Hong Kong Custom authorities informed that the supplier has issued false invoices at the request of the Indian Importer. The invoiced amounts were to be settled on DP terms (payment against the document) while the balances were paid by cheque or telegraphic transfer. On the basis of this information which is in particular in respect of the same invoices which were produced by the appellant in support of the value declared in the Bills of Entry. This value declared by the appellant is not a correct value, therefore, the value declared by the importer was rightly rejected. The Revenue also relied upon the decision in the case of Mahalaxmi International Exports v. CC and in the case of Craft Studio v. CCE . The contention is that the Tribunal in these cases held that in case the invoices of foreign supplier does not show the actual price of the goods and where there is another invoice available showing actual price for collection of payment and the Custom authorities of exporting country after conducting enquiry supplied these invoices to Indian Custom authorities the value of the goods is to be determined as per the actual price of the goods.
6. We find that in this case the price of the imported goods declared by the appellant was not accepted by the Custom authorities. The Custom authorities made enquiries from the Customs and Excise department, Hong Kong from where the goods are imported. The Custom authorities at Hong Kong vide letter dated 24th July, 1999 informed the Indian Customs that the CIF value stated in the invoices were false and only represents 30% of the CIF value of the goods. It is also mentioned that the false invoices were at the request of the Indian importer. The invoiced amount were to be settled on DP terms while the balances were paid by cheque or telegraphic transfer. For ready reference the letter received from the Customs and Excise Department, Hong Kong are re-produced below: –
Mr. Sahab Singh Consul
Consulate General of India
16-D, United Centre
95, Queensway
Hong Kong.
Dear Mr. Singh,
Request for Investigative Assistance Zaptron (HK) Ltd.
Further to our letter in this series, I wish to inform you that we have completed our verification of the invoice values of two consignments of assorted toys exported to India by the above company.
We find that the CIF values stated in the invoices referred by you were false for Invoice No. KT-1298-97, the CIF value stated therein (US$ 8,938.30) represented only 30.92% of the actual CIF value of the goods (US$ 28,901.06). For the other Invoice No. KT-1071-98, the CIF value stated therein (US $ 12,622.80) reflected only 33.6% of the actual CIF value of the goods (US $ 37,562.56).
The company issued the false invoices at the request of the Indian importer. The invoiced amounts were settled on D.P. terms while the balances were paid by cheque or telegraphic transfer.
When the company lodged the export declarations with us, it declared incorrect FOB values of the goods. We shall prosecute the company for lodging inaccurate export declarations. In such circumstance, 1 would not provide you with copies of the inaccurate declarations.
We are continuing our investigation into Niti International. You will be informed of the results once they are available. Meanwhile, if there is anything you wish to know about the investigation. Please feel free to contact me.
Yours sincerely,
Sd/-
Deputy Head of Trade Licensing Investigation Bureau
7. The contents of the letter shows that the actual price of the goods is other than mentioned in the invoices produced by the appellant and actual price has been paid by the appellant which is other than the price mentioned in the invoices produced by the appellant. It is also mentioned in the letter that the exporter has issued the false invoices at the request of the Indian importer. In these circumstances, we find that the ratio of the case relied upon by the appellant is not applicable on the facts of the present case. The appellant relied upon the decision of the Tribunal in the case of Truwoods Pvt. Ltd. (supra) where the Tribunal held that the value of the imported goods cannot be enhanced on the basis of photocopy of the export documents obtained form the country of export. In the present case, the Revenue has not relying any photocopy of export documents. The Revenue relied upon information which is on the basis of investigation conducted by the Custom authorities at Hong Kong and that information was supplied by the Custom authorities.
8. The appellant also tried to argue that the exporter is not penalised by the adjudicating authority and Commissioner has wrongly invoked the provisions of Rule 8 of Customs (Valuation) Rules. We find that these arguments will not help the case of the appellant in view of the information supplied by the custom authorities which is in particular regarding the Invoices under which the goods are imported which shows that the particulars mentioned in the invoices is not the actual transaction/In these circumstances, we find no merit in this appeal, the same is dismissed.
(Dictated and pronounced in open Court on 16-1-2006)