JUDGMENT
J.H. Joglekar, Member (T)
1. These 13 appeals arise out of the same order passed by the Commissioner of Customs, Gujarat, Ahmed-abad. These are, therefore, taken up together for disposal vide this common order.
2. We have heard Shri V.S. Nankani for the appellants except the appellant Wavin Ind. Ltd. On behalf of Wavin Ind. Ltd. prayer was made for adjournment on the ground that the counsel was not available. On perusal of the facts and on hearing the counsel, we are of the opinion that no prejudice will be caused to Wavin Indl. Ltd. if their appeal is taken up for disposal at this stage without the assistance of their counsel also. We proceed to do so.
3. During 1994-95, a number of imports of plastic raw materials were made by the present appellants. One of the appellants viz. M/s. Gujarat State Export Corporation were a Government of Gujarat Undertaking. They had entered into an agreement with M/s. Adani Exports Ltd., who are also the appellants before us in this group of cases for import of such raw materials. The agreement requires M/s. Adani Exports to indent for the goods, to procure the goods from abroad, to fund such purchases, clear the goods on payment of duties, pay all other taxes and also to sell the goods. For this consideration, G.S.E.C.L. were to receive 0.75% of the cif value of the imported goods up to the total value of Rs. 20 crores and of 0.5% for the imports value above that limit. In terms of this contract, certain consignments were imported and sold to buyers on high seas basis. There were also goods imported by other agencies which were later sold on high seas basis to others. The other appellants in this batch of cases were traders who had sold the goods on high seas basis or had purchased the goods on high seas sales.
4. The goods so imported were cleared. Where the valuation was assessed provisionally, requisite bonds were filed by the various importers.
5. Demand-cum-show cause notices were issued to all the appellants. These show cause notices were identically worded. The show cause notices recounted the number of B/E, origin of the goods, quantity of the goods and the valuation. These show cause notices referred to PLATT’s Price Bulletin and quoted the valuation of similar goods as given in that journal for sales made in the appropriate periods. These show cause notices quantified the value as per the PLATT’s report and compared it with the value declared. These show cause notices alleged that on such comparison there was a short levy which was quantified. Direct allegation was made of mis-declaration to take undue advantage of the DEEC scheme. Proposals were made for enhancement of valuation and also for imposition of penalty on the importers as also on the high seas sellers.
6. Subsequently, each noticee was sent a compilation of contemporaneous import price of similar/identical goods imported during that period. Although, the reason for sending this data was not apparent on the face of such communication, it would appear that they were in pursuance of the show cause notices issued. The appellants such as G.S.E.C.L. evidently took them to be so and filed their comments show cause notice-wise. In the comments they brought out the distinction between the circumstances of the imports. They distinguished the situation from their imports such as volume of import, country of origin etc.
7. After hearing the importers and their counsels, the Commissioner passed orders. He confirmed the differential duty in each case and also imposed penalty upon the importers as also on the high seas buyers. Against this order, these appeals have been filed.
8. We have heard Shri V.S. Nankani for the appellants and Shri M.H. Shaikh, D.R. for the Revenue.
9. During the arguments, the reliability of the PLATT’s report in determination of the valuation of the imported goods was discussed at length. The judgment in the case of Adani Exports Ltd. v. CC, Visakhapatnam [2000 (116) E.L.T. 715] was cited. In holding that the publication was not relevant, the Tribunal held as under :-
“We find that unlike the London Metal Exchange, where actual trading of metals takes place i.e. transactions are involved, and which are reflected in its LME Bulletin, the PLATT’s price report is not based on transactions but merely is a compilation of price ranges of various plastic materials. Furthermore, as these are region-wise (and not country-wise), therefore for all these reasons they do not represent alternate transaction values. We are hence unable to accept the proposition in the impugned orders that the assessable value can be enhanced on their basis in the absence of instances of contemporaneous imports and as no clear and convincing evidence to prove any fraud in the declared values is led with respect to HDPE(IG)and HDPE(FG). In the case of Hind Afghan (supra) it was held that price ranges in Financial Journals are not relevant as acceptable transaction values. Since PLATT’s report is also merely a similar journal, the ratio of the said decision is applied.”
10. We find that this judgment was followed by the Tribunal in subsequent orders also including that published in 2002 (139) E.L.T. 421 [CC, Chennai v. Deejay Plastics (P) Ltd.]
11. Shri Nankani referring to the publication pointed out that this publication gives indication of prevalent prices which are areas specific. Thus the price quoted was for East Asia, South East Asia etc. He pointed out that in terms of the Customs Valuation Rules, 1988, the value of the imported goods shall be the transaction value of similar goods in a country specific manner. We find substance in this claim. The sub-rules in defining the words “identical goods, similar goods” etc. require that for the sake of comparison, the goods should emanate,from the same country. This would further substantiate challenging the valuation of the imported goods relying upon the PLATT’s report.
12. Shri M.H. Shaikh, the ld. DR citing from paragraph 11 of the Adani Exports judgment supra submits that where there is evidence of fraud, even in the absence of contemporaneous imports, reliance can be placed on PLATT’s reports for similar imports. We have examined this claim. The Commissioner has dealt at length in his order on the existence of fraud. The citation made by him is of the agreement between the Adani Exports and G.S.E.C.L. which he has briefly enumerated and referred to in the findings. To us it appears to be a contract between the two parties in the course of ordinary business. On perusal of the contract, we find nothing therein as to enable a fraud to be played by either side or any person or agency. In the absence of establishment of any fraud, we cannot accept Shri Shaikh’s submission that the reliance placed on PLATT’s price is correct.
13. We further note that provisions of Section 114A have been resorted to by the ld. Commissioner, even where the alleged mis-declaration and under valuation was during the period prior to the enactment of the Section. CCE, Coimbatore v. Elgi Equipments Ltd. [2001 (128) E.L.T. 52].
14. In his order, the ld. Commissioner also mentioned that the importers had failed to produce the manufacturer’s invoice. Shri Nankani submits that the requirement in terms of Rule 10A to that effect was enacted only in February; 1998.
15. As we have observed above, the data as to contemporaneous imports did not form part of the notices. We further note that subsequently that data was supplied and was discussed by the Commissioner. In the replies, the importers had brought out the reason why the contemporaneous prices could not be adopted for valuation of the disputed consignments. The Commissioner in his order has not dealt with invocation of the contemporaneous prices or the objection raised by the importers thereto. In fact, where the contemporaneous prices are to be taken into account, then the valuation could be done in terms of Rule 5 or 6. Even when the data was available, the Commissioner in paragraph 14 made the following startling statement :-
“Since the valuation is not possible under Rules 5, 6 and 7 strictly, the valuation is to be determined under Rule 8, taking the minimum PLATT’s price.”
16. We find that the show cause notices were clearly for finalisation of the assessment which was provisional. The law laid down by the Tribunal and the various courts is that where the assessments are provisional, the notices seeking imposition of penalties etc. are premature. It is held that the phrase ‘short levy and not levy’ can occur only when the provisional assessments are finalised. In fact in paragraph 19 of his order also, the ld. Commissioner speaks of “liable to pay the differential duty”. In his ‘order’ portion also he had proceeded to finalise the provisional assessment.
17. On perusal of the show cause notices, its replies and the adjudication order and on perusal of case law and on hearing both sides, we find that the adoption of PLATT’s price for rejection of the transaction value as shown in the individual invoices was without basis. The appeals succeed and are allowed with consequential benefit.